Contributed by Kevin McCabe
There is a misunderstanding among some of our legislators regarding the definition and purpose of a “dividend.” It’s apparent that many lawmakers, and some Alaskans, have either forgotten why we have a Permanent Fund Dividend, or forgotten why it was instituted in the first place. There’s a further disconnect in the basic understanding how a dividend encourages the permanence of the Permanent Fund.
Merriam-Webster defines dividend as “an individual share of something distributed such as a share in a pro-rata distribution (as for profits) to stockholders. Profits are distributed to shareholders as dividends.”
The Dividend from the Permanent Fund (the PFD) was never intended to be welfare, which is apparently where it currently resides as a line-item in the state budget. In addition to providing a bit of money back for our co-ownership of the states mineral wealth, just like any dividend, it was also a means for the shareholders - the residents of Alaska in this case - to monitor the management, or mismanagement, of our Permanent Fund.
Senator Giessel is correct when she says that a dividend was not the original intent of the Permanent Fund. The Permanent Fund itself was set up to pay for State government when oil ran out. It is a mistake, however, to say there is no constitutional right to the PFD.
The Permanent Fund by design is itself constitutional. The Dividend is a voter-approved byproduct of that constitutional legislation - one that ties Alaskan’s to THEIR Permanent Fund. Because we voted to create the PFD, a vote is required to amend the formula, to terminate it completely, or even to send some of it to communities for their use. Currently the formula, as applied, and the “appropriation,” is in violation of the Constitution of the State of Alaska as well as the will of the people. Since it was such a huge material change to the PFD, the people should have been allowed to vote on SB26 which changed the formula as well as changing the Dividend from a mere budgetary “transfer” to an appropriation.
Spending of the corpus, or principle of the Fund, would be more in line with Generally Accepted Accounting Principals. Businesses do not take away formulated dividends which are already programmed for payment. Instead, as we allow the legislature to do, they fund the business first before they program or fund their dividend. This was our statutory formula which worked for three decades. If that formula, or way of doing business, results in shrinkage of the Dividend which is held by the shareholders (the “militant ring of Alaskans” referenced by Governor Jay Hammond), then we will react accordingly.
The portions of the Dividend removed under Walker, and by legislators both past and present, are monies owed to each and every Alaskan. We voted to establish the PFD formulated on the earnings of our constitutionally-established Fund. That Fund performed well and the Dividend money from those previous profitable years are owed to Alaskans based on the statutory formula. It does not matter where the funding resides in the budget; calling it an “appropriation,” instead of a “transfer” (as it was historically), does not change the nature of the Dividend funding. If the State was regulated by the SEC, they would have been investigated for the corporate theft of those monies.
And It does not appear that the money stolen from our PFD has ever been used by the legislature. So all discussion about budgets and losses to programs, because of a full PFD, is moot. It is imperative, going forward, to have a fully transparent accounting of the PF, the PFD, and how and where the money has gone.
When I asked Senator von Imhoff: ‘Why not give the people a vote?” Her response was that legislators are the only ones ordained to make this decision. And if the people did not like what she was doing they could vote her out. The fact that she and many other legislators do not trust such a weighty decision to the great unwashed masses of Alaskans should be a wakeup for us all.
Now we hear that Mayor Berkowitz and the Alaska Municipal league think that cities and towns somehow also have a right to a portion of our PFD, money which belongs to Alaskans. They want to jump on the legislative steal-the-people’s-money bandwagon. We have only to look at his proposal, one that was soundly defeated during the Hickel years, to understand exactly why Alaskans should be the ones to control their money.
The Militant Ring of Alaskans must be heard. We must go to every town hall meeting. We must flood legislators inboxes and mail boxes with emails expressing our displeasure with their actions and reminding them that they work for us. Call them. Call in to hearings and most importantly, VOTE. Vote “YES” to a constitutionally protected PFD. And vote for legislators who actually believe they work for us. In addition contact your local assemblyman. Tell him or her that you do not support the Alaska Municipal League’s grab for your PFD.
