Point of View: Fix the Permanent Fund dividend now

  • Wednesday, July 21, 2021 10:00pm
  • Opinion
Point of View

Point of View

The other day I was discussing politics with an old friend who told me I perceived the technicolor world in black-and-white terms. This was a first in my 96 years and I asked why this was so.

The answer provided jolted me and prompted this column. My friend informed me I base my opinions on what is right or wrong, which I reckon is true.

We went on to discuss how so many contemporary political decisions are made or not made based on political expediency, unrelated to what is right or wrong.

I very much believe in doing the right thing by Alaska’s citizens, especially when it comes to the Alaska Permanent Fund and the permanent fund dividend. The failure by our elected officials to permanently provide a constitutionally protected dividend according to a fair share formula is wrong.

The right thing for all of us is to embed an equitable permanent fund dividend in the Alaska Constitution. The sooner the better.

The permanent fund is the best thing our state has done with our communal oil wealth since statehood. Working together, we managed to amend the Alaska Constitution to save a quarter of the mineral wealth that belongs to all of us by socking away our wealth in a trust fund. This trust fund — the Alaska Permanent Fund — generates billions of dollars in earnings that belong to all of us.

Paying each and every eligible Alaskan a slice of the earnings their trust fund generates makes sense. Doing so will also protect the permanent fund for future generations. If every citizen receives a share of the earnings, the call to spend down the principal will die.

Individual Alaskans are every bit as competent to spend a portion of the earnings from the permanent fund as the politicians. Individual spending of a portion of the permanent fund earnings distributed in the form of a dividend benefits residents, lifts many families from poverty and has diversified our economy.

By now it is obvious to everyone that Alaska has a spending problem. Our politicians love to spend and they are loath to consider cuts or contemplate taxes to pay for a bureaucracy that is enormous on a per capita basis. But here is the dirty secret about taxes in Alaska: cutting the dividend is the worst kind of regressive tax to impose on our citizens in order to pay for government services.

Our inability to consider taxes or cut and consolidate government is pathetic. We are paying oil firms to take our collective mineral wealth via arcane tax credits promoted by lobbyists. Special interests work diligently to advance spending for programs added to state government without regard to sustainability. In short, we’ve acted like oil wealth was without limit and would last forever.

But nothing lasts forever in politics. The days of big spending budgets based on bonanza oil revenues are over.

The politicians have spent the ample reserves in the Budget Reserve Accounts and cracked into the earnings generated by permanent fund. At the rate they are going, all of the earnings from our permanent fund will be devoured by government unless we amend the Alaska Constitution.

Alaska’s people deserve a fair share of the earnings from their permanent fund. The only way to guarantee the citizens obtain a fair share of the earnings is to put a dividend formula in the Alaska Constitution. Without constitutional protection, the special interests and lobbyists will spend every available dime of the earnings and short the people. The funds earned from the investment of our permanent fund belong to the people, not the politicians and bureaucrats. An equitable dividend that is constitutionally protected is the only way to equally benefit all Alaskans and the permanent fund in the long run.

I am inclined to view politics in stark terms. When I came back from the South Pacific after the Second World War, my father told me I shouldn’t expect anything as a veteran other than the thanks from my fellow citizens for doing what was necessary. My father’s advice was based on experience. He served with Gen. John Pershing during the border disputes along the Mexican border and later in France during World War I. The lesson I was taught and learned is about managing expectations and doing what is right.

The Alaska Permanent Fund dividend is not welfare. The dividend is not a gratuitous blessing from the politicians we elect. The dividend is not some sort of tax redistribution scheme Alaskans have come to unreasonably expect.

We owe no thanks to the politicians for the annual dividend. The dividend belongs to the people and is derived from the earnings of their fund. The dividend reflects the people’s ownership interest in their oil. Every citizen should demand a constitutionally protected fair share of their saved wealth.

Alaska is a land grant state. The wealth saved in the permanent fund was generated from oil lifted from our public lands. The wealth in our permanent fund belongs to every Alaskan. The right thing to do is ensure that a portion of that wealth is constitutionally distributed according to a fair and equitable formula.

Clem Tillion lives in Halibut Cove. After serving in the Seabees during World War II, he moved to Alaska where he served in the Alaska Legislature, including election by his peers as the Senate President. Tillion is the Chairman of the Permanent Fund Defenders (www.pfdak.com).

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