KENAI (AP) -- Coming off its worst quarter in history, the Alaska Permanent Fund can expect continued growth and prosperity, according to a fund official.
Fund spokesman Jim Kelly delivered the optimistic news Tuesday to the Soldotna Chamber of Commerce.
Kelly, in town for this week's fund board of trustees meeting, said the success of the fund -- 53 percent of which is invested in stocks -- 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.
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.
Kelly said he is hopeful 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. But Kelly said a more reasonable approach would be for the Legislature to pass an amendment that would annually pay out 5 percent of the entire fund balance, the Peninsula Clarion reported. 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. But he said fund investments in strong years would likely account for shortfalls in the lean years.
A similar proposal was brought before the Alaska Legislature last year but stalled in the Senate.
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