By JON FAULKNER

Joshua Church is likely a great investment advisor. His writing is clear. But his rebuttal to Senator Myers fails to account for several core expectations Alaskans have of their elected representatives.  

First among these addresses why Alaskans created the Permanent Fund in the first place: to prevent the legislature from robbing every penny of revenue from the people. Alaskans are tired of our wealth being squandered. Inadequte inflation proofing is a prime example.    

 Second, Mr. Church ignores the majority of Alaskan’s desire—and defensible right–to a FULL PFD under the original statutory formula.

Third, he dismisses a vital concept underpinning the Permanent Fund. It is not an endowment belonging to a board of money managers or to Government. It is a sovereign wealth fund deriving from, and serving the interests of, all Alaskans.  

These ideas need to sink in. Those who oppose these concepts use all manner of deception to obtain control over the Permanent Fund. It is time to shine a bright light on our elected officials and the factions who influence them.   

Alaskans need to know Governor Jay Hammond’s purpose for creating the Fund.  Youth need to read Governor Walter J. Hickel’s book “Who Owns America?” to understand that our citizens are sovereign entities whom he described as shareholders in an “Owner-State”. Native sovereignty and land claims derive from an identical proposition: That government of, by and for the people does not own our resources, or decide by its ultimate authority our rights. Such rights and titles derive from the people whom government serves. Government is not the originator of sovereignty; it is the custodian and protector of it.

The concept of taking annually a “percent of market value” (PMV) sounds wonderful to politicians who want more of our hard-earned income. But recent history proves it doesn’t work. The simple truth is that the concept obligates the people to pay out money for government that it may not have.

Historic market returns may indeed be net positive over time, but a policy based on a certainty that our economy will grow and average a fixed return is dangerous. Who among us takes—regardless of our annual income—a fixed percent of our total wealth annually to fund our living expenses? This concept is a ruse to spend more money than we should.  

Alaskans embrace sustainability—especially our youth who inherit the future , and our Native brethren who rely on the land.   And yet, nothing is sustainable about POMV and our current level of spending. Contrast POMV with the original statutory formula for the PFD that is 100% sustainable because it takes for dividends only 50% of what was actually “earned” from only 25% of natural resource revenues. This equates to a 12.5% royalty on our income—a formula used by oil and gas producers to pay land owners that has proven sustainable for 100 years. 

Once Alaskans understand the simple–who is taking from whom, how and why—other things become clear. Those who wish to protect the Fund and the original PFD want to keep two accounts—the constitutionally protected Principal and the separate Earnings Reserve Account (ERA). Senator Myers is right that merging them into one account weakens legislative safeguards and invites overspending.

Those who wish to syphon 100% of fund earnings into government generally favor merging the two accounts, bypassing legislative compromise, and avoiding budget cuts.   

Alaska’s youth and Native community should wake up to this systematic pillaging by the Legislature of the Permanent Fund Dividend. Back only candidates for office who promise to protect Hammond’s unprecedented gift to all future generations.

The same greed that robs Alaskans of their royalty share fuels the impulse of politicians to spend at unwise and unsustainable levels. This is already eroding our democracy, our middle class and free enterprise.  

The argument that our Permanent Fund doesn’t function like most “model” endowments or trusts misses the point completely. This is OUR money—the peoples fund. We accept the uncertainty that opposition party politics provides. We accept fluctuating dividends. What we don’t accept is duplicity, and select power-brokers, funded by unions, undermining the will of the people. Alaskan’s PFD is being re-directed into wasteful programs and entitlements that undermine our economy.  Politicians complain about revenue uncertainty and “last minute” budgeting. And yet, few embrace forward-based budgeting based on proven income—which, were politicians serious about it—could be easily structured.

The majority of Alaskans embrace a “hands off” policy for the Fund, and full dividends, and yet our representatives reject a popular vote on these issues. Unions intervene to frustrate the will of Alaskans.  We should question those who favor RCV-like referendums, fueled by outside money, but who deny Alaskans a voice in their own Permanent Fund.

To address Mr. Church’s conclusions directly:     

Concern 1: “The Fund hasn’t been managed well enough to deserve more trust.”
This is not a separate issue; this is the main issue. The Board needs to hold open meetings and feel accountable to all Alaskans.  

Concern 2: “A 5% draw is too high.”
Most Alaskans agree, but the reality is, there is no completely “safe” number. Being conservative means basing Fund draws—and the PFD—on actual earnings.

Concern 3: “We should only spend earnings, not principal.”
As to Mr. Church’s chicken and eggs analogy: First, live on only the eggs the chickens lay each month. Next, grow more chickens; finally, never eat more chickens than are necessary to sustain your egg diet.   Further, there is no “outdated” method of investing. Alaskans want to limit spending by government, and not unduly restrict Fund managers from investing in the long term.   

Senator Myers is right. Mr. Church’s prescription will cut the dividend and the value of the corpus, and lead to more government spending because legislative checks and compromise will be removed.    

Jon Faulkner is the president of Alaska Gold Communications, the parent company of Must Read Alaska.

By JOSHUA CHURCH | Investment Adviser Representative, Arbor Capital Management

I like Senator Robb Myers. He cares about Alaska and he’s thoughtful about policy. But on the Permanent Fund, he’s wrong.

Robb argues we should keep two accounts—the constitutionally protected Principal and the separate Earnings Reserve Account (ERA)—because that structure supposedly creates a “hard floor” of protection. He says merging them into one account would weaken safeguards and tempt the Legislature to overspend.

Here’s the truth: merging the accounts, with a constitutional Percent of Market Value (POMV) rule, would actually make the Fund stronger, more efficient, and better protected.

Right now, Alaska manages the Permanent Fund in a way that almost no serious endowment or trust in the world does. We keep “earnings” in a side account, separate from the principal, and let the Legislature draw directly from that pot. This creates uncertainty. Because lawmakers don’t know how much they’ll need until the last minute, fund managers are forced to keep billions in short-term, low-yield holdings to cover potential withdrawals. That drag reduces long-term returns and prevents the Fund from growing as much as it could.

In money management, this is the opposite of best practice. Many major endowment—from Ivy League universities to the largest sovereign wealth funds—use a single-fund model. All assets remain invested together in one pool, and a fixed percentage is withdrawn each year. That structure allows the portfolio to stay fully invested, which maximizes compounding returns over decades. It also stabilizes withdrawals so policymakers can budget with confidence.

This isn’t theory—it’s how the most successful funds in the world operate. Commonwealth North, Alaska’s most respected nonpartisan civic group, studied the issue in detail and unanimously recommended merging the accounts into one endowment with a fixed, constitutionally protected draw of 4–5% per year.

Still, some Alaskans are understandably cautious about change. Let’s take their concerns seriously.

Concern 1: “The Fund hasn’t been managed well enough to deserve more trust.”
That’s a separate issue and if the fund isn’t managed well enough than the legislature needs to hire new managers and do a better job on their reviews. This reform doesn’t give up accountability. In fact, it adds more structure. A single-account model removes the guesswork, locks withdrawals to a predictable rule, and allows managers to focus on long-term growth instead of short-term liquidity. And nothing prevents us from demanding stronger oversight or performance reviews. Those are separate conversations.

Concern 2: “A 5% draw is too high.”
I agree. While 5% may be nice, it’s aggressive if we want to protect long-term value. A safer number is 4% to 4.5%. That’s still high enough to support services and the dividend, but conservative enough to ensure the Fund’s purchasing power is preserved for future generations.

Concern 3: “We should only spend earnings, not principal.”
This one sound sensible, but it reflects an outdated view of investing. Many of the best investments today—think Apple or Amazon—don’t pay large dividends. Their value comes from growth, not “earnings.” By contrast, companies like Ford or Sears returned plenty of dividends but delivered far less wealth over time. Limiting ourselves to only what shows up as “earnings” is like tying one hand behind our back.

A better way to think about it is like a farmer with chickens and a cornfield. Should he only live on the eggs the chickens lay each month? Or should he also plan for the annual harvest, budgeting carefully so it lasts until the next season? The Permanent Fund works the same way. With smart management, we can responsibly draw a small, fixed percent of the Fund’s total value each year, regardless of whether those returns are labeled “earnings” or not.

This reform doesn’t cut the dividend. It doesn’t grow government. What it does is modernize the Fund, align it with global best practices, and lock in protections that keep politicians from raiding “extra” cash.

A unified endowment model brings three benefits:

• More reliable growth – less idle cash, more strategic investing.
• Stable, predictable budgeting – lawmakers can plan with greater confidence.
• Stronger long-term protections – the Fund stays intact and continues to grow.

The Permanent Fund is Alaska’s crown jewel. We owe it to future generations to manage it wisely. Fear of change should not keep us from making improvements that every other successful endowment in the world already uses.

I respect Robb, but on this one, he’s wrong. Merging the accounts under a constitutional draw rule won’t weaken the Fund—it’s the best way to protect it for decades to come.