Kessler is still crafting his Future Fund proposal for the 2014 legislative session that opens in January. He said he's leaning toward presenting it as a proposed constitutional amendment. His call for a trust fund would go on next year's ballot for voters to decide if it clears the Legislature.
His proposed endowment would be built with a portion of oil and natural gas severance tax collections. Severance taxes, including those on coal and other natural resources, are a big part of the state budget. They contributed an estimated $462 million, or 11 percent, to total general tax revenues in the fiscal year that ended in June.
The trust could not be tapped for a specified number of years and would be limited to supporting a few needs including education, economic development or tax relief once it became accessible.
Kessler said constitutional protections would lock down the fund from lawmakers and interest groups tempted to pry it open prematurely to spend money elsewhere. "I don't want it to be willy nilly, people using it for pet projects," he said.He notes that places such as Alaska are already benefiting handsomely from their funds. Supported by about 30 percent of all mineral royalties the state receives, the Alaska Permanent Fund is invested in a broad portfolio and recently had an unaudited market value of $46.6 billion. Dividends, coming from investment profits, are paid each year to most Alaskans. Last year, the payment amounted to $878 per person. Principal can't be spent. Then there is North Dakota. Kessler recently led a group of West Virginia lawmakers there to study state's legacy fund. In 2010, North Dakota voters approved their Legacy Fund, which has been rising faster than predicted with booming oil production. Oil and gas revenue that began gushing in only since September 2011 had topped $1.3 billion as of last month. The fund gets 30 percent of the state's oil and gas tax collections. None of the money can be spent until 2017, and only then if the Legislature decides by a two-thirds vote to dip into it.