Talking Points for SJR 21

Senate Joint Resolution 21 establishes a Public Facilities Capital Fund (PFCF) within the state constitution. It's interest income could be used for either bond debt-service or cash appropriations.

The PFCF would:

• Constitutionally create a revolving bond fund, the interest income from which would repay PFCF bonds for construction and major maintenance of publicly-owned infrastructure throughout the state.
• Have no fiscal impact until FY 2000.
• Be capitalized with an initial appropriation from the Constitutional Budget Reserve.
• Have the constitutional amendment approved in the 1998 general election, with the initial bonding approvals authorized at the same time, subject to SJR 21 passage.
• Have its administrative and investment activity managed as a separate account by the Alaska Permanent Fund Corporation, with no change to the earnings, distribution, operations or dividend check policies of the Alaska Permanent Fund.
• Use existing procedures of approval and prioritization of public projects through the legislative process.
• Require a statewide vote in each general election to approve debt obligation for eligible projects.
• Require local matching funds for municipalities and school districts.
• Reduce a considerable portion of the state's annual "fiscal gap" by moving most of the capital projects, debt-service, and lease-purchase budgets out of the General Fund into their own revolving account similar to the Alaska Student Loan Fund, AHFC, and AIDEA programs.

Issues for further development:

1. an inflation-proofing/growth-of-principal mechanism
2. cash to debt-service ratio
3. IRS arbitrage language questions
4. Voter approval: Statewide/Judicial District/Legislative District?

For further information, please call the office of Senator Tim Kelly at 465-3770.