Rep. Ben Carpenter
Alaska House of Representatives, District 8

Is Economic Growth A Legislative Priority?

After several recent lengthy updates, I promise to keep this short and to the point!

Earlier this week I wrote about the risk permanent fund earnings pose to our oil & gas industry. My premise was that increased permanent fund investment earnings will make it easier for legislators to disregard the value of oil & gas development. I highlighted the recent decision in Summer Sagoonick v. State of Alaska where the Alaska Supreme Court in a 3-2 decision dismissed a lawsuit attempting to create a constitutional right to climate security – a precursor to court mandates that require Alaska energy policies to address climate change. While the dismissal was good news for our state economy, only a single justice prevented an opposite outcome.

The green new deal isn’t the only threat to oil and gas jobs in Alaska. Permanent fund earnings that replace oil and gas revenue will be the one-two punch that kills our oil industry.

My vision was that sometime in the near “future where oil & gas revenue isn’t necessary to pay for state budgets because permanent fund earnings have supplanted oil & gas revenue, our oil & gas industry will be vulnerable to hostile legislative action.”

The future is now.

Thursday, the State Affairs Committee heard HB 251, proposed legislation that would change the way Permanent Fund Corporation board members are selected. Included in the proposed structural changes is a requirement that one member of the board be required to be someone with “wide experience in socially responsible investing,” also known as Environmental Social Governance.

You can watch the sponsor’s argument here at the 12:18 mark.

The bill sponsor argued that “decades of Alaska experience” set a precedent for legislative involvement in investment decisions impacting social issues. The sponsor pointed to legislative action in past decades to preclude state investment managers from investing in South Africa during Apartheid, or in Sudan or Iran. The moral authority to promote social justice was further supported by arguing that other countries’ sovereign wealth funds concern themselves with socially responsible investing.

My favorite line was that socially responsible investing is just “good capitalism.”

This proposed legislation isn’t a direct attack on our oil & gas jobs, but it’s one step closer. And that’s how social justice warriors think. Incremental change, that sounds reasonable.

I think Alaskans need to consider whether spending all permanent fund earnings on state government in lieu of budget cuts or broad-based taxes is in the long-term best economic interest of the state. After all, legislators have one constitutional requirement. Spend money. If our budget is fully funded with investment earnings and federal dollars, economic growth is irrelevant to the budget process.

Where does that leave us?

2 Responses

  1. I very much appreciate you keeping us up to date on what kinds of things are happening in Juneau, things that were never on my horizon, until I started reading your reports.

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