A video produced by Alaska Gov. Mike Dunleavy to explain a state-paid economic stimulus package contains exaggerated information about the performance of the Alaska Permanent Fund.
Jeff Turner, the governor’s deputy communications director, disputes that the information is incorrect or misleading.
The governor’s plan, proposed earlier this month, would cost about $6.2 billion and be paid for with the $72.8 billion Permanent Fund. Alaskans would receive about $5,000 in two separate payments during 2021, and the state would borrow several hundred million dollars to fund construction projects, a move intended to create jobs.
“This pandemic has just been awful for the state of Alaska,” Dunleavy said in a Sunday interview with Fox News.
“This interjection of this kind of money, we believe, will get a number of businesses get up off their knees,” he said.
The plan must be approved by the Alaska Legislature, and some legislators are skeptical, citing long-term consequences. The Permanent Fund’s earnings now account for more than 70% of state revenue, and spending from the fund reduces the amount of money available for dividends and services in the future.
In a 40-second video released Dec. 23 on social media, the governor appears to downplay those concerns.
“The goal of the video was to illustrate the governor’s proposed FY22 budget that proposes to complete the 2020 PFD payment, issue a full 2021 PFD payment with the robust earnings the fund has earned this year,” Turner said.
The video was produced in-house by the governor’s communications office, he said.
When asked whether some of the figures quoted in the video are misleading, the governor’s office simply re-sent information about the numbers used to create the video. After this article’s publication online, Turner said there was nothing misleading, and the governor’s office stands by it.
Here’s a breakdown of some of the video’s claims:
Some say we can’t afford the PFD payments I’ve proposed in my budget. I say, we can’t afford not to make these payments to Alaskans given the state of our economy. https://t.co/dtU8iXX4aK#akgov #PFD #akleg
— Governor Mike Dunleavy (@GovDunleavy) December 23, 2020
* Claim: “The question is, can we afford this? The answer is yes.”
* Analysis: The Permanent Fund does contain enough money to pay for the governor’s plan and for state services. The proposed amount of spending does increase the chance that the fund will be unable to pay for state services in the future.
* Claim: “The Fund has grown by $40 billion in just 10 years.”
* Analysis: According to the governor’s office, this compares the value of the fund on June 30, 2010 ($33.3 billion) to its value a few days before Christmas ($72.2 billion), a difference of $39 billion over 10 1/2 years, not 10 years.
Those extra six months matter: The 2010 figure was taken during the middle of the recovery from the Great Recession, when the fund’s value was rising rapidly.
Using a true 10-year measurement decreases the fund’s gain. On Dec. 31, 2010, the fund had a value of $38.8 billion. As of Dec. 28, 2020, its unaudited value was $72.8 billion, an increase in value of $34 billion.
“There is nothing misleading about the timeframe we used, and we stand by it,” Turner said by text message.
The increase came despite major spending from the fund: More than $12 billion has been spent from the fund on dividends and services since 2010.
It’s also worth noting that the 10-year period from 2010 to 2020 included the longest bull market in American history. Investments rose steadily in value from 2009 to March this year. The Permanent Fund Corporation’s advisers have repeatedly told trustees that they do not expect the trend will continue.
* Claim: “This is an increase of $11 billion during the pandemic period alone.”
* Analysis: The video defines “pandemic period” as March 31, 2020 through November 30, 2020.
“The March 31 total was $61.3 billion and the November 31 total was $73.0 billion – a difference of $11.7 billion,” the governor’s office said.
March 31 is after Dunleavy’s declaration of pandemic emergency, after the state had responded to a flight of Americans from Wuhan, China, and after markets had reacted to the pandemic.
Using it as a starting point for measurement creates an effect similar to measuring the height of Flattop Mountain by starting at the bottom of Cook Inlet.
From Jan. 1 to Dec. 23, the fund increased in value by $4.2 billion, less than the governor proposes to spend. In addition, the fund is still required to transfer about $1.5 billion to the state treasury.