Where have all the billions gone?

By Ray Metcalfe

When I was in the legislature, I chaired the House Committee that — with a like Senate Committee — drafted the original investment strategy for the Alaska Permanent Fund.
We expected the Permanent Fund to grow until its earning capacity exceeded oil revenues, at which time we hoped voters would pass an additional constitutional amendment committing all future oil revenues to the Fund.
We had also hoped voters would authorize the legislature to draw out a fixed 6 percent per year, guaranteeing a stable economy and dividends forever.
How close were we?
• Last year, unrestricted oil revenues totaled $6.352 billion.
•The fund is nearly $50 billion.
• Add $9 billion from the budget reserve; $59 billion.
• Figure in a historic 10 percent growth over five years, and that equals $95 billion.
• ACES was socking away an extra $3 billion per year. Total in five years, $110 billion.

Six percent of $110 billion equals $6.60 billion.
With the right leadership, we were six years from guaranteed dividends, a perpetual balanced budget and an economy free of booms and busts.
We were so close, too.
It won’t happen unless SB 21 is repealed.

Ray Metcalfe is the former member of the Alaska legislature who exposed Veco’s bribery of several legislators for their votes to keep Alaska’s taxes on oil below international norms.

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Posted by on Jun 3rd, 2014 and filed under Point of View. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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