I'm tracking redistricting, but a really interesting presentation over in House Finance right now. Currently meeting with the Alaska Permanent Fund consultants, Callan and Associates, talking about risk modeling and ad hoc draws on the fund.


It's important because there's concern that following the firing of Executive Director Angela Rodell, the fund's Board of Trustees may opt for a riskier investment strategy and break with rules-based approach for payouts to government.
Earlier, Greg Allen of Callan and Associates said the fund's draw—5% POMV—is about right in terms of potential risk when you consider the growth and annual inflation.
Allen: "2021 was a big year for realizing gains"

The Alaska Permanent Fund's usual annual realized gains is about $3B, which keeps up with the POMV draw, but was $8B in 2021.
Another interesting point he made is the Fund's set up of having separate accounts—the corpus and ERA—is outdated and can potentially be in conflict with the POMV draw. It's not currently because the ERA is really big, but it creates a system where you can fall off a cliff.
Allen: "The best thing is to constitutionalize the spending limit (the POMV draw). ... Depending on the mood of the Legislature, you can spend whatever you want depending on what's in the ERA. It's a distraction."
Allen says overspending the ERA is "taking money from the future and giving it to the present."
Man, the Board of Trustees better not hear about this presentation.
Allen says predictability is important so fund managers know what they need to raise. If you come in and demand an extra $2 billion or $3 billion, you're gonna send them scrambling and rack up unnecessary losses.
Rep. Rasmussen asks what about the impact of a little bit of an overdraw as part of a "grand bargain" that would result in saving the rest of the fund?

I'm not really sure what bargain there'd in overspending the fund.
Rep. Rasmussen suggests that to protect the fund, they'd have to do an one-time overdraw... as a treat.
Allen says they've done a bunch of modeling of the fund's performance. Says the problem isn't a single bad year but several bad years. Says it'd take just a few bad years to take the ERA all the way to zero.

"Maybe that's what it'd take to change the constitution."
Allen calls the unrealized gains in the fund "dry powder" that could blow it up.
And here's how it'd really collapse quickly:
Those above scenarios are in the 5% likelihood of happening, Allen says. Most likely, he says, things will be OK as long as you stick to the rules.
Allen notes that the more you spend of the ERA, the less there is to lose in a really bad year. "It's like you locked that money in and avoided losing it. It's an ironic thing about pulling money off the table."

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More from @mattbuxton

Jan 25
Day three of the Alaska Redistricting Board trial is underway. Today, they're getting into the Valdez witnesses today. If they get through Valdez, they'll start with intervenor (Doyon, Limited group) witnesses.

#akleg #akredistrict

Here's Day 1 (East Anchorage): akmemo.substack.com/p/redistrictin…

Here's Day 2 (Mat-Su): akmemo.substack.com/p/redistrictin…
Right off the bat, they're starting off with a dispute about when plaintiffs will get to do cross examination of the board witnesses. It sounds like the potential of having them today is catching some plaintiffs by surprise.
Read 127 tweets
Jan 24
It's trial day for the Mat-Su Borough/MSB Manager Brown's challenge to the Alaska Redistricting Board. They've got two main points:

We don't like Valdez; they don't like us.
You crammed too many voters into Mat-Su districts.


#akleg #akredistrict
They'll also get an out-of-order witness from the Valdez case, Valdez Mayor Sharon Scheidt.

The Redistricting Board had objected to several Mat-Su witnesses (their testimony is pre-filed) and Judge Matthews has overruled them, but notes that he'll still weigh the concerns.
First up is Mat-Su Mayor Edna Devries. Questioning first comes from Brena (Valdez) who's asking her about the socio-economic integration between Valdez and Mat-Su.

She says Mat-Su and Valdez are pretty different.
Read 89 tweets
Jan 21
On the board testimony issues, Judge Matthews: "Both parties make arguments that are well-grounded."
He says Singer already had the chance to file testimony and supplemental affidavits for his witnesses. Singer doesn't get to call additional re-directs (additional questioning) but can file supplemental affidavits for consideration.

Plaintiffs would get opportunity for cross.
Wells apologizes for requiring Bahnke fly into Anchorage, says she will not be calling her for cross examination today
Read 33 tweets
Jan 21
The first day of the trial challenging the Alaska Redistricting Board's work is underway. Today, they'll be kicking it off with the East Anchorage plaintiffs, who are challenging the Senate pairings with the conservative Eagle River.

#akleg #akredistrict

It's going to be an unusual trial because the direct testimony has already been filed. The opening arguments, too. They'll be starting out with cross examination and then direct testimony.
First, they're taking up several objections raised by the Alaska Redistricting Board against lay testimony and expert testimony brought by East Anchorage.

Judge Matthews rejects both motions, adding that he'll take the hearsay testimony as it comes.
Read 87 tweets
Jan 20
The House Finance Committee is underway with an overview hearing on Gov. Dunleavy's budget proposal.


Watch: akleg.gov/includes/_play…
Presentation: akleg.gov/basis/get_docu…
Steininger explaining how the state's budget has been reduced by ~5% since Dunleavy took office with most of the cuts coming to the University of Alaska and a few other areas. Notes quite a bit of it, though, has been eaten up by more spending on public safety, corrections.
Rep. Foster asks why Steininger chose FY19 as the starting point, asking whether it's intended to make the budget look better.

Steininger says it's to "focus on the achievements of this administration."
Read 36 tweets
Jan 20
S. Finance is underway. They're taking a look at the revenue forecast with DoR's Chief Economist Dan Stickel. Stedman prefaces by saying investments have surpassed oil, but "that might be switching around."


Watch: w3.akleg.gov/includes/_play…
Docs: akleg.gov/basis/Meeting/…
Stedman says they all need to start settling into a base number for oil price. The state has started to update it more regularly, which Stedman suggests is not particularly helpful because it can make for big swings in the budget outlook.
How's the state's economy doing? "Still a ways to go," Stickel says.
Read 21 tweets

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