Barring some catastrophic occurrence that I can't foresee at this point, I don't see a need to reduce the PFD checks.
When we were having this discussion a couple years ago, the earnings reserve had about $8 billion and today it has almost $19 billion in it. The PFD was never the problem, it was our desire to keep spending more in the operating budget. So for the foreseeable future, I don't believe that we need to reduce the checks.
Now, if something happens, that I and others don't envision at this point, I would go to the people of Alaska with an advisory vote for some type of change to the Permanent Fund, Permanent Fund dividend. And engage the people of Alaska. And have a discussion with them saying, for example, that we need to reduce the PFD to pay for government for these reasons and have that discussion with them, engage them and provide them an opportunity to have a say in the process.
I could see a situation here where if we had a massive earthquake and we had to repair every school and fix every road and everything else like that, I think Alaskans would get together on that.
I believe it's very important to have a formula for the PFD that's that five-year average that we've had. I'd apply it toward the POMV (percent of market value) rather than the income. If you think of it, the income could be how much snow fell on Denali vs. how big did the mountain get. We're building that PFD into a big mountain. So that 5 percent of the whole mountain, I think, is a fair way to go about it. That's the way other sovereign wealth funds and foundations do it.
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