The Alaska Permanent Fund is a constitutionally established permanent fund run by a state-owned company, Alaska Permanent Fund Corporation (APFC). Founded in Alaska in 1976 by Article 9, Section 15 of the Constitution of the State of Alaska under Governor Jay Hammond. From February 1976 to April 1980, the Treasury Department of the Revenue Division manages the assets of the Permanent Fund of the country, until, in 1980, the State of Alaska Legislature created the APFC. By the end of 2016, the fund is worth almost $ 55 billion funded by oil revenues.
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Histori
Shortly after oil from the Alaska North Slope began to flow into the market through the Trans-Alaska Pipeline System, the Permanent Fund was created by amendments to the Alaska Constitution. It is designed to be an investment in which at least 25% of oil money will be put into special funds for future generations, which no longer have oil as a resource. This does not mean that funds are fully funded by oil revenues. The funds do not include property taxes on oil company property or income taxes from oil companies, so the minimum deposit is 25% closer to 11% if those resources are also considered. [Context]] The Alaska Permanent Fund sets aside a certain share of oil revenues to continue to benefit current and future generations of Alaska. Many citizens also believe that the legislature is too quick and too inefficient to spend $ 900 million in bonuses the state gained in 1969 after hiring out the oil fields. This belief spurred the desire to place a portion of oil revenues from direct political control.
Alaska Permanent Fund Corporation manages the assets of either the Permanent Fund or other state investments, but spends on the Fund's Earnings depending on the Legislature. Corporations must manage maximum wise returns, and not - as some Alaskans initially wanted - as development banks for projects within the country. Funds grew from an initial investment of $ 734,000 in 1977 to about $ 53.7 billion as of July 9, 2015. Some growth is due to good management, in part to reinvestment of inflation, and some through legislative decisions to deposit additional income over the life- boom period. Every year, realized profit funds are divided between inflation-checks, operating costs, and annual Permanent Dividend Funds.
In June 2011, the IMF chief of investment officers announced it will abandon the state's wealth funds and re-enter the private sector, joining the consulting firm Wurts and Associates. His successor is Jay Willoughby, a private-sector entrepreneur. The Fund is a member of the International Forum of Sovereign Wealth Funds and has therefore signed the Santiago Principles on best practice in managing state funds. CIO of the current fund is Russell Read.
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Alaska Permanent Fund Corporation
Alaska Permanent Fund Corporation is a government instrument of the State of Alaska created to manage and invest Alaska Permanent Asset assets and other funds established by law.
Supervisory Board
The Board of Trustees is appointed by the governor
- Bill Moran, Chairman, re-appointed 2014
- Carl Brady, Vice Chairman, reappointed in 2015
- Larry Cash, designate 2013
- Gary Dalton, appointing 2012
- Randall Hoffbeck, pointing to 2014
- Craig Richards, pointing to 2015
Dividend of Permanent Fund
The Permanent Fund Dividend [PFD] is a dividend paid to Alaska residents who have lived in the state for one full calendar year (1 January - 31 December), and intend to remain Alaska residents indefinitely. This means that if the residency is taken on January 2, the "calendar year" will not begin until January 1.
However, a person is not eligible for a PFD for the year of dividend when:
- (1) during the qualification year, the individual is sentenced for committing this crime;
- (2) during all or part of the qualifying year, the individual is incarcerated as a result of a belief under this circumstance
- (a) a crime; or
- (B) violation if the individual has been convicted
- (i) previous crimes as defined in US 11.81.900; or
- (ii) two or more previous violations as defined in US 11.81.900
The amount of each payment is based on an average of five years Permanent Fund performance and varies greatly depending on the stock market and many other factors. PFD is calculated by the following steps:
- Add Statut's Net Income Statement from the current plus the previous four fiscal years.
- Multiply by 21%
- Divide by 2
- Reduce the previous year's liability, fees and operations of the PFD program
- Share with the number of qualified applicants
The lowest individual dividend payment was $ 331.29 in 1984 and the highest was $ 2,072 in 2015. However, in 2008 the Governor Sarah Palin signed the Senate Bill 4002 which used revenue generated from the country's natural resources and provided a special one-time payment of $ 1,200 for each Alaska are eligible for PFD.
Although the IMF's principal or corpus is constitutionally protected, the revenue earned by the IMF, like almost all state revenues, is constitutionally defined as public funds.
The first dividend plan would pay Alaska $ 50 for each year of residency up to 20 years, but the US Supreme Court at Zobel v. Williams 457 US 55 (1982) does not approve a $ 50 per year formula as an aggravating difference that weighs on travel between countries. As a result, each qualified resident now receives the same annual amount, regardless of age or year of residency. Yearly individual payments
This is the funding history of annual annual payments, in nominal USD.
Budget Reserves Constitution (CBR)
The Constitutional Budget Reserves are a companion fund for the Permanent Fund established in 1991 to address the short-term oil income variability. Deposits into CBR consist of resolving tax returns and other income paid to the state. Withdrawing from CBR to public funds requires 3/4 votes from each legislative house and must be paid off. To date, the general fund has accumulated approximately $ 4 billion of debt to CBR to maintain a stable level of public expenditure.
Issues with Budget Reserves Constitution
The amount of debt associated with the budget has raised doubts about the possibility of repayment. CBR is based on the assumption that the general fund deficit will remain constant over time (allowing repayment to the withdrawal balance). Believing this to be false, critics accuse the state of using resources from CBR to avoid reducing budgets, admitting debt, or raising taxes. According to them, the decline in oil revenues and increased spending requirements will leave a lower return than the draw, causing CBR to fail.
Former state senator Dave Donley (R-Anchorage) acknowledges that high voice requirements for spending money on CBR (¾ individual homes) have undesirable and undesirable consequences, High voice requirements are intended to ensure that withdrawals from CBR will rarely occur , but actually a draw like that is common. Donley explains that high voice requirements really empower minority parties (in the 2000-07 era, Democrats), who can then get what they want in a Christmas tree bill (a gift for everyone, both majority and minority) in exchange for they vote (the minority vote will not be required with the usual 51% voting rule). Donley explains why both parties can and do use higher voting rule requirements to spend more often than CBR.
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Dividends and expenses
While the Permanent Fund generally generates a large surplus even after the Dividend payment [PFD], public state funds are operated on a substantial deficit. However, the combined accounts of the General and Permanent Funds usually show a surplus. The final use of the Fund was never clearly spelled out at the outset, leaving no current consensus on what role the Fund should play in the current and expected shortfall of the state budget. However, some argue that the original goal was to finance the state government after oil wealth temporarily ceased, while others noted that the IMF's intentions changed from the origin of 1976 when in 1982 the Dividend program began. Public opinion strongly supports Dividend program. Indeed, in 1999, with oil prices as low as $ 9 a barrel and Alaska oil consultant Daniel Yergin, forecasting low prices "for a predictable future", the State voted as advisor before Alaska asked if the government could spend "some" part of the Permanent Fund's Income for governmental purposes. Governor Knowles, Lieutenant Governor Ulmer, and many other elected officials urged a "yes" vote. Campaign expenditure is very beneficial to the "yes" side. Society voted "no" by almost 84%. (Oil prices rose dramatically, starting about two weeks after Yergin's prediction, to above $ 60 per barrel, although the quantity produced continued to fall.) The perceived support of the dividend program is so universally strong that it ensures the sustainability of dividends and protection from the Fund's principal , since any measure that characterizes dividend payout negatively affects the entire population. That is, legislators willing to adjust the IMF's annual income are constrained by the political suicidal nature of any decline in public dividends.
In 2000, the APFC Board of Trustees proposed to change the Permanent Fund management system to a Market Value Percentage Approach (PoMV) that would require amendments to the country's constitution. The PoMV proposal will limit the withdrawal of up to five percent of the value of funds annually, to be spent on Legislative policy. Currently the Legislature has the authority to adjust all revenues realized from the fund. A tentative and unapproved proposal indicates that half of the five percent withdrawal will reach dividends and half of government spending - but the POMV dies in the Legislature because most there see POMV unclear in terms of unpopular shopping proposals politically. Most Alaskans (84% in 1999) did not approve of the government to tamper with the funds, especially if it meant the government might spend on the Revenue Fund.
Again in 2015-2017, the POMV approach is considered. Market prices for northern slope oil fell from an average of $ 107.57 a barrel in FY2014 to $ 50.05 a barrel in FY2017. This price shift causes an 80 percent decline in state revenues and generates a multibillion-dollar budget gap. Both legislatures have passed a bill that provides an annual withdrawal of 5.25% of the average balance of the Permanent Fund (the average of the first 5 of the last six years). Since this formula is based on an average, not a year, an effective draw of only about 4.2% - is sufficient to maintain the real value of the fund as funds are back close to 9% per year. The legislature carefully examines this percentage for two sessions and has reached consensus. The benefits are projected to generate $ 2.7 billion in FY2019 and grow with the Fund's Permanent balance. The main point of the dispute, however, is the size of the dividend: The House's version of the bill uses a 5.25% balance for the government (33% for Dividends and 67% for government services) and an additional 0.25% draw for Permanent Funding inflation checks. This earned $ 2.7 billion ($ 1.8 billion for government use, net of $ 900.9 million dividends - about $ 1,250.00 per Alaska - grew with fund value). The Senate version of the bill uses the same 5.25% withdrawal from the House, but only directs 25% of the lottery to the dividend. It generated the same $ 2.7 billion but government services received $ 2.0 billion while dividends only received less than $ 700 million - about $ 1,000.00 per person - growing with the value of the funds.
Oil revenues are forecast (by the State Revenue Department) to remain stagnant through FY2027, and the traditional budget reserves may be empty in FY2019 but with a Permanent Fund value of over $ 60.0 billion, the budget gap can be significantly reduced. Since this POMV proposal does not close the gap completely, legislators are considering tax bills as well.
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Impact
A 2018 paper found that "Alaska Permanent Fund Permanent Fund has no effect on employment, and improves part-time employment by 1.8 percentage points (17 percent)... our results show that universal and permanent cash transfers do not significantly reduce aggregate work. "
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See also
- asset-based egalitarianism
- Basic earnings guarantee
- Citizen's dividend
- Permanent University Fund - funding a Texas university of oil revenues
- Norwegian Government Pension Fund
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References
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External links
- State of Alaska - Department of Revenue - Alaska Permanent Fund Corporation
- State of Alaska - Department of Revenue - Dividend Funds Permanent Division
- Sovereign Wealth Fund Institute - Alaska Permanent Fund Page
Source of the article : Wikipedia
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