A Clever Permanent Fund Raid
Senator Michael Sanchez has a proposed solution to the state’s economic challenges. He has introduced it as Senate Bill 1, The Recovery Investment Bonding Act. In short, here is the good Senator’s strategy:
The purpose of the Recovery Investment Bonding Act is to provide a mechanism for the state to invest enough money from its permanent funds to avoid extreme economic hardship for its citizens, while providing a secure revenue source that will pay the debt and guarantee that the long-term health and stability of those funds are not threatened.
Another words, the Senator is proposing a creative approach to a permanent fund raid. Reminder all, the permanent fund (permanent being the operative word here) was a bipartisan creation that wisely recognized that the extractive natural resources from which we draw so much of our state’s revenue are finite. These are not rainy day funds. Otherwise, they’d be called rainy day funds. They are not to be tapped, creatively or otherwise, during low points in an economic cycle. They are there to protect against a day when the state can no longer count on taxes generated from extractive industries.
So, don’t be fooled by any creative named Senate bill. In fact, it is creative strategies like these that have bankrupt the social security system. We’d be wise to think of the permanent fund as our state’s social security system, and leave it well enough alone. Remember, the previous Governor already tapped it once, and that didn’t put us in a better place.