American State Governments Look at Permanent Fund Option
Most states in the USA are trying to attract employers and capital; many are looking at ways to get rid of their state income tax or at least lower it. States are trying to find ways to preserve their economic future and standard of living. Consequences could include for the state further growth in government budget shortfalls. To counter this, several states have sovereign funds, sometimes called permanent funds that tax natural resource extraction. This is not a new concept; it has been around since the 1800s in the United States.
Take Alaska, a major segment of the economy is dependent on natural resources such as petroleum. Alaska voters enabled the creation of the Alaska permanent fund. The fund has been successful in generating investment income over the decades.
Permanent funds can also be used to safeguard state-owned natural resources.
Back in 1969, a major oil field was discovered in Alaska-owned Prudhoe Bay area. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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