The Institute of Social & Economic Research

The Alaska Citizen's Guide to the Budget

Financial Assistance
provided by:

Fiscal Policy Council of Alaska

Cash on the Street
Labor Cost
Grants to Local Govt
Payments to Individuals
Purchases from Business
Inflation Proofing, etc.
Intragovernmental Charges
Appropriations to COTS
Economic Impact of COTS



2. Cash on the Street

2.5 Inflation Proofing, Debt Service, Special—$.548 billion in 1999

$421 million was set aside in the budget to inflation proof the Permanent Fund. This is the deposit made at the end of the fiscal year to keep the purchasing power of the fund from eroding due to inflation. This deposit becomes part of the principal of the fund and cannot be spent. It is invested to generate income for future years.

Since the actual rate of inflation is not known until the 1999 fiscal year ends, the amount budgeted at the start of the year is just an estimate. Because the fund is so large, an error in forecasting the rate of inflation by 1% would cause the actual amount appropriated to differ from the initial budgeted amount by about $180 million.

$77 million was allocated for debt service payments, primarily for school construction, lease payments, and international airport debt. Most bonds are held by non-residents, so most of this money flows out of the state. School debt repayment was $60 million.

$23 million was allocated for the capitalization of loan funds for clean water supplies. This money was not spent, but rather set aside for loans.

$27 million was allocated for a variety of "Special" appropriations, most of which were transfers among funds and capitalization of loan funds. A large portion of this money was not spent, but rather set aside for special purposes.

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Page Updated April 16, 2003

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