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The Alaska and national flags fly at half-mast on Tuesday, April 6, 2021 in front of the Alaska State Capitol in Juneau. (James Brooks / ADN) Mouhcine Guettabi, an economist with the Institute for Social and Economic Research, has warned that uncertainty about Alaska’s fiscal future has a cost of its own. The resulting caution among prudent investors discourages productive development and economic growth.
Now it appears that many Alaskans are leaving the state for greener pastures. Under normal conditions, populations grow, but during the past four years, Alaska’s population has declined.
Our legislators’ current push to fund the education budget and avoid pink slips for teachers highlights their recognition of the economic cost of uncertainty. Good for them!
Legislative action — or inaction — can have an inordinate impact on Alaska’s fiscal future, as it did on May 8, 2018, when legislators adopted Senate Bill 26, Alaska’s Percent of Market Value, or POMV, endowment system. Then they pulled together to put annual draws from the Permanent Fund Earnings Reserve Account on a sustainable basis — just in time to replace steep declines in petroleum revenue.
This year, POMV yielded $3.7 billion, or about 70% of the state’s spendable revenue. It is expected […]