Alaska's Permanent Fund Vote Shaped State's Financial Future

Lawmakers took a risk on the Permanent Fund and rejected fear of the markets at a pivotal moment in 1976.

Apr. 2, 2026 at 11:28pm

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A minimalist illustration featuring overlapping geometric shapes in shades of blue, green, and yellow, conceptually representing the growth and impact of the Alaska Permanent Fund over time.The Alaska Permanent Fund has grown to over $85 billion, providing a stable source of revenue for the state for decades.Anchorage Today

In 1976, the Alaska State House of Representatives approved the Permanent Fund amendment to the state constitution on a 36-1 vote. This was a pivotal moment in Alaska's history, as the Permanent Fund has grown to over $85 billion today. The debate leading up to the vote highlighted the concerns some legislators had about investing in the stock market, but ultimately the Democrats prevailed in arguing that the scope of investments could be determined by future legislators.

Why it matters

The Permanent Fund has become a crucial part of Alaska's financial landscape, providing a stable source of revenue and investment returns that have benefited the state for decades. The 1976 vote to establish the fund, despite concerns about the volatility of the stock market at the time, was a bold and forward-thinking decision that has paid dividends for the state and its residents.

The details

In March 1976, the Alaska State House of Representatives voted 36-1 to approve the Permanent Fund amendment to the state constitution. The lone dissenting vote came from Dillingham Democratic Rep. Nels Anderson, who worried the Trans-Alaska Pipeline would not be finished by 1977 as expected and that the state could not afford to put large amounts of revenue off limits. However, Anchorage Democratic Rep. Clark Gruening argued that the perfect time to decide to save public money was before it arrived, as there would always be a temptation to spend it. The biggest debate that day was over a plan by House Republicans to ban the fund from investing in the stock market, with Rep. Rick Urion arguing that the state had lost millions on previous stock investments. The Democrats prevailed, arguing that the scope of investments could be determined by future legislators.

  • On March 25, 1976, the Alaska State House of Representatives approved the Permanent Fund amendment.
  • In 1969, the state received $900 million from the sale of oil leases at Prudhoe Bay, which sparked the debate over creating the Permanent Fund.

The players

Nels Anderson

Dillingham Democratic Rep. Nels Anderson, 36, was the lone dissenting vote on the Permanent Fund amendment, expressing concerns about the state's finances and the timing of the pipeline.

Clark Gruening

Anchorage Democratic Rep. Clark Gruening, three days shy of his 33rd birthday, argued that the perfect time to decide to save public money was before it arrived, as there would always be a temptation to spend it.

Rick Urion

Anchorage Republican Rep. Rick Urion, 37, proposed language to limit Permanent Fund investments to those 'which have a guaranteed rate of return', citing the state's previous losses on stock market investments.

Hugh Malone

Kenai Democratic Rep. Hugh Malone, 32, a land surveyor, argued that it made no sense to limit state investments in the constitutional language, as that would not serve to diversify the state's economic base.

Terry Gardiner

Terry Gardiner, who was 25 at the time, is still hale and hearty and was one of the many 'fathers of the Permanent Fund' who participated in the historic debate.

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What they’re saying

“The Permanent Fund was debated, of course, at the time the state received the bonus lease monies from the sale of oil at Prudhoe Bay. At that time, the needs of the state were viewed as overwhelming and I think over the years as that money has been used to run the government, I think there is some regret that it wasn't adopted at that time.”

— Clark Gruening, Anchorage Democratic Rep.

“We must maintain the integrity of the fund by prohibiting constitutionally any investment in a speculative market such as the stock market, Mr. Speaker.”

— Rick Urion, Anchorage Republican Rep.

“I don't think that would serve to diversify the state's economic base. Or if we do, I'm very much afraid then we're saying that the only investments that this fund might ever make would be government securities. And I don't think that would serve to diversify the state's economic base.”

— Hugh Malone, Kenai Democratic Rep.

What’s next

The Permanent Fund has continued to grow and play a crucial role in Alaska's economy over the past 50 years. As the state looks to the future, policymakers will need to carefully consider how to best manage and invest the fund to ensure it continues to benefit Alaskans for generations to come.

The takeaway

The 1976 vote to establish the Alaska Permanent Fund was a pivotal moment that shaped the state's financial future. Despite concerns about the volatility of the stock market at the time, lawmakers took a risk and approved the fund, which has since grown to over $85 billion and provided a stable source of revenue for the state. This decision highlights the importance of long-term thinking and the willingness to make bold, forward-looking choices, even in the face of uncertainty.