The Permanent Fund Defenders mission is to educate people about the history and purpose of Alaska’s Permanent Fund and dividend (PFD); to protect and defend what we regard as its primary purpose; and to support legislators in making the right decisions related to the Permanent Fund and PFD that benefit all Alaskans.
Several of us worked with Gov. Jay Hammond to create the Fund and can attest to what we believe was his—and the people’s—intent. We also list here the many compelling and researched points in defense of maintaining inflation-proofing and the full dividend program.
Former Gov. Hammond warned, “Of one thing I’m sure…as go dividends, so goes the Permanent Fund. Cap, reduce, or eliminate the PFD and the Fund will follow suit.” This is the wisdom of a man who understood “sustainability” before many of us were born. Hammond understood the ease with which public money disappears, and how impossible inflated budgets are to reign in. He understood that oil wealth belongs to the people in common, for all generations, and a reasonable share should be distributed to residents. He believed that a dividend is not discretionary, subject to veto or re-appropriation. It is a right deserving of protection in our Alaska Constitution. Using dividends to fund government should be “off the table”.
The Permanent Fund belongs to the people by constitutional mandate (Article 8). The PFD is the citizens’ equal share of resource wealth, not a form of welfare. Alaskans have a right to consent to all changes to how Fund earnings are used and managed.
We know that inflation proofing the Permanent Fund is essential to maintaining its value for future generations. Plans to eliminate inflation proofing the Fund are just another way to take money out of Alaskan’s pockets and move it into government’s pocket since the value of the Fund will erode quickly.
From a public policy standpoint, taking any part of the dividend from Alaskans has disproportionately negative consequences when compared to other options. It affects people at every economic level, especially those who need it the most. UAA’s ISER concluded that reducing our dividend by $1000 pushes between 12,000-25,000 people below the poverty level. Spending the People’s PFD money any other way benefits too few at the expense of the many. http://www.iser.uaa.alaska.edu/Publications/2016_03_30-ShortrunEconomicImpactsOfAlaskaFiscalOptions.pdf
ISER also concluded that cutting the PFD should be the last option used to help balance the budget because it has the largest negative impact on income and jobs compared to other new revenue sources. Therefore, we support restoring the full PFD to Alaskans and ease this recession as soon as possible.
The best way to protect the Permanent Fund is to vest Alaskans with a purpose to defend it—a dividend. A dividend linked to the Fund’s performance keeps government accountable to the people. The dividend should not be capped, but rise and fall with the fortunes of the Fund. This makes Alaskans the watchdogs that guard the Fund from mismanagement and overspending by government.
Alaska’s Permanent Fund and PFD program has become a beacon of hope to nations around the world. We call upon you to protect this example, praised worldwide as a model for saving wealth, lifting people from poverty, and guarding the citizens’ wealth from government plundering.
Through economic swings and changes of administrations, the Permanent Fund system has worked well for almost 40 years. Alaskans are aware of the challenges we now face with declining oil production, low oil prices, downsizing government and diversifying our income sources. But we also know that these challenges are solvable without “restructuring” the PFD program and Fund. Please join us in pledging to stop the attacks on the PFD with a constitutional guarantee. Contact your legislators now to stop the raid on your Permanent Fund and PFD. Keep the people’s ownership stake in the fund strong and keep the Permanent Fund permanent.
Dr. Jack Hickel is a family physician who works with the Southcentral Foundation. Jon Faulkner is the owner of Land’s End Resort in Homer. Other members of Permanent Fund Defenders contributing to this commentary are Rick Halford of Eagle River, Clem Tillion of Halibut Cove, and Jim Crawford of Anchorage. Permanent Fund Defenders are on Facebook and at www.pfdak.com.