What others say: Enshrining PFD in constitution is unwise

  • By Fairbanks Daily News-Miner Editorial
  • Thursday, March 29, 2018 10:46am
  • Opinion

The Alaska Permanent Fund Dividend is not an entitlement. Nor should it become one.

Yet that is what several unwise but populist proposals in the Alaska Legislature seek to make it by asking voters to add the dividend program to the Alaska Constitution.

A few such proposals exist in each chamber of the current Legislature, but only one has made any progress. Senate Joint Resolution 1, introduced in January 2017 by Sen. Bill Wielechowski, D-Anchorage, cleared one committee last year but, fortunately, was blocked by the Senate Judiciary Committee on March 7.

And there it should be allowed to die. Alaska would be well served if such a fate could befall all such efforts to guarantee the annual dividend.


Because guaranteeing the dividend program may at some point actually harm the state.

There’s an argument to be made that distributing a dividend in dire financial times when the state has more-pressing needs would run afoul of the spirit — if not legally so — of the constitution’s requirement that the state’s natural resources, from where dividend dollars are derived, be used for the greatest benefit possible of Alaska and Alaskans.

The Alaska Constitution, in Article VIII, Sections 2, states the following:

“The Legislature shall provide for the utilization, development and conservation of all natural resources belonging to the state, including land and waters, for the maximum benefit of its people.”

The dollars that go into the dividend program come indirectly from the development of those natural resources. Revenue from resource development goes into the Alaska Permanent Fund principal, which is invested in various ways.

The earnings from those investments are allocated each year by a statutory formula and are intended for the dividend program, though the Legislature has the authority to spend the money in any manner it wishes. It could cancel the dividend program entirely, without a vote of the people, if it wanted to.

Senate Joint Resolution 1 would put into the Constitution a formula guaranteeing an annual dividend; it would not guarantee a dollar amount. It would also allow some of the earnings to be available for other government functions.

The annual dividend, regardless of its amount, is surely seen by each individual recipient as being the best use — the “maximum benefit,” in the constitution’s own words — of the permanent fund’s investment earnings. And businesses may see it that way also, because dividends are used to pay bills and to buy goods and services. Businesses often have special deals to encourage those dividend dollars to be put toward the purchase of big-ticket items such as snowmachines or ATVs.

But look at it another way, especially through the final seven words of Article VIII, Section 2. It reads, “… for the maximum benefit of its people.”

That could very well mean Alaska’s people as a whole.

It may someday be more important for the maximum benefit of the people as a whole to have earnings from the permanent fund spent almost entirely or in full on something other than a dividend. Maybe on schools. Maybe on the state’s transportation system. Money has been in increasingly short supply in recent years, as Alaskans should well know by now.

That means that the Legislature should retain authority over the issuance — and, potentially, nonissuance — of the dividend.

There’s another argument against putting the dividend in the Constitution.

Making the dividend a guaranteed annual affair further isolates Alaskans from the operations of government. Alaskans pay no sales or income tax and get paid, through the dividend, for simply being here. As enviable as that situation might be, it also means Alaskans might not be as invested in, and as interested in, their state government as they should be.

Alaskans should be left to continue thinking the dividend isn’t a sure thing. They’ll pay closer attention to their government and their elected officials as a result.

Enshrining the dividend program in the constitution surely seems an attractive, vote-getting idea for many people, but it is an unwise action when Alaska faces an uncertain fiscal future.

Discussion about putting the dividend in the Alaska Constitution does, however, provide an opportunity to remind Alaskans that it was the Legislature that created the dividend program. It was not, as some think, created when voters established the permanent fund itself through a constitutional amendment in 1976. The Legislature established the present dividend program — an earlier one was ruled unconstitutional — in statute in 1982.

The Legislature is the branch of government with the greatest control of revenue and expenses, and it should retain such control when it comes to the Alaska Permanent Fund Dividend rather than succumb to the clearly populist idea of asking voters to make it a part of the Alaska Constitution.

Putting the dividend in the constitution would erode the Legislature’s necessary flexibility as it works with the governor, whoever that may be in the years ahead, to put Alaska back on a stable financial footing.

— Fairbanks Daily News-Miner, March 25

More in Opinion

The Alaska Capitol on Monday, Jan. 16, 2023, in Juneau, Alaska. (AP Photo/Becky Bohrer)
Alaska Voices: Legislature deserves credit

A special session shouldn’t have been necessary, but at least it was only one day instead of 30 days.

Alaska State Troopers logo.
Alaska Voices: Please be safe, courteous, and legal as you fish in Alaska this summer

As you head out to hit the water this year, here are a few tips to help you have a safe and citation free season

An observer makes an entry in the Fish Map App on Prince of Wales Island. (Photo by Lee House/courtesy Salmon State)
Alaska Voices: Document Alaska rivers with new fish map app

The app provides a way for everyday Alaskans to document rivers home to wild salmon, whitefish, eulachon and other ocean-going fish — and earn money doing it

(Peter Segall / Juneau Empire File)
Opinion: Sustainability report is a greenwashing effort

Report leaves out “the not-so-pretty.”

Pictured is an adult Chinook salmon swimming in Ship Creek, Anchorage. (Photo: U.S. Fish and Wildlife Service)
Voices of the Peninsula: Proactive measures key to king salmon recovery

I have been sport fishing king salmon along the eastern shores of Cook Inlet and in the Kenai River since 1977

U.S. Sen. Lisa Murkowski (Mark Sabbatini / Juneau Empire)
Honoring the fallen on Memorial Day

As we honor the men and women who fell in service to our nation, we must keep their memories alive through their stories

Shana Loshbaugh (Courtesy photo)
History conference seeking input from peninsula people

The Alaska Historical Society will hold its annual conference on the central peninsula this fall

Coach Dan Gensel (left) prepares to get his ear pierced to celebrate Soldotna High School’s first team-sport state championship on Friday, Febr. 12, 1993 in Soldotna, Alaska. Gensel, who led the Soldotna High School girls basketball team to victory, had promised his team earlier in the season that he would get his ear pierced if they won the state title. (Rusty Swan/Peninsula Clarion)
Remembering my friend, Dan Gensel

It’s a friendship that’s both fixed in time and eternal

(Clarise Larson / Juneau Empire File)
Opinion: The false gods in America’s gun culture

HB 61 is a solution in search of a problem.

KPBSD Superintendent Clayton Holland
Reflecting on a year of growth and resilience

A message from the superintendent

Jim Cockrell, commissioner of the Department of Public Safety. (Courtesy photo/Office of Gov. Mike Dunleavy)
Honoring the 69 peace officers who have died serving Alaskans

Alaska Peace Officer Memorial Day honors the brave men and women who have given their lives in the line of duty

Rep. Maxine Dibert (Image via Alaska State Legislature)
Opinion: The economic case for a significant investment in education

As our oil production and related revenue have declined, our investments in education have remained flat