Old oil tax structure promised brighter future

When I was in the Legislature, I chaired the House committee that, with a like Senate committee, drafted the original investment strategy for the Permanent Fund.

We expected the Permanent Fund to grow until its earning capacity exceeded oil revenues, at which time we hoped voters would pass an additional constitutional amendment committing all future oil revenues to the Fund, and authorizing the Legislature to draw out a fixed 6 percent per year, guaranteeing a stable economy and dividends forever.

How close were we? Last year, unrestricted oil revenues totaled $6.352 billion. The Fund is nearly $50 billion. Add $9 billion from the budget reserve to get to $59 billion. Historic 10 percent growth over five years equals $95 billion.

ACES was socking away an extra $3 billion per year. Total in five years, $110 billion.

Here’s the math: 6 percent of $110 billion equals $6.60 billion. With the right leadership, we were six years from guaranteed dividends, a perpetual balanced budget, and an economy free of booms and busts.

So close. But it won’t happen unless Senate Bill 21 is repealed.

Ray Metcalfe

Anchorage