Current weather

  • Scattered clouds
  • 54°
    Scattered clouds

Permanent fund still growing despite worst quarter

Posted: Wednesday, November 13, 2002

Alaska's Permanent Fund can expect continued growth and prosperity, despite the fact that the fund -- 53 percent of which is invested in stocks -- is coming off its worst quarter in history. That's the message fund communications director Jim Kelly delivered at Tuesday's meeting of the Soldotna Chamber of Commerce.

Kelly, in town for this week's fund board of trustees meeting, said the success of the fund lies in the fact that it's managed for long-term stability, not short-term profit.

"The good years average out the bad years," Kelly said.

He said the fund operates in such a way as to not be swayed by volatile markets. Kelly pointed to several charts that illustrated his point. Although financial markets can swing wildly from year to year, the fund has managed to stay the course by investing for the long term and diversifying its portfolio, he said.

"The beauty of the fund is that it's an institution that has discipline," he said.

Besides showing how the fund has remained stable through the years, Kelly also said he hopes the Legislature will pass a constitutional amendment that would set aside 5 percent of the fund's total market value annually to be spent on dividends and state services.

Under existing law, only the fund's earnings can be spent on dividends or state government. How-ever, Kelly said a more reasonable approach would be for the Legis-lature to pass an amendment that would annually pay out 5 percent of the entire fund balance. That way, money will always be available for payouts -- whether earnings are up or down.

"You cannot have a permanent fund that does not make a payment," he said.

Kelly said critics of the plan may argue that payment from the fund's principal could slowly erode the overall value of the fund. However, he argued that fund investments in strong years would likely account for shortfalls in the lean years.

"You have to take a long-term perspective," he said.

A similar proposal was brought before the Alaska Legislature last year but stalled in the Senate. Kelly said he's hopeful legislators this time around will be more willing to pass the amendment.

The subject will be one of several the fund board of trustees will discuss today at the King Salmon Motel in Soldotna. Meetings get under way at 9 a.m., following opening remarks from Kenai Peninsula Borough Mayor Dale Bagley and Soldotna Mayor Dave Carey.



CONTACT US

  • 150 Trading Bay Rd, Kenai, AK 99611
  • Switchboard: 907-283-7551
  • Circulation and Delivery: 907-283-3584
  • Newsroom Fax: 907-283-3299
  • Business Fax: 907-283-3299
  • Accounts Receivable: 907-335-1257
  • View the Staff Directory
  • or Send feedback

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING

MORRIS ALASKA NEWS