Michael J. Burns

Alaska Permanent Fund Corporation

Company type	State-owned corporation
Industry	Sovereign wealth fund management
Founded	1980
Headquarters	Anchorage, Alaska , United States
Key people	Marcus Frampton (Chief Investment Officer)
Products	Management of Alaska Permanent Fund and other state-held funds
Owner	State of Alaska

The Alaska Permanent Fund (APF) is a constitutionally mandated permanent fund overseen by the state-owned Alaska Permanent Fund Corporation (APFC). Established in 1976 through Article 9, Section 15 of the Alaska State Constitution during the administration of Governor Jay Hammond and Attorney General Avrum Gross, the fund was initially managed by the Department of Revenue Treasury Division until 1980. Subsequently, the Alaska State Legislature created the APFC to administer the fund's assets.

By 2019, the fund's valuation reached nearly $64 billion, primarily funded through revenues from oil and mining activities. On average, it has disbursed an annual dividend close to $1,600 per Alaskan resident (adjusted to 2019 dollars). The majority of the fund’s income supports the Permanent Fund Dividend (PFD), which serves as a prominent example of a practical basic income program.

History

The inception of oil extraction on Alaska’s North Slope via the Trans-Alaska Pipeline System prompted a constitutional amendment that established the Permanent Fund. This amendment mandated that at least 25% of oil revenue be allocated into a dedicated investment fund intended to benefit future generations after oil reserves are exhausted. However, this percentage excludes oil companies' property and income taxes, resulting in an effective contribution closer to 11%. The Fund was created to safeguard a portion of oil wealth from immediate political expenditure, addressing concerns following rapid legislative spending of the state’s $900 million oil lease bonus from 1969.

The Alaska Permanent Fund Corporation is responsible for managing the Fund’s investments as well as other state-held assets, with an emphasis on achieving prudent returns rather than financing local development projects. Legislative authority determines how income from the Fund is spent. From an initial investment of $734,000 in 1977, the Fund expanded to approximately $53.7 billion by July 2015, driven by sound management strategies, inflation adjustments, and additional deposits during periods of economic growth. Annual earnings are divided among inflation-proofing measures, administrative costs, and distributions through the Permanent Fund Dividend.

As a participant in the International Forum of Sovereign Wealth Funds, the Fund complies with the Santiago Principles, which outline best practices for sovereign wealth management. Marcus Frampton currently serves as chief investment officer. In July 2015, Michael J. Burns, who led the corporation since 2004 as executive director, passed away.

Alaska Permanent Fund Corporation

The Alaska Permanent Fund Corporation functions as a state government entity tasked with managing and investing both the Alaska Permanent Fund and other legislatively designated funds.

Board of trustees

The corporation is governed by a Board of Trustees appointed by the governor:

• Jason Brune, chair, appointed in 2022 by Governor Dunleavy
• Adam Crum, vice-chair, appointed in 2022 by Governor Dunleavy
• Ryan Anderson, appointed in 2023 by Governor Dunleavy
• Craig Richards, appointed in 2021 by Governor Dunleavy
• Ethan Schutt, appointed in 2020 by Governor Dunleavy
• John Binkley, appointed in 2025 by Governor Dunleavy

Permanent Fund Dividend

The Permanent Fund Dividend (PFD) provides yearly disbursements to Alaska residents who have continuously lived in the state for an entire calendar year and plan to stay permanently. Individuals absent for more than 180 days without an approved reason or those incarcerated due to felony or specific misdemeanor convictions are ineligible.

The dividend amount is determined using a five-year average of the fund’s statutory net earnings, calculated through the following steps:

1. Aggregate the net income of the fund from the current and previous four fiscal years
2. Apply a 21% multiplier
3. Divide the result by 2
4. Deduct obligations and expenses from the prior year
5. Divide by the number of qualified applicants

Historically, payments have varied from $331.29 in 1984 to a high of $3,284 in 2022. In 2008, a unique one-time distribution of $1,200 was authorized, funded by state natural resource revenue.

While the fund’s principal is safeguarded by the state constitution, its income is treated as general fund revenue. The U.S. Supreme Court struck down an earlier formula that based payouts on residency duration; currently, all eligible residents receive equal dividends regardless of how long they have lived in Alaska.

PFD distributions are taxable under federal law but exempt from state income tax, as Alaska does not impose one. Serving as a form of basic income, the PFD has played a role in maintaining Alaska’s relatively high economic equity by providing unconditional cash support during periods when other states cut back on assistance programs.

Annual individual payout

Below is a summary of yearly individual PFD amounts expressed in U.S. dollars.

Year	Dividend amount (USD)	Inflation-adjusted dividend amount (Template:Inflation/year USD)	Notes
1982	1,000.00	Template:Inflation
1983	386.15	Template:Inflation
1984	331.29	Template:Inflation
1985	404.00	Template:Inflation
1986	556.26	Template:Inflation
1987	708.19	Template:Inflation
1988	826.93	Template:Inflation
1989	873.16	Template:Inflation
1990	952.63	Template:Inflation
1991	931.34	Template:Inflation
1992	915.84	Template:Inflation
1993	949.46	Template:Inflation
1994	983.90	Template:Inflation
1995	990.30	Template:Inflation
1996	1,130.68	Template:Inflation
1997	1,296.54	Template:Inflation
1998	1,540.88	Template:Inflation
1999	1,769.84	Template:Inflation
2000	1,963.86	Template:Inflation
2001	1,850.28	Template:Inflation
2002	1,540.76	Template:Inflation
2003	1,107.56	Template:Inflation
2004	919.84	Template:Inflation
2005	845.76	Template:Inflation
2006	1,106.96	Template:Inflation
2007	1,654.00	Template:Inflation
2008	2,069.00	Template:Inflation	Included a $1,200 Alaska Resource Rebate.
2009	1,305.00	Template:Inflation
2010	1,281.00	Template:Inflation
scope=row 2011 11174 11174 -	- 2012 878 878 -	- 2013 900 900 -	- 2014 1884 1884 -	- 2015 2072 2072 -	- 2016 1022 1022 Dividend lowered from initial $2,052 estimate by Governor Bill Walker’s veto.	- 2017 1100 1100 Legislature reduced estimated $2,300 dividend.	- 2018 1600 1600 Legislative measures cut estimated $2,700 dividend.	- 2019 1606 1606 -	- 2020 992 992 -	- 2021 1114 1114 Benefited from elevated oil prices.	- 2022 3284 3284 Record-high distribution; $662 energy relief portion exempt from taxes.	- 2023 1312 -	- 2024 1702 -

Constitutional Budget Reserve

Created in 1991, the Constitutional Budget Reserve (CBR) serves as a financial buffer alongside the Permanent Fund to address the volatility of oil revenue. Its funding sources include the collection of back taxes and other state income. Any withdrawal from the CBR mandates approval by a three-quarters majority in the legislature and must be reimbursed. Presently, the general fund carries an outstanding balance of approximately $4 billion owed to the CBR, which has been used to support consistent public expenditure.

The escalating debt balance has sparked apprehension regarding its eventual repayment. The CBR operates under the assumption of a steady general fund deficit that would allow for balanced repayments over time. However, critics contend that diminishing oil revenues coupled with increasing state spending will hinder full reimbursement, effectively permitting the government to sidestep budget reductions, debt recognition, or tax hikes.

Former state senator Dave Donley observed that the supermajority voting requirement, designed to limit CBR usage, paradoxically grants influence to the legislative minority. This minority leverage frequently results in withdrawals tied to "Christmas tree bills" laden with concessions benefiting both parties, thereby expanding expenditures drawn from the reserve.

Dividends and spending

While the Permanent Fund has generally produced surpluses after disbursing the Permanent Fund Dividend (PFD), the state's general fund has experienced substantial deficits. When combined, these funds have typically reflected an overall surplus. The Fund’s initial intent was somewhat ambiguous, sparking debate about its role in addressing current budget deficits. Some interpret it as a long-term financial resource for government operations following the oil boom's end; others emphasize that its purpose shifted with the introduction of the Dividend program in 1982.

Public backing for the Dividend remains strong. In 1999, despite depressed oil prices and official campaigns advocating for partial use of Permanent Fund earnings to support government spending, voters overwhelmingly rejected this approach by nearly 84%. The dividend’s widespread popularity safeguards both its continuation and the Fund’s principal amount, thereby limiting lawmakers’ readiness to allocate earnings for other purposes due to political risks associated with reducing public payments.

Percent of Market Value (POMV) proposal

In 2000, the Alaska Permanent Fund Corporation (APFC) Board of Trustees suggested adopting a Percent of Market Value (POMV) approach to managing the Permanent Fund, which would require amending the state constitution. This method would cap annual withdrawals at 5% of the fund’s market value, leaving allocation decisions to legislative discretion. Under current rules, lawmakers may appropriate all realized earnings. Initial proposals recommended dividing this 5% withdrawal equally between dividends and government expenditures; however, POMV legislation failed in the Legislature largely due to its association with unpopular government spending. A significant majority of Alaskans (84% in 1999) opposed any governmental interference with the fund.

Between 2015 and 2017, POMV resurfaced as a topic amid a steep decline in North Slope oil prices—from $107.57 per barrel in FY2014 down to $50.05 in FY2017—resulting in an 80% drop in state revenues and creating a multibillion-dollar fiscal shortfall. The Legislature enacted a law permitting an annual withdrawal equal to 5.25% of the average Permanent Fund balance calculated over five of the last six years. This averaging mechanism smooths out volatility, effectively setting withdrawals near 4.2%, which helps maintain the fund’s real value given its approximate 9% annual return rate. This policy is expected to generate $2.7 billion in FY2019 and increase as the fund grows.

Central debate focuses on dividend amounts: The House bill proposes allocating 33% of withdrawals toward dividends and 67% toward government services, plus an additional 0.25% set aside for inflation protection—resulting in $1.8 billion for public services and around $900.9 million for dividends (approximately $1,250 per eligible Alaskan). Conversely, the Senate bill assigns only 25% for dividends (about $700 million or $1,000 per person), directing $2 billion toward government expenditures.

Oil revenue projections remain flat through FY2027, with traditional reserve funds potentially exhausted by FY2019. Nevertheless, since the Permanent Fund’s value exceeds $60 billion, it offers substantial potential to narrow budget deficits. Given that POMV alone cannot fully resolve fiscal gaps, legislators are also exploring tax-related options.

Wielechowski Litigation

In 2016, Alaska State Senator Bill Wielechowski, alongside former senators Rick Halford and Clem Tillion, initiated legal action against the State of Alaska contesting Governor Bill Walker's veto that lowered the Permanent Fund Dividend (PFD) distributions. The plaintiffs contended that the veto breached laws requiring automatic transfers from the Permanent Fund’s earnings reserve to the dividend account without needing legislative approval. Nonetheless, the Alaska Supreme Court upheld the governor’s veto authority, determining that dividend disbursements necessitate legislative appropriation and thus fall under the governor’s veto power.

This ruling effectively tied PFD funding to yearly legislative budget decisions, subjecting it to competition with other state fiscal priorities.

Impact

A 2018 analysis revealed that while the Alaska Permanent Fund dividend did not affect total employment levels, it led to a 1.8 percentage point (17%) increase in part-time employment. These findings imply that a universal and ongoing cash transfer does not substantially diminish overall employment rates.

Research from 2019 identified a 14% surge in substance abuse incidents immediately following PFD payments, with a sustained 10% increase over four weeks. This was somewhat counterbalanced by an 8% reduction in property crimes, while violent crime rates remained stable. Yearly crime rate fluctuations were minimal, suggesting concerns regarding crime escalation linked to universal cash payments may be exaggerated.

A 2024 study published in Poverty & Public Policy found that the Alaska Permanent Fund lowered the number of residents living below the national poverty line by 20% to 40%, notably reducing poverty among rural Indigenous Alaskans from 28% to less than 22%.

See also

• Asset-based egalitarianism
• Universal basic income
• Citizen's dividend
• North Dakota Legacy Fund
• Permanent University Fund – supports Texas universities through oil revenues
• The Government Pension Fund of Norway
• Alaska v. Amerada Hess

External links

• Alaska Department of Revenue – Permanent Fund Dividend
• Sovereign Wealth Fund Institute - Alaska Permanent Fund Page