Alaska Sen. Bill Wielechowski needn’t worry about what happens if his lawsuit fails. He should instead worry about what happens if he wins.
There are 700 million reasons why.
The Anchorage Democrat filed a lawsuit earlier this month challenging Gov. Bill Walker’s authority to reduce Permanent Fund Dividends paid to Alaskans. Originally, Alaskans were to get $1.4 billion. Walker halved that figure following a legislative session that saw nearly six months of inaction from both chambers in reducing Alaska’s $4 billion deficit.
Wielechowski and two co-plaintiffs, former Alaska Sens. Clem Tillion and Rick Halford, are now crying foul and ignoring the cliff we’re heading for.
Alaska has burned through more than $13 billion in savings in the last few years, and it is now two years from spending those savings entirely. Here’s why you should care, and why Wielechowski should give up the lawsuit:
1. When Alaska’s Constitutional Budget Reserve hits $0 at the end of next fiscal year, the same fund that pays out dividends, the fund’s earnings reserve, will become our new savings account to pay for essential services.
2. When the Permanent Fund earnings reserve hits $0 a few years after that, the Permanent Fund itself becomes our piggy bank. Constitutionally protected or not, it will be targeted.
3. Each Alaskan receiving $1,000 instead of $2,000 this year will be affected far less than if another $700 million is cut from the budget. Imagine your car damaged by pot-holed roads. Imagine your children left ignorant by underfunded schools. Imagine yourself sick in a crowded hospital.
Some who oppose cutting the dividend have referred to Walker’s veto as a regressive tax that will impact poor and rural Alaskans the most. They’re right — but only to a point. This argument ignores the impact of cutting another $700 million to make up the difference, and those impacts will be hardest on poor and rural Alaskans.
Entire state departments could be closed down, their employees laid off, and much of that $700 million gap would still exist. In the process Alaskans could lose resources that allow our state to properly manage fish and game resources, oversee environmental regulations, fund education and pay for Alaska State Troopers and VPSO programs.
We can’t say for sure what will be lost, or how big an impact cuts will have and to whom, until they actually happen. Reducing Dividend checks wasn’t just the smart choice — it was Walker’s only choice to avoid catastrophe.
Walker shouldn’t have had to protect us from ourselves. That was the Legislature’s job, and it has failed. Even after Walker’s veto lawmakers chose not to override the decision, which was possible with a supermajority vote, because they too know the consequences of doing so.
The good news is that the PFD reduction is for one year only, and if the state properly manages the money it has left, perhaps full Dividends can be paid out in future years.
If we steal from tomorrow to pay for today, Alaskans will watch the Dividend disappear. Half of something is better than all of nothing.
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