What others say: What if PFDs aren’t ‘permanent’?

  • Sunday, June 26, 2016 4:13pm
  • Opinion

Sometime in the next 10 days, you should expect Gov. Bill Walker to veto all or part of the funding for your Alaska Permanent Fund Dividend.

We’re warning you ahead of time. We want you to get used to the idea, and we want you to understand why it’s the right thing to do.

Thanks to the inaction of the Alaska Legislature, Walker’s veto pen is the last chance to put Alaska on a sustainable fiscal path, and ultimately save the Dividend.

The fourth special session of the 29th Alaska Legislature concluded Sunday. It was mostly a waste of time and money. While some important bills were passed, none included the actions we believe are necessary to fix Alaska’s multibillion-dollar budget deficit.

Above all else, the Legislature failed to pass Senate Bill 128, which uses 5.25 percent of the Alaska Permanent Fund to fund state services and pay dividends on a sustainable, affordable basis.

On average, the Permanent Fund is expected to earn 7 percent per year from its investments. Subtract the rate of inflation, and 5.25 percent is a reasonable amount to spend. It’s enough to cut the deficit by more than half, but it’s not so much that it encourages overspending.

Despite the sensibility of this idea, lawmakers in the House rejected it because of the idea’s effects on the Dividend. Under this idea, the Dividend would be $1,000 instead of the $2,000 it is expected to be.

But cutting the Dividend right now is necessary to preserve it for the future. Without a cut to the dividend, we risk having no Dividend at all in four years. The state is spending its savings so quickly that unless we cut back, we will have no money to pay the Dividend beyond the end of this decade.

A project begun in 1982 will die from starvation before its 40th birthday.

This is not a choice about cutting the Dividend. This is about how much to cut the Dividend. You can either lose half now or lose the entire thing in a few years.

Many lawmakers said their constituents told them to leave the Dividend alone. If that is true, these lawmakers failed to educate their constituents about what truly is at stake, or how dividends might go away entirely if action isn’t taken.

Now it’s up to Gov. Walker to save us.

This year’s budget contains $1.4 billion for dividends, enough to pay every man, woman and child in Alaska about $2,000.

If Walker vetoes that money, there would be no dividends. When it convenes in special session on July 11, the Legislature would be forced to act.

In the special session that just ended, the House failed to pass SB 128 because it feared cutting the Dividend. If Walker vetoes the Dividend, lawmakers will have an opportunity to save it by passing SB 128.

There’s no question that if Walker vetoes the Dividend, it will infuriate Alaskans. Good. Maybe then they’ll pay attention to the real issue here.

If you’re reading this newspaper, you know the real issues. You’re up-to-date on the Legislature and what it’s been doing (or not doing). The problem lies with the people who don’t read the state’s newspapers. They live with blinders, ignorant of the problems on the ground. If you don’t believe us just look at comments below news articles and on social media. It becomes clear many Alaskans don’t understand how the Permanent Fund will be impacted once all the state’s savings are gone.

Walker might be the only Alaska politician brave enough to tear off their blinders in a spectacular act of political suicide. Walker has said repeatedly he’s less concerned about winning reelection than doing what’s necessary. So far, he’s kept his word. His plan for new taxes left no one unscathed.

According to the Alaska Attorney General’s Office, it’s within the governor’s right to veto a portion, or all, of the dividends to Alaskans. As we said in a previous editorial, the Permanent Fund is the third rail of Alaska politics: Touch it and die. But if something isn’t done to shore up the budget deficit and increase revenue now, we’re just trading electrocution for starvation.

Walker and the leadership of the Senate know this. So do some members of the House. The rest are either trying to protect their chances at reelection or are living in fantasy world where oil prices will soar and never again sink.

If the governor were to veto money budgeted for PFDs, it would make the Legislature’s vote on SB 128 much easier. Many Alaskans would even view them as heroes for protecting the Dividend.

In reality, the real hero tends to be the person who sacrifices the most for the good of all.

Alaska needs that hero now.

— Juneau Empire,

June 23

More in Opinion

U.S. Senate candidate Kelly Tshibaka and former President Donald Trump stand on stage during a July 2022 rally in Anchorage. (Mark Sabbatini / Juneau Empire File)
Opinion: Tshibaka’s insincere defense of democracy

There are a lot of possible explanations why fewer votes were cast last November

Capitol
Opinion: Humanism and the billionaire class

Compromise is the right thing to do and they should do it.

tt
Opinion: The challenged truths of 3 elected representatives

“Politicians lying is nothing new.”

This photo shows the Mendenhall Glacier Visitor Center. (Ben Hohenstatt / Juneau Empire File)
Opinion: The wrong way to define demand

And as glaciers go, the Mendenhall is only a minor attraction.

Zachary Hamilton (Courtesy photo)
Borough mayoral candidate: ‘The best is yet to come’

Zachary Hamilton is running for Kenai Peninsula Borough mayor in the special election

Love, INC in Soldotna, Alaska, provides homelessness prevention and housing services to people on the Kenai Peninsula. (Photo by Brian Mazurek/Peninsula Clarion)
Opinion: COVID relief funds help homeless children in Alaska

We need to sustain this kind of investment.

Gov. Mike Dunleavy holds a press conference at the Capitol on Tuesday, April 9, 2019. (Juneau Empire file photo)
Opinion: Alaska must act now to capitalize on carbon markets

Alaska has vast forests and coastlines that can provide natural carbon management

1
Opinion: MLK Day clinics offered in the ‘spirit of service and advocacy for equality and social justice’

Attorneys across the state will be spending their holiday as “A Day On, Not a Day Off”

The M/V Tustumena comes into Homer after spending the day in Seldovia in 2010. (Homer News File)
Opinion: New federal funding could aid Alaska Marine Highway System

The evidence is clear that the AMHS is in grave danger of failing and moving into Alaska’s history books

(Mark Sabbatini / Juneau Empire File)
Opinion: I’ve seen the union difference

As a community we can show solidarity…

(Peter Segall / Juneau Empire File)
Sullivan’s irrelevance in defense of democracy

Two years ago this week, supporters of then-President Donald Trump stormed the U.S. Capitol…

People vote in polling booths at the Soldotna Regional Sports Complex on Tuesday, Nov. 8, 2022, in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Voices of the Peninsula: What’s on your 2023 schedule so far?

There is a Kenai Peninsula Borough Special Mayoral Election coming up in February