Alaska is at a crossroads. Our government is redefining the purpose of the Permanent Fund and the Permanent Fund Dividend. The Legislature wants us to believe that the PFD belongs to the government. This is wrong.
The government is spending the PFD instead of providing you with your legal share of our public oil wealth.
Misunderstanding about the Permanent Fund system is widespread. The truth is, Alaskans set up the fund as a trust belonging to all residents and funded from the wealth of our commonly-owned oil resources.
We amended the Alaska Constitution so 75 percent of our oil wealth would go for government spending while saving 25 percent in the fund.
The fund saves our one-time, non-renewable oil and mineral wealth for current and future generations. As Elmer Rasmuson, a former chairman of the Permanent Fund Corporation said, “The fund is a constitutional right, not a gift bestowed by a generous government.”
[Permanent Fund Dividend still a major question mark this session]
My father, former Gov. Walter Hickel, was not an advocate for the PFD at first. But later he saw the wisdom of the PFD, noting, “You, as a resident of Alaska, share in the ownership of 103 million acres of land, all navigable waters and the natural resources our land and water contain. It is your oil, your natural gas, your minerals, your timber, your fish. … A portion of your oil royalties are also set aside in the Permanent Fund from which you, as an owner, earn dividends.”
Because our public oil belongs to the people, so does the fund and the PFD. The wealth from both is derived from our oil, not taxes.
The government would have you believe that the PFD is a welfare program. It isn’t. It’s our share of our savings.
The PFD protects the fund wealth from raiding by the government. Jay Hammond and other leaders established the PFD program knowing that sharing some of the wealth in the fund via a dividend was the best way to keep the fund protected from looting.
[There could be a new, quick way to send PFD money to government coffers]
Dave Rose, the initial director of the Alaska Permanent Fund Corporation, said the greatest threats to the fund are the “intense temptations of powerful people (and) … the strongest defense of all is the Alaska Permanent Fund Dividend.”
Three years ago, the looting started when politicians began cutting the PFD, ignoring the PFD law enacted in 1981. Now, the whole Permanent Fund system is under attack by raiding politicians hooked on spending.
Legislators in both parties spent savings ignoring other options for a sustainable budget. While spending 75 percent of oil royalties, they spent $15 billion from budget reserves since 2013. They stopped inflation proofing the fund, decreasing its value by $1 billion. In 2018, after cutting PFDs for the last three years, legislators passed a law, Senate Bill 26, to tap fund earnings for government spending and made PFD payments optional.
Apparently, our politicians think the PFD is a slush fund to be spent by the government instead of by the people. Cutting the PFD acts as a regressive tax, hurting the state’s most disadvantaged people. Research shows that cutting the PFD is the worst kind of tax and is the most “adverse of all revenue measures.”
[Opinion: The future of the PFD]
The PFD has been a huge benefit to our state for over 35 years. It encourages private sector development, is the best way to fight a recession and lifts 25,000 people out of poverty, especially those in the rural areas where cash jobs are limited.
I see an urgent need to secure the PFD in the Alaska Constitution to guard it from the grasping hands of politicians. I oppose balancing the budget with Alaskans’ PFDs.
It’s time to have an open discussion about appropriate budget cuts and revenue raising options. If we don’t, we will lose the PFD and ruin the Permanent Fund.
Alaskans need to ask: Will we destroy the PFD and the fund, which are admired globally as a great example of resource wealth management and equitable benefit for residents, or will we choose to defend and strengthen our fund, and continue to protect our PFD to benefit current and all future generations?
Will politicians make the right choice? It’s up to you, Alaska voters, to make sure they do.
• Jack Hickel is a family physician with the Southcentral Foundation in Anchorage and vice president of Permanent Fund Defenders (pfdak.com), a statewide educational nonprofit group based in Eagle River. My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire.
