Official Election Pamphlet --
Senate Concurrent Resolution No. 102



FULL TEXT OF RESOLUTION

[SENATE CONCURRENT RESOLUTION NO. 102 AM]

BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF ALASKA:

WHEREAS declining oil production, low oil prices, inflation, and an increasing population create continuing annual budget deficits of approximately $1,000,000,000 ($1 billion); and

WHEREAS the original intent and purpose of Alaska's Permanent Fund was to save a portion of Alaska's revenue from its petroleum resources, invest that revenue, and use the earnings from those investments to help provide essential public services in the future when Alaska's revenue from its petroleum resources declined; and

WHEREAS the Constitutional Budget Reserve account that has filled the budget gap in recent years is projected to be depleted by 2003; and

WHEREAS financial projections predict the depletion of this savings account will jeopardize the continuation of the dividend program; and

WHEREAS in 1976, Alaskans foresaw the inevitable decline in Alaska's oil production and created the permanent fund; and

WHEREAS the legislature and the governor recognize that Alaskans place a high value on preserving and protecting the permanent fund; and

WHEREAS the legislature and the governor recognize the public's desire to be involved in any decisions involving the permanent fund's direction;

BE IT RESOLVED that if, in an advisory vote, voters approve the question of whether a portion of the permanent fund earnings should be used to fund essential services, the legislature and the governor intend to implement a state fiscal plan that would include the following:

  1. Permanent Fund Protection: The principal of the Alaska Permanent Fund remains constitutionally protected and not subject to appropriation; additionally, the fund is inflation-proofed to protect its value for all Alaskans, including future generations;

  2. Dividend Preservation: After accounting for inflation-proofing, dividend payments to Alaskans are projected to grow with the market value of the permanent fund over time; permanent fund dividends will be guaranteed to be at least $1,700 in 1999 and 2000, and beginning in 2001, the dividend will be based on 50 percent of the annual payment of the accounts that are combined to a new Alaska Income Account;

  3. Spending Reductions: Continue state general fund budget reductions and commit to a long-term budget discipline and efficiencies;

  4. Deposits to Permanent Fund: Provide for deposits into the principal of the Alaska Permanent Fund whenever the balance of the Alaska Income Account exceeds 40 percent of the combined total of the principal of the Alaska Permanent Fund and the Alaska Income Account;

  5. Calculation of Dividends and Funding for Essential Public Services: A new fund known as the Alaska Income Account would be established within the permanent fund; the Constitutional Budget Reserve Fund and the Earnings Reserve Fund would be combined to create the Alaska Income Account; dividends and the amount available to fund essential services are calculated after accounting for inflation-proofing of the permanent fund principal by multiplying the average market value of the Alaska Income Account and the Alaska Permanent Fund by 5.88 percent; this amount would be divided equally between dividends and essential public services;

  6. Accountability: Expenditures related to distributions from the Alaska Income Account will be disclosed with each annual permanent fund dividend; and

  7. Income Tax: No personal income tax is enacted as part of this plan.



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