Legislature OKs Alaska Permanent Fund bill

FAIRBANKS — The Alaska Legislature approved a compromise bill Tuesday that could shrink permanent fund dividends to help the government close a multi-billion dollar budget gap.

Senate Bill 26, originally created at the request of the governor, also creates rules on how much the Legislature is allowed to draw from the earnings of the $65 billion fund to spend on government versus the PFD each year.

Senate Bill 26 includes a plan to limit draws on the fund’s earnings based on the current market value of the fund, often referred to as percent of market value. For the next three years, the legislature can draw up to 5.25 percent of the fund’s market value for permanent fund dividends and funding the government. After three years, that draw will be dropped to 5 percent.

North Pole Republican Sen. John Coghill said he is pleased with the setup.

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