Alaska money pic

The Alaska constitution states the following:

§ 7. Dedicated Funds – The proceeds of any state tax or license shall not be dedicated to any special purpose, except as provided in section 15 of this article or when required by the federal government for state participation in federal programs. This provision shall not prohibit the continuance of any dedication for special purposes existing upon the date of ratification of this section by the people of Alaska. [Amended 1976]”

Translating that: The Alaska Constitution forbids dedicated funds, except if that dedication was in existence prior to statehood or is passed by the majority of the voters. This reference does not allow the judiciary to grant judgment in opposition to the State Constitution. The Constitution is being ignored. The agencies have taken the lead in establishing unconstitutional dedicated funds.

Here’s a partial list of agencies and funds that hold on to money in excess of appropriations and therefore create their own dedicated fund: 

— Unrestricted and restricted net worth $1,310 Billion Alaska Industrial and Development Authority, AIDEA

— Unrestricted and restricted net worth $1,374 Billion Alaska Energy Administration, AEA

— Unrestricted General and minor funds (GeFonsi) $3,950 billion

— Unrestricted and restricted net worth Constitutional Budget Reserve $1.07 Billion

— Unrestricted and unrestricted net worth $1,575 billion, Alaska Housing Finance Corp, AHFC

— Unrestricted balance of Earnings Reserve Account of the Alaska Permanent Fund $3.8 Billion


Some of the funds, notably the AEA, cover long held and politically powerful sponsors. Think Power Cost Equalization Fund. Amazingly, the Alaska Supreme Court declared it a dedicated fund without the constitutional requirements. When our own Supreme Court violates the law in a finding for their version of the common good, rather than finding for the express will of the people, our Constitution no longer serves as the protector of the people’s will. 

If you want further proof of the problem, just look at the Legislature’s money grab called the Percentage of Market Value. It’s quite simply a raid on the Alaska Permanent Fund.  It’s not a partisan issue with Democrats and Independents versus Republicans fighting each other.  Instead, it is the issue of the next decade since it dictates spending of the principle of the Alaska Permanent Fund when earnings are insufficient to handle the appropriation.  If you are feeling constitutionally insecure, you have that right.

Keep in mind that the Legislature has $12 billion in the bank, enough to solve each and every Alaska problem.  Even with the $12 billion, some members of the Senate and the House are proposing an income tax as part of their fiscal plan for Alaska.  Their idea of a fiscal plan is to swipe your Permanent Fund Dividend and impose an income tax.  Raising taxes on Alaskans or stealing our Permanent Fund dividend should not be the foundation of anyone’s fiscal plan.  Permanent Fund earnings do not justify increases in operation expenses nor additional public funding for education, land management and Medicare and other budgetary purposes.

No new taxes should be passed while the unconstitutional funds exist.  The solution is simple, as Governor Dunleavy has demonstrated.  Sweep excess money from agencies into the General Fund and then observe the Constitution on dedicated funds.

In 2023, our legislators have a choice: Bring to the people at the next election a ballot proposition that establishes dedicated funds for housing, economic development, Permanent Fund earnings or stop treating them as dedicated funds.  If those unconstitutional funds go down at the public vote, enforce sweeping of the funds and appropriating them as the needs arise.  Do not, however, spread the obvious untruth that we’re broke.  We’re not. Do not impose new taxes on Alaskans when we have $12 billion in the bank.

The views expressed here are those of the author.

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OPINION: Don’t impose new taxes when Alaska is illegally sitting on $12 billion

Jim Crawford
Jim Crawford is a third-generation Alaskan entrepreneur who resides in Anchorage. The Alaska Institute for Growth is a local think tank which studies and reports on and may sponsor projects of sustained economic growth for the Alaskan economy. Mr. Crawford known as the Permanent Fund Defender was a member of the Investment Advisory Committee, appointed by Governor Hammond to plan and execute the Alaska Permanent Fund Corporation.