Deven Mitchell, CEO of the Alaska Permanent Fund Corp., far right, answers questions from legislators on calls from trustees to turn the fund into an endowment on March 4, 2025 in Juneau. Jason Brune, chair of the fund’s board, sits to the left of Mitchell. (Sean Maguire/ADN)
JUNEAU — The Alaska Permanent Fund has a serious risk of failing to fund state services and the Permanent Fund dividend in the next decade, according to projections by the nonpartisan Legislative Finance Division.
The Permanent Fund’s board has long urged lawmakers to convert the fund’s two-account structure into an endowment model to ensure its long-term sustainability. Legislators have started discussing amendments to the Alaska Constitution to follow the board’s recommendations.
Annual withdrawals would be capped at 5% of the Permanent Fund’s overall value. But that figure could be subject to debate.
The Legislature in 2018 approved Senate Bill 26, which established the current 5% draw limit in state statute. The measure allowed Permanent Fund earnings to start contributing to the state budget.
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Since then, the Permanent Fund has provided the bulk of state revenue for services and the PFD. But the fund has been stressed.
According to modeling by the Legislative Finance Division, the Permanent Fund has an almost 50% chance in the next decade of failing to provide the annual draw for services and the dividend.
”That’s scary,” said Jason Brune, chair of the Permanent Fund’s board.
Permanent Fund managers started the fiscal year in July with a roughly $600 million shortfall. Investment earnings have since helped bridge that gap, but Deven Mitchell, CEO of the Alaska Permanent Fund Corp., said that exposed a worrying trend.
”That was the first time that had happened. So, it’s the canary in the coal mine,” he said Tuesday to the joint Legislative and Budget Audit Committee.
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Most of the $81 billion Permanent Fund is constitutionally protected. However, the fund’s investment earnings are deposited into the $9.4 billion Earnings Reserve Account, which can be spent by a simple majority of legislators.
For over 20 years, the Permanent Fund’s board of trustees has called on lawmakers to establish a single-account structure and a 5% draw limit in the constitution. The board issued a 49-page resolution last year urging lawmakers to enact those reforms.
Trustees warned that depleting the spendable portion of the Permanent Fund would “immediately result in a fiscal crisis” that would jeopardize the budget and the PFD.
“We want to ensure that there’s an ability to provide a payment to the state of Alaska each and every year. We don’t want to have a 46% probability of failure,” Mitchell said.
Prior to the enactment of SB 26, Alexei Painter, director of the Legislative Finance Division, said the state had been running a $3 billion deficit each year for several years.
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This year, legislators are facing a $536 million deficit over two fiscal years based on status quo spending. Senators recently unveiled revenue measures, including oil tax hikes, as ways to potentially bridge that fiscal gap.
“Oil is not paying the bills anymore,” Anchorage Republican Sen. Cathy Giessel said Tuesday.
Advocates say a single-account structure would act as a spending cap for lawmakers and ensure the long-term stability of the Permanent Fund. Additionally, it would avoid the need for an annual inflation-proofing appropriation — $1 billion this year — to preserve its real value.
Anchorage independent Rep. Calvin Schrage introduced a constitutional amendment last month that followed the board’s recommendations. He said the Permanent Fund provides a reliable source of revenue, and that it should be protected in the constitution.
“There’s a real risk that the Legislature could overdraw the fund. We’ve seen attempts to do that multiple times,” he said.
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Lawmakers say there is a broad recognition that Permanent Fund reforms are needed.
Anchorage Sen. James Kaufman, a member of the Senate’s GOP minority, said the potential for a cash flow crunch is one of the state’s “most ignored financial issues.”
Kaufman introduced his own constitutional amendment proposal for a single-account structure. The draw rate would be capped at 5.25%, but Kaufman said Monday that it could be amended.
Sitka Republican Sen. Bert Stedman argued Tuesday that the 5% limit was already too high. He said that pushed the fund’s managers into “more aggressive asset classes” to meet its statutory requirements.
But the Legislative Finance Division cautioned that lowering the draw rate to 4.5% would see the deficit balloon by an additional $380 million.
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Members of the Senate majority are set to introduce their own Permanent Fund constitutional amendment proposal in the coming days, Giessel said Tuesday.
A constitutional amendment requires support from two-thirds of lawmakers in the House and the Senate. Unlike regular bills, the governor cannot veto a constitutional amendment. Instead, it would then go for an up-or-down vote at the next statewide election.
A new home under construction in Potter Valley in Anchorage. (Loren Holmes / ADN)
This June, two very different offers reach Alaska families, and both amount to the same thing: $10,000. The difference is everything.
Bill Walker, running for governor, would hand every eligible Alaskan a one-time $10,000 check and then end the Permanent Fund dividend for good. Ask one question: Where does his $10,000 come from?
It comes from the Permanent Fund, the people’s own money and the savings Alaskans built for their children. Walker would spend that endowment once to pay Alaskans to give up the yearly dividend forever.
Think about what that does. It cancels the annual check that gives a family a reason to keep an Alaska address and replaces it with a single payout. You hand people their own savings, call it a gift and cut the tie that held them here in the same motion. It is the oldest mistake in governing money: raid what you have saved to buy a moment’s applause and call the spending generosity.
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A plan that spends the people’s savings to send the people away is not bold. It is foolish.
Now consider the other $10,000. Through Alaska Housing Finance Corp., the state offers families up to $10,000 to build a new, energy-efficient home. AHFC raids nothing. It earns its own way. Over the years, it has returned more than $2 billion to the state treasury, and it spends some of that income the way any good business does: to win a customer.
Here, the customer is an Alaskan who wants to own a home, put down roots and stay.
That is the oldest sound move in business: Invest a little of what you earn to bring in someone who stays. The homeowner remains, the community gains a family and the corporation keeps earning. The money spent comes back. A plan that puts earnings to work to bring people home is not charity. It is clever.
Same amount. Opposite source. Opposite wisdom. One spends savings; the other spends earnings. One pays Alaskans to leave; the other pays them to stay. One empties the state; the other fills it.
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This Homeownership Month, the choice is the size of a single check, and the whole question is where the check comes from and what it asks of you. Ten thousand dollars of your own fund, to wave you goodbye. Or $10,000, earned and reinvested, to help you stay and build.
Evan Swensen is the publisher of Publication Consultants in Anchorage and the author of “What’s the Money For: A Permanent Fund Mortgage Proposal.”
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A man with the same name and party affiliation as Alaska Republican U.S. Sen. Dan Sullivan is eligible to challenge the senator in the August primary, a judge ruled Friday.
Superior Court Judge Thomas Matthews’ ruling overturns a June 15 decision by Division of Elections Director Carol Beecher to disqualify the challenger and keep him off the primary ballot. Matthews’ ruling can be appealed to the state Supreme Court.
Attorneys for the state have said Tuesday is the deadline for a final ruling so that ballots for the Aug. 18 primary can be printed.
The judge ruled that the division’s decision to exclude Dan J. Sullivan because his candidacy was not “in good faith” was not based on the Constitution, Alaska law or the division’s own regulations. The retired teacher from the small fishing community of Petersburg filed to challenge the incumbent.
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Dan Sullivan, who has filed to run for U.S. Senate in Alaska, poses for a photo Friday, June 26, 2026, in Petersburg, Alaska.
Katie Holmlund/AP Photo
“Instead, the decision was based upon a new, previously unstated, ‘good faith’ criteria,” the judge wrote.
The division is appealing the decision, Sam Curtis, a spokesperson with the state Department of Law, said by email Saturday. Jeffrey Robinson, an attorney for Dan J. Sullivan, said in an email he expected the division to appeal and couldn’t comment until the Alaska Supreme Court rules on the case.
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The controversy over the two Dan Sullivans has underscored the stakes involved in the incumbent’s reelection campaign. The Alaska race is one of about half a dozen U.S. Senate races expected to be highly competitive in the fall, and the seat is one Democrats are trying to flip in their efforts to try to regain the majority. But it’s expected to be an uphill battle in a state that President Trump won by 13 points in 2024.
The senator and allies, including the National Republican Senatorial Committee, have condemned the challenger’s efforts to join the race, arguing his presence could confuse voters. Republican Lt. Gov. Nancy Dahlstrom earlier this month opened an investigation into the non-Senator Sullivan’s candidacy.
Under Alaska’s election system, the top four candidates from the primary, regardless of party, move on to the ranked-choice November general election.
The senator has accused the challenger Sullivan of working with Democrats and the campaign of Democratic former U.S. Rep. Mary Peltola — who is considered the senator’s main opponent — to cause confusion and boost Peltola’s chances. The sitting senator brought the situation to reporters’ attention at the Capitol earlier this month, accusing Democrats of being “complicit in trying to trick Alaskans” to “rig an election in their favor.”
Sen. Dan Sullivan, R-Alaska, speaks to reporters at the Capitol in Washington, D.C., June 30, 2025.
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Mark Schiefelbein/AP Photo
Peltola’s campaign and state Democrats have denied the allegation, as has the challenger.
Sen. Sullivan and Peltola are the highest-profile candidates in the crowded race and the only ones to report raising any money.
Beecher has said she determined the challenger Sullivan is not eligible to run because his candidacy was not filed in good faith and instead was done with an intent to confuse voters. She said he had registered to vote as Daniel J. Sullivan Jr. and, in conjunction with his candidacy, changed his party affiliation to Republican. She also cited similarities between his campaign website and the senator’s, and his work with a consultant whose clients have included some Democrats. She did not mention finding any evidence of alleged coordination.
In arguing to keep the challenger disqualified, attorneys for the state pushed back on suggestions the ballot could be designed in a way to reduce voter confusion over two candidates with the same name and party running for the same office.
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“The Constitution does not require States to place a sham candidate on the ballot and then attempt to mitigate the damage through design choices,” attorney Rachel Witty, with the Alaska Department of Law, and outside attorneys Christopher Murray and Michael Francisco wrote in court filings.
Attorneys for the challenger Sullivan argued that the Constitution lays out three exclusive qualifications for the Senate, addressing only age, citizenship and residency. They said Beecher lacked the legal authority to boot their client off the ballot.
The challenger Sullivan has said that sharing a name and party affiliation with the incumbent gave him “an instant megaphone.” But the 69-year-old retired teacher and former U.S. Forest Service employee said he had considered a run for some time and had grown frustrated with the senator.
He initially was certified on the state’s candidate list as Dan J. Sullivan, with the senator listed as Dan S. Sullivan and identified as the incumbent.
