Permanent Fund turns 50 as dividend rests on appropriation, not formula

The Alaska Permanent Fund Corporation released its 2026 annual report, "What Alaska Built," on Monday, marking the fund's 50th year. The report puts the fund at $91.9 billion on June 30, after a 12.42% return in fiscal 2026 and a record $8.2 billion in statutory net income. The Alaska Permanent Fund now supplies about 66% of the state's unrestricted general fund revenue, the corporation told the Alaska State House Finance Committee. Deven Mitchell, APFC's executive director and CEO, said stewardship must honor the foundations laid by past leaders while adapting to shifting markets and the state's growing reliance on the fund.

The dividend has changed shape over the past decade. Gov. Bill Walker vetoed roughly half of the fiscal 2017 dividend appropriation in 2016, and that year's payout came to $1,022. A legislative briefing calls the veto the first departure from the statutory formula since 1982. It says Walker meant to draw attention to a fiscal crisis after lawmakers rejected his plan to pair fund earnings with new revenue.

The Alaska Supreme Court later ruled in Wielechowski v. State that the statutory transfer language did not override the Legislature's power to set appropriation amounts. Senate Bill 26 followed in 2018, setting a percent of market value draw at 5.25% of a five-year average, later cut to 5% for fiscal 2022. Those draws totaled $26.2 billion from fiscal 2019 through fiscal 2026, funding both dividends and state services. APFC has committed $4.0 billion from its Earnings Reserve Account, which held $18.1 billion on June 30, to the fiscal 2027 draw, and another $4.1 billion from that account for fiscal 2028.

The fund's trustees want that draw written into the constitution. The report says the board supports an amendment merging the fund's two accounts into a single protected endowment, which would constitutionally protect about 95% of fund assets and set a rules-based annual draw.

Alaskans for Sustainable Budgets argues the burden of dividend cuts falls unevenly. "Closing Alaska's fiscal gap with PFD cuts puts 2½ times the burden, as a share of income, on middle-income households as on the top 20%," the group wrote in a column promoted on Bluesky over the weekend.