Why protecting & growing the Fund matters
The Permanent Fund isn't just a savings account — it's increasingly how Alaska pays for everything. That makes the choices we make now decisive for the generations who come after us.
The big picture
The quiet revolution in Alaska's finances
For decades, oil paid Alaska's bills. That era is ending — and the Fund is stepping into its place.
Oil is declining
North Slope production is a fraction of its peak. The royalty stream that built the Fund — and once funded most of state government — keeps shrinking.
The Fund now leads
The annual draw from the Fund's earnings has become the single largest source of the state's unrestricted general revenue, ahead of oil.[1]
No income or sales tax
Alaska has no statewide income or general sales tax. That makes the Fund's earnings not just helpful but structural to the budget.
The bottom line
If the Fund falters, there is no easy backup. Protecting and growing it is, in practice, the same as protecting Alaska's schools, troopers, ferries, and the dividend itself.
The risk worth knowing
The Fund could fall short — sooner than people think
Here's the uncomfortable part. Because the spendable Earnings Reserve is a separate, finite account, there's a real chance it runs dry in a stretch of weak markets — leaving the state unable to pay both the dividend and for services.
A 2025 state forecast estimated roughly a 46% chance within the next decade that the Fund won't be able to fully fund both.[2] Longtime budget leaders have openly warned against overdrawing the Fund to pay larger dividends.[3]
That risk is the strongest argument of all for discipline now — and for structural reform.
The case to protect — and grow — it
A larger, better-protected Fund could do something remarkable: pay a meaningful dividend to every Alaskan and shoulder a stable share of the cost of government — without an income tax — far into the future. Getting there rests on a few ideas:
Lock in the rules
Today the Fund's principal is constitutionally protected, but the spending rule (POMV) and the dividend are only in statute — changeable by a single vote. Writing a sustainable draw and a dividend guarantee into the constitution would shield both from year-to-year politics.[4]
Keep feeding the Principal
Inflation-proofing and depositing a healthy share of royalties and surpluses into permanent savings keeps the Fund's real value — and its earning power — growing for the next generation rather than being consumed today.
Spend below what you earn
A draw set safely below long-run returns lets the Fund grow and pay out at the same time. Discipline now compounds into a far larger Fund — and a larger dividend — later.
A promise to the future
The 1976 voters saved a windfall they could have spent on themselves. Honoring that gift means leaving the next 50 years of Alaskans a Fund that's bigger, safer, and still shared by all.
One idea on the table: a single account
A growing number of reformers — and APFC itself has studied it — argue for combining the Principal and Earnings Reserve into one account governed by the POMV draw.[5]
The pitch: a single fund would act as a natural spending cap (you can only ever take the POMV percentage), it would end the overdraw risk of a separate, drainable reserve, and it would remove the need for a yearly inflation-proofing appropriation — currently around $1 billion a year — because the whole fund would be protected.[5]
It's not free of trade-offs — it typically requires a constitutional amendment, and it ties the dividend and services to the same capped draw. But it's the clearest structural fix on offer, and worth understanding.
Interactive
See it for yourself: the Fund's future
Move the dials and watch the Fund's real (inflation-adjusted) value over time. It's a simplified model — but it shows why the draw and inflation-proofing matter so much.
Illustrative model in today's dollars: yearly real change ≈ return − draw − inflation (with an extra inflation drag when inflation-proofing is off). Not a forecast — real returns swing year to year.
An honest look at the trade-offs
Good civic education doesn't hide the hard parts. Reasonable Alaskans disagree, and the choices involve real tension:
Dividend vs. services
Every dollar of draw can go to a dividend or to government. A bigger guaranteed dividend can mean less for schools and services — or pressure for new taxes. There's no free lunch.
Flexibility vs. guarantees
Locking rules into the constitution protects them from politics — but also removes flexibility to respond to a genuine crisis. Where to draw that line is a real debate.
Today vs. tomorrow
Larger payouts now help families facing high costs today; restraint now builds a bigger Fund for Alaskans not yet born. Both are legitimate goods in tension.
Our view is straightforward and modest: whatever the right balance, the Fund should be protected, kept growing, and governed transparently so it can keep serving Alaskans for another half-century. How exactly to split the benefits is a decision that belongs to an informed public.