Alaska Senate Finance Committee reviews Senate Joint Resolution 14 on permanent fund amendment

The Senate Finance Committee convened on March 24, 2025, at the State Capital Senate Finance Room, with a full attendance of committee members including Chairman Olson, Chairman Steadman, and Senators Kiel, Merrick, Kauffman, and Cronk. The primary agenda item was Senate Joint Resolution 14, which proposes a constitutional amendment concerning the Alaska Permanent Fund.

Liz Harpold, staff to Senator Olson, provided an overview of the resolution, highlighting its aim to enhance fiscal stability by consolidating the principal and earnings reserve of the Permanent Fund into a single fund. This amendment would limit the annual draw from the fund to a percentage of market value, thereby establishing a more secure endowment-style fund. If passed by the legislature, the resolution would be presented to voters as a ballot measure in the November 2026 general election.

Devin Mitchell, CEO of the Alaska Permanent Fund Corporation, emphasized that the proposed amendment would not affect the process for appropriating funds for the Permanent Fund Dividend. He noted that the new structure would ensure a reliable annual transfer from the fund to the state, reducing the risk of failed transfers under the current system. Mitchell also reassured committee members that the amendment would protect the principal of the fund, ensuring its viability for future generations.

During the discussion, Senator Stedman raised concerns about the implications of a potential cap on the draw rate, suggesting that any attempt to exceed the proposed 5% limit would require a constitutional amendment and a public vote. This point was acknowledged as crucial for maintaining the integrity of the Permanent Fund.

Senator Kaufman inquired about the modeling of different draw rates and their potential impacts on the fund's growth. Mitchell responded that previous analyses indicated that a 5% draw rate is optimal for sustaining the fund in perpetuity, but decisions regarding draw rates ultimately hinge on policy considerations about future needs and revenue sources.

The committee then opened the floor for public testimony, but no opposition was voiced, indicating broad support for the resolution. The meeting concluded with a reminder of the next session scheduled for the following morning, which will feature an update from the Alaska Broadband Office.