Permanent Fund trustees approve $5.3 million budget increase for fiscal 2028

The annual Percent of Market Value draw from the Alaska Permanent Fund supplies more than two-thirds of the state's unrestricted general fund revenue, the money that pays for most day-to-day government services. On Wednesday, Sept. 2, the Alaska Permanent Fund Corporation's board of trustees voted unanimously in Juneau to approve a fiscal 2028 operating budget that spends $5.3 million more than the current year. The largest single piece is a $3.7 million increase in alternative-markets manager fees.

"The proposed budget has a 2.5% or $5.3 million increment over the approved FY27 budget," APFC budget staffer Scott Jones told the board. Information technology contractual services account for $803,000 of the increase, just under 50 percent over fiscal 2027. Jones said the one-time items include a cybersecurity audit the board schedules every other year, AI consulting, and "replacement of our 33-year-old data center cooling system." Ongoing costs rise because virtualization software charges climbed from $109 per core to nearly $250, he said.

Personal services grow $1.1 million, or 4.3 percent, including a budgeted 5 percent increase covering cost-of-living and merit raises. The corporation has 61 full-time positions with four vacancies, three in investments and one in operations.

Trustees also accepted KPMG's fiscal 2026 audit, which carries an unmodified, or clean, opinion with no outstanding matters. The auditors reported one uncorrected misstatement, tied to a lag in receiving financial information from alternative investments, that they judged immaterial.

The budget timing comes during a governor's transition. Chair Jason Brune said the current governor directed a flat budget with changes listed separately, and that APFC continued its normal process because trustees consider it a fiduciary responsibility to identify the corporation's funding requirements. "The new governor will be responsible for submitting the budget of the State of Alaska by December 15th," Brune said. Staff sent a draft to Acting Commissioner of Revenue Janelle Earls and the Department of Revenue on Aug. 14 and reported no changes since. Trustees voted to forward the proposal to the Governor's Office of Management and Budget for legislative release.

Brune also put a directive on the record: "The trustees are formally asking Devin and his team to put together an AI policy that will show the trustees' support for AI being implemented, but also the necessity for ensuring our data is protected and kept confidential." He asked for it at the board's December meeting.

The budget carries a not-to-exceed allocation of $50,000 for software to replace paper board packets. Trustee Ryan Anderson urged caution: "So if we buy a device and then it's not good in 6 months or whatever, you know, I just I just don't think that's a good use of money." Trustee John Binkley said, "Please don't consider giving me another device in whatever you do."

The board next meets in Nome, where trustees are scheduled to take up a proposed benchmark review committee charter.