By THE ALASKA STORY
April 6, 2026 – One of the smarmier little stunts pulled by House Finance this budget cycle was dedicating $1.49 billion from the Earnings Reserve Account to the corpus of the Permanent Fund under the excuse of inflation proofing.
Note that this is separate from the 5% of market value draw available to appropriate for state spending. Co-chairs of House Finance are Neil Foster, Andy Josephson and Calvin Schrage, democrats all.
Before I step off into the deep water of dueling pots of money, I want to note that this fiscal complexity is intentional, so as to bury whatever is actually going on under a dump truck load of unnecessary (or necessary, depending on your point of view) complexity including multiple pots of money with varying levels of access (from easy – any earnings reserve, to nearly impossible – the corpus of the Permanent Fund).
Today, the PFD appears to be governed by two mutually exclusive statutory requirements. The first is the statutory PFD, governed by multiple state statutes, mostly under Title 43.23. The Permanent Fund Division publishes a 91-page document on Statutes and Administrative Code governing the Permanent Fund. It was last updated in 2023. Inflation proofing is governed by AS 37.13.145(c).
For years, conservative majorities in the legislature would park excess money in the nearly untouchable corpus of the Permanent Fund while at the same time paying the full statutory PFD. There was never any question about priorities under those majorities.
The current tension between the two statutory requirements was not evident until Bill Walker vetoed the PFD in 2014, creating it. After that, a succession of “bipartisan caucuses” in the legislature decided the PFD is the last spending priority rather than the first.
This year, House Finance used the excuse of the statutory requirement for inflation proofing as an excuse to cut the proposed PFD in half. Senate Finance grabbed another third of that amount.
We are told that inflation proofing is a statutory requirement. So also, is the PFD. The democrat and RINO led majority caucuses are telling us that they must follow one state law while regularly ignoring the other. The problem with the law is that the legislature can pick and choose which laws to follow with impunity until voters hold them to account.
Numbers are important here, so I will use a couple. The US inflation rate in 2025 was 2.68%, 3.2% in 2026. The Permanent Fund grew to $84.7 billion in 2025, making 9.35% that year, roughly three times the inflation rate. For the green eyeshade crowd, the Permanent Fund Corporation publishes an annual report that explains the numbers.
Given these numbers, does the Permanent Fund really need inflation proofing? And should that inflation proofing come at the expense of the PFD? Let those questions guide you in the upcoming campaigns and elections this year.
Alex Gimarc lives in Anchorage since retiring from the military in 1997. His interests include science and technology, environment, energy, economics, military affairs, fishing and disabilities policies. His weekly column “Interesting Items” is a summary of news stories with substantive Alaska-themed topics. He was a small business owner and Information Technology professional.
3 thoughts on “Alex Gimarc: Is it time to stop inflation-proofing the Permanent Fund?”
This is one expense that does not bother me. If the State is not going to pay out a PFD and wants to deposit the money in a non touchable account that benefits all Alaskans, then we need to move on and go after the expenses the State needs to cut. This would be last of my list for cuts to the budget the State should be looking at.
There’s will not be any cuts, except to popular programs so the public will agree to a,tax” its really, really just to fund X!, we pinky swearSie” and by the way, were taking the PF corpus, too!
But it is not the State of Alaska choosing to do this. None of the voters voted for this. The Governor doesn’t agree with it, neither does the minority. Rather, it is a thin democrat – RINO excuse to follow one law and ignore the other. And this doesn’t benefit all Alaskans like the PFD does. In recent years it only increases the corpus before the democrat – RINO caucus can plunder it. Why do you think this is a Good Thing? Cheers-