Senator Gary Stevens. (Photo by Clark James Mishler, courtesy of Doug Letch)

Senator Gary Stevens. (Photo by Clark James Mishler, courtesy of Doug Letch)

Candidate Point of View: Gary Stevens

Senate District P candidates Gary Stevens and Greg Madden were invited to submit a 650-word point of view on any subject relating to their campaign with a deadline of noon Tuesday, Oct. 27. Stevens sent his opinion piece by the deadline. In an email, Madden said he was unable to meet the deadline because of an illness.

For this opinion piece I wanted to concentrate on a matter central to Alaska which will impact our success or failure long into the future. That is the Permanent Fund itself. Eyes roll when talking about billions and billions, but it is extremely important we understand the Permanent Fund, realize its importance, and acknowledge that it may be the biggest single-issue facing Alaskans.

We are the envy of other states who would kill to have the savings we do. No state but Alaska has $65 billion in the bank. Our forefathers were wise to establish the fund. The Legislature was wise to inflation proof it over the years, and the public has been wise in not allowing the legislature to overdraw the fund for immediate satisfaction. If we do not protect it, the Permanent Fund could be nickel-and-dimed to death.

After years of oil taxes paying our bills, we have now reached the point where interest from our investments are now greater than the tax on oil. We should all have been wise enough to save when younger, building a nest egg to see us safely through tough times. At one-point, oil revenues funded some 90% of our budget but now only fund some 30%. Just by itself, that should make you realize the financial pickle the state is now facing.

The value of the fund today is now over $65 billion. Who can envision such a gigantic pot of money? Some say, “Give me my share now.” But that would be unwise. What is wise is to protect it, allow it to grow so it will have an impact not only on us today, but the lives of our children, grandchildren, and all Alaskans hundreds of years from now.

The Permanent Fund is a mixture of savings in the principal, earnings in the Earnings Reserve, as well as unrealized gains from investments we have not yet sold. Today the principal totals over $54 billion in two parts. One is $46.7 billion in permanent savings and the other is $7.5 billion in unrealized gains. As for the Earnings Reserve Account, it now totals over $10 billion in three parts: $6.3 billion in realized earnings, $3.1 billion committed to the 2022 Percent of Market Value (POMV) draw, and $1.5 billion in unrealized gains.

A little more on the Percent of Market Value (POMV). The Legislature studied other giant funds like ours and learned most spin off a percentage to help fund the governments holding them. It was determined a 5% POMV could be withdrawn each year to do three things: 1. Inflation proof the Permanent Fund, so it does not lose value (Elmer Rasmussen was quite right in calling inflation the thief in the night); 2. Provide a dividend or PFD to every man, women, and child in Alaska; and 3. Help fund government services like schools, health and social services, transportation, police protection, etc. etc. The 5% POMV available for last year’s general fund was $3.8 billion. Without it we would be in very deep trouble since we operate with no state income or sales tax. The projections for next year indicate our Permanent Fund will be up to $71 billion. By 2030 the PF is projected to be over $80 billion.

I trust you can see the wisdom of not overdrawing the fund. If we leave it alone, only drawing out 5% a year, it will quickly reach $100 billion with a POMV of $5 billion. Compound interest is magical. It is very easy to overdraw the fund and kill the goose that lays the golden egg. We must avoid that at all costs. The only way those candidates and politicians who are promising you a $3,000 PFD can deliver it is by overdrawing the Permanent Fund. Do not let that happen. Let’s be wiser. Protect the fund and it will protect you well into the future.

Gary Stevens currently represents Senate District P in the Alaska Senate and is running for re-election.

More in Opinion

Pam Brodie
Point of View: Murkowski could hold key to unifying America

A lot rides on the outcome of the Georgia U.S. Senate run-off… Continue reading

In this Oct. 18, 2018, file photo, then-Alaska Gov. Bill Walker addresses delegates at the annual Alaska Federation of Natives conference in Anchorage, Alaska. (AP Photo/Mark Thiessen, File)
Point of View: Alaska’s Gasline — the time is now

I am pleased to be a founding member of the newly formed… Continue reading

Michael O'Meara's cartoon for Dec. 3, 2020.
Letters to the Editor

Thoughts from readers like you

Alaska Lt. Gov. Kevin Meyer. (Photo courtesy Lt. Governor's office)
Point of View: Thanks to Alaskans for participating in the democratic process

This year has been one for the record books, and this month’s… Continue reading

The logo for South Peninsula Hospital. (Image courtesy South Peninsula Hospital)
Point of View: Help us to help you by being COVID-19 safe

Doctors seek community action in keeping COVID-19 numbers down

Michael O'Meara's cartoon for Nov. 25, 2020.
Letters to the Editor

Thoughts from readers like you

Michael O'Meara's cartoon for Nov. 19, 2020.
Letters to the Editor

Thoughts from readers like you

Zoe Stonorov. (Photo courtesy of Zoe Stonorov)
Point of View: Community and isolation

Be kind to each other during the pandemic.

A "hug raincheck" sticker Flo Larson received in the summer of 2020 in Homer, Alaska, made her realize how much she missed human contact during the COVID-19 pandemic, she writes. (Photo courtesy Flo Larson)
Point of View: Thoughts about the pandemic

Last summer, while standing on the boardwalk on the Spit, an acquaintance… Continue reading

Most Read