Alaska Permanent Fund hits record $85 billion, even as Alaskans see smaller dividends

The Alaska Permanent Fund has reached a historic milestone, surpassing $85 billion for the first time in its more than 45-year history, a remarkable achievement that highlights the state’s unique approach to managing its oil wealth.

Established in 1976 by a voter-approved constitutional amendment, the Alaska Permanent Fund was designed to convert a portion of the state’s oil royalties into a permanent endowment, with earnings distributed annually to residents as dividends. Over the decades, the fund has grown steadily, benefiting from investment returns and ongoing contributions from oil revenues. Today, the fund underpins a larger share of Alaska’s government budget than oil royalties themselves, making it a central pillar of the state’s fiscal health.

When Gov. Mike Dunleavy took office, the fund stood at roughly $60 billion. Since then, it has grown to more than $85 billion, which generates an additional billion dollars annually that could fuel Alaska’s economy. Unfortunately, much of that new wealth does not flow directly to Alaskans through their Permanent Fund dividends. Instead, legislative changes over recent years have siphoned billions from Alaskans’ dividends to government spending, even as the governor has sought to moderate overall state spending increases.

Still, $85 billion is a major milestone for Alaskans for a fund that has weathered volatile oil prices, economic downturns, market swings, and pressure to invade the corpus, to become one of the largest state sovereign wealth funds in the world.

Since the Legislature passed the Percent of Market Value formula in 2018, the state has only been allowed to spend a set percentage of the fund’s value annually. While the POMV formula was designed to provide predictable, sustainable payouts, it also means that much of the fund’s earnings, held in the earnings reserve account, remain off-limits for government spending.

The fund’s current growth comes amid renewed debate over its structure. Some Democrat and even Republican lawmakers have floated proposals to consolidate the earnings reserve account with the fund’s principal, a move that others warn could be a first step toward draining the corpus itself to pay for ongoing government operations. Such a change would mark a sharp departure from the fund’s original intent: To preserve Alaska’s oil wealth for future generations.

The Permanent Fund dividend, this year set by the Legislature at $1,000 per eligible Alaskan, will hit bank accounts around Oct. 2 for direct deposit, and Oct. 23 for paper checks.

Robb Myers: Why we should not combine Alaska Permanent Fund accounts