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Helping to Create the government we can afford...
A PROJECT BY...
Major Contributors:
Terrence Shanigan
Michael Chambers
It is no secret that the State of Alaska is in an extreme crisis regarding the yearly operating budget.
Projections this coming year FY27 show that the revenue deficit will be over $300 million, and that is only if oil revenues remain at current levels. There are legitimate arguments that the price of oil could go down based on world events and this would increase our deficit.
It is obvious that the "main budgetary topic" next legislative session will center around increased revenues which is code for instituting additional taxes on the citizens of Alaska. Some proponents promote the idea that Alaskan citizens are not taxed due to no statewide income or sales tax but this is simply not true.
For 10 years now the legislature has ignored existing statutory law regarding the PFD and have dipped into this fund to pay for government services they consider more essential than the PFD. Given this, Alaska is the only state which levies a tax on the children of the state to pay for state government. During this time, a university study ( ISER 2017 ) considered the greatest negative impact on our economy would be lowering or eliminating the PFD distribution.
In the last 10 years approximately 675,000 citizens of Alaska have been taxed $15 billion to maintain services the legislature considers essential.
So where are we now?
Currently the Alaska legislature is using a POMV model to siphon funds from the profit of the Permanent Fund investment. The percentage draw is currently 5%.
The Permanent Fund earnings provides enough revenue to draw 5% from this fund. Given this draw, it has substantially decreased the fund's ability to grow.
If a major economic fluctuation were to happen, the current draw has the potential to invade the principle of the Permanent Fund corpus which would create a Constitutional crisis as this fund is exclusively owned by the citizens of Alaska, not the legislature.
Additionally current proposed legislation,
HJR 10 Sponsored by Representative Calvin Schrage
and SJR 14 Sponsored by Senate Finance...
if enacted, would roll the profit investment ( Earnings Reserve ) of the Permanent Fund directly into the corpus of the fund. This legislation would give state representatives the ability to draw directly from the Permanent Fund by decoupling any draw from the "yearly profit."
This is current proposed legislation to give legislators direct access to the entire corpus of the Permanent Fund. This is extremely alarming legislation. If enacted current and future legislators could drain the entire Permanent Fund using the excuse of funding "essential services."
Given the financial record of the legislature, how many years would it take them to drain the entire Permanent Fund of $75 billion?
In 2017 United for Liberty produced and distributed to all existing legislators a budget book which cut the existing budget by $1.5 billion without disrupting essential services. Every recommendation we proposed was ignored. Below is a link to this budget book and current recommendations in a link we are currently working on called (Solutions ) to the upcoming budget crisis
Please take time and examine these proposals and share this site with all Alaskans you know.
At Mission Critical, we fully understand that the legislature is not going to address the upcoming budget crisis in any meaningful way other than proposing additional taxes. It will be up to informed Alaskans to apply substantial pressure on all legislators and candidates for office to address the substantial excess of government first before enacting additional taxes on the citizens. It is our job both at United for Liberty and Mission Critical to continue to educate the general population regarding the excess of government spending.
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