To the editor: Years ago, the Legislature considered a plan to build a permanent fund dedicated to funding all levels of education in our state, including the University of Alaska. We are a resource-rich state with the foresight to build a permanent fund but without the vision to permanently fund what the Alaska Constitution specifically requires us to do in Article VII: provide for general education. If we had established a permanent fund to do that, we might not have a significant budget deficit, because education is one of the largest line items we have. Communities would not have to routinely anguish over the source of revenue to help fund school operations.
The Legislature may convene again this year to deal with the PFD and possibly adjust its funding formula. We could start now. Leave the existing permanent fund intact but divide future deposits into “general” and “educational” categories. The Educational Permanent Fund would work like the general fund, with deposits going into principal and earnings used to inflation-proof it. A sustainable portion of the earnings balance could then be used each year to help fund education in Alaska. The General Permanent Fund could continue to be used to fund other government operations and an annual PFD.
It would take some time to fully fund the entire educational system. At $30 billion, an educational fund using a 5.25% of market value annual draw should provide about $1.6 billion per year, the current unrestricted general fund amount needed to fund all of Alaska’s educational and early childhood development programs, including the university, in fiscal 2020. The fund would keep growing. By the second year, a small amount could be drawn, slowly easing pressure on the state budget over time.
This proposal demands fiscal prudence by our school systems and the university. Proper oversight is essential to ensure that this resource is spent wisely. That is the job of the Legislature and administration.
Remember, if you plan for a year, plant rice. If you plan for 10 years, plant trees. If you plan for 100 years, educate your children.