Juneau -- The Republican-led House Majority Caucus Saturday unveiled the Healthy Alaska Plan, a much-anticipated proposal to solve Alaska's fiscal crisis and put the State on solid financial ground.

"After months of discussion and debate, we are proud to present the Healthy Alaska Plan, a workable, sustainable plan for Alaska's financial future. We take this step, quite literally, because we must. Doing nothing is simply not an option.," said Speaker of the House Brian Porter (R-Anchorage). " As the elected leaders of the Alaska House, we invite the public, the Administration, the Minority, and the Senate to continue to work with us in this effort.

"Virtually every projection we have seen, no matter what its assumptions about revenues, inflation, or interest rates, shows that, if we simply do nothing, the State will drain its savings accounts over the next few years," Porter said. "The 'do nothing' projections all show us that this will leave the Permanent Fund Dividend Program high and dry and the State unable to pay its bills without tapping the principal of the Permanent Fund itself or drastically cutting essential government services."

The Healthy Alaska Plan consolidates the State's savings accounts into one sustainable, long-term source of revenue, the Alaska Income Account. The plan anticipates an average return over the next twenty years of 8.25% annually. 3% of these earnings are earmarked for inflation-proofing. The plan allocates 42% of the remaining revenues to endow the Permanent Fund Dividend Program, with the remainder to go into the State's General Fund.

The Healthy Alaska Plan will achieve several essential goals:

1. closes the fiscal gap;
2. preserves, protects, and increases the value of the Permanent Fund;
3. protects the dividend program for today and future generations by endowing the Dividend;
4. limits the growth of government but provides for a sustainable budget;
5. requires no new statewide taxes;
6. sustains a healthy statewide economy and a stable business environment;
7. demonstrates our continued commitment to the Permanent Fund.

"One of the highlights of the Healthy Alaska Plan is that it ensures that more than two dollars out of every five dollars the State takes-in will go directly to individual Alaskans in the form of Permanent Fund Dividends," said Representative Eldon Mulder (R-Anchorage), Co-Chair of the House Finance Committee. "Our projections show this to be a sustainable figure for years to come. That's important to those of us who want to leave our children and grandchildren a brighter, more secure future.

The Healthy Alaska Plan protects the corpus of the Permanent Fund without the need for new statewide taxes. It also effectively eliminates the possibility that the Internal Revenue Service could tax the Fund by declaring that a portion of the Fund's earnings are to be used to pay for essential services.

"In developing our plan, we chose to use very conservative figures - almost worst-case scenarios - to assure that the Healthy Alaska Plan is sustainable for future generations. When a Gas Pipeline is built or new industry is developed in Alaska, the economic outlook will be even brighter," Mulder said. "For now, our various savings accounts, properly utilized, are a resource that can bring us financial security well into the next century. This plan develops that resource to the long-term benefit of all Alaskans."

HB 231 : An Act relating to income of the Alaska permanent fund, to the Alaska Income Account, and to permanent fund dividends; and providing for an effective date.

HB 232 : An Act making a special appropriation from the budget reserve fund under art. IX, sec. 17(c), Constitution of the State of Alaska, to the Alaska Income Account; and providing for an effective date.

Document Explaining Plan Details

Supporting Charts: Click on thumbnails to view larger image.

Broadcasters note: Audio comments are available on the Majority Actuality line, 1-800-478-6540
= Brian Porter, 100 K = Eldon Mulder, 101 K
= Alan Austerman, 74 K = Bill Hudson, 163 K
= Gail Phillips, 65 K