Walker proposes Permanent Fund support for economic development

For the first time, probably since Walter Hickel was governor, a proposal to use the Permanent Fund to foster economic development has been put forth by a state chief executive. At a campaign forum in Anchorage Aug. 29, Gov. Bill Walker, who is running for reelection, said he would support a small percentage of the $65 billion Permanent Fund, perhaps 1 percent (or $600 million) being set aside to help finance small business expansion. In his comment at the Accelerate Alaska conference, Walker cited his visit to a small Southeast oyster farm which could not meet growing demand and was hindered in expanding by lack of financing. There have been periodic calls over the years for investment by the Fund in Alaska projects but this has been discouraged because the Fund managers don’t want to get pushed into projects that are politically popular. This is an area for other institutions like the Alaska Industrial Development and Export Authority, it is pointed out. AIDEA has its own finance guidelines, however, and those may not fit the needs of small micro-developments like the oyster farm visited by the governor.

Mark Begich, Walker’s Democrat opponent, who  opposed any Permanent Fund investment in Alaska projects, was at the same forum as Walker and said his proposal to dedicate half of the Fund’s annual earnings to education would do more to stimulate the state’s economy.

Craig Richards, a former attorney general and now Permanent Fund trustee, told a Commonwealth North task force last week that the Fund is actually looking at ways it can invest in the state. There’s nothing barring such investments, Richards said, although the Fund must follow the Prudent Investor rule and must also ensure that any in-state investment must secure the same return achieved if the money were to be invested out of state.

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