Constraints on the use of Permanent Fund earnings
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Constraints on the use of Permanent Fund earnings by Jack Fargnoli

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Published by Division of Policy, Office of the Governor, State of Alaska in [Juneau] .
Written in English



  • Alaska,
  • Alaska.


  • Special funds -- Alaska.,
  • Alaska -- Appropriations and expenditures.

Book details:

Edition Notes

Statementby Jack Fargnoli.
ContributionsAlaska. Office of the Governor. Division of Policy.
LC ClassificationsHJ2053.A4 F37 1987
The Physical Object
Pagination13, 6 leaves ;
Number of Pages13
ID Numbers
Open LibraryOL2152016M
LC Control Number88621605

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1. Fund Level Investment Guidelines. The fund will use low cost, efficient investment vehicles, such as index mutual funds and/or ETFs. The fund will achieve its objective via long-only, unlevered investments. The fund is prohibited from engaging in short sales and . CONSTRAINTS. Liquidity Need: As a longs -term, permanent fund, liquidity needs are low. Except for distribution requirements and investment purposes, there is no need to maintain any sizable short-term holdings in the fund. Time Horizon: The Montana Constitution requires this fund to forever remain inviolate; therefore.   Mathematical constraints to our fiscal options over any given period of time • We can’t spend money we don’t have. – If we drain our savings we can no longer spend them • How much we add to or draw from savings affects our future investment earnings. – If we draw down the Permanent Fund or other savings. The Permanent Fund was proposed to save wealth and build it for future generations. About a third of Alaskans were against a savings account and voted to spend the money on state development. In , after a statewide discussion and public vote, the Permanent Fund was established as a dedicated Fund by a Constitutional Amendment that directed.

  The Alaska Permanent Fund was established in by a state constitutional amendment. The fund serves to hold a minimum of 25 percent of the state’s income from mineral lease rentals, royalty sale proceeds, mineral revenue-sharing payments from the federal government and bonus money received by the state. However, GASB recently issued Statem Fund Balance Reporting and Governmental Fund Type Definitions, which requires fund balance for governmental funds to be reported in classifications that clarify the constraints on how resources can be spent (as well as the sources of those constraints). This is a significant departure from the decades.   The Permanent Fund has two parts: the Principal and the Earnings Reserve Account (“ERA”). Both are invested together using the same asset allocation, but they are very different in how they can be used by law: the Principal is permanent savings, the ERA is available to spend.   and bonds. Irving earns labor income y today today and y future in the future. Letting c denote consumption, Irving faces the following twobudgetconstraints: c today = y today −(f future −f today) () c future = y future +(1+R)f future. () Both equations have the form “consumption equals income less saving.” The first equation applies to “today,” and f.

Wielechowski contends that the framers of the constitutional amendment intended to provide future legislatures “maximum flexibility” in using the Permanent Fund’s income, including the dedication of earnings Wielechowski also contends that the ballot language46 and newspaper articles emphasizing future legislative flexibility bolster his position The State disagrees, arguing that the .   The statutes creating POMV state that the Legislature may not appropriate from the Permanent Fund’s earnings an amount for public services that exceeds the “amount available for appropriation” in a fiscal year.   Governmental accounting maintains tight control over resources, while also compartmentalizing activities into different funds in order to clarify how resources are being directed at various programs. This approach to accounting is used by .   He estimates the state can spend $ billion a year -- including $ billion for the Permanent Fund dividend -- and sustain that into the future, basing .