I moved to Alaska in 1979. As a place, Alaska was awesome. Big mountains, vast distances, awesome wildlife, deep fjords, huge glaciers and enormous rivers defined the country.
The human inhabitants of Alaska were diverse, relatively few in number, mostly hard working and interesting. The place was loaded with characters.
In 1979, the trans-Alaska Pipeline was completed. Oil was beginning to flow but the enormous wealth derived from our oil hadn’t permeated the political process. Alaska was rich in potential, short on funds and eagerly anticipating a revenue bonanza.
Looking back, it’s not difficult to catalog the mistakes made with our oil wealth. We spent way too much of our oil wealth and and saved too little of the revenue for the future.
To be sure and to our collective credit, we did save some of the oil revenue. Thoughtful political leaders established the Alaska Permanent Fund. But the Permanent Fund only set aside a fraction of the oil wealth that we derived from our communal oil resources. The politicians spent the balance on a variety of programs and projects. Starting in the early 1980s, our elected state officials embarked on a spending spree that was and remains impossible to sustain if it is based mostly on oil revenue.
The glory days of government spending based on non-renewable oil revenue are drawing to a close. Our elected officials continue to spend in the face of much diminished revenue even as the amount of oil drops. This double whammy of less production and decreased price for oil has created a huge problem that the current cadre of politicians have mostly chosen to ignore.
The desire to spend without regard to our state’s actual needs or revenue stream is seemingly baked into the political structure at this juncture. Instead of reducing spending and working to balance the state’s budget with sensible taxes, the current governor and a majority of the elected officials in the statehouse have continued spending.
The current crop of politicians is addicted to spending. They’ve spent billions in the last four decades. Not satisfied with spending those billions in revenue, they’ve run through billions in savings from the Constitutional Budget Reserve Account. Hooked on spending, these same politicians have now started spending from the Alaska Permanent Fund Earnings Reserve Account. By cracking these funds, our elected politicians have shorted every Alaskan entitled to a Permanent Fund Dividend.
It’s obvious now that the politicians will continue spending every dime they can. Spending money is more fun than saving, especially if the funds belong to someone else.
The funds saved in the Permanent Fund belong to every Alaskan. The funds were derived from oil developed on public lands we selected as part of the Alaska Statehood Act. With good reason we saved a portion of the revenue derived from our state lands. With even better reason, we enacted a law that gives each Alaskan a little dividend that is generated by the oil wealth savings in our Permanent Fund.
The current governor and the majority of elected officials in the statehouse have already started cutting back the dividends. Basically, these elected officials are more interested in spending your dividend on programs and projects they desire than letting you decide how to allocate our communal wealth. Having reduced your PFD the past two years, these same politicians have started raiding the Permanent Fund by tapping an unsustainable draw from the Permanent Fund earnings and failing to inflation proof the fund.
Alaskans are getting a reduced PFD because the Alaska Legislature and the governor have failed to follow the existing PFD distribution process law. This failure to follow the law hurts those of us least able to bear the costs of living in our vast state.
The PFD is your share of the public oil wealth saved for every Alaskan. Instead of providing every Alaskan with an equal share of the interest generated from our collective savings, the politicians have decided they know better than you how to spend your dividend.
The only way to stop this kind of financial theft is to put the existing legal formula for the PFD in the Alaska Constitution.
• Joseph Geldhof is an attorney who lives in Juneau. My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire.
