What’s Going To Happen To Our PFD?

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Contributed by Jessica Wright

Recently, rumors have spread everywhere regarding this year’s PFD. Some said we should get $5K back, while some claimed we should get $6.5K back. The debate is not whether it’s $5K or $6.5K. They are just projected numbers. The reality is we will only get $1.2K unless we have a new governor and majority of legislators who agree to pay up the full PFD amount for the last three years. 

Let’s rewind the clock back to 2016. Governor Walker used his veto power to chop our PFD.  Instead of getting $3,172, we only received $1,022. That’s $2,150 arrears. The following year, our PFD got chopped again, except this time not by Governor Walker but our legislators.  Instead of getting $2,245, we only get $1,100. That’s $1,145 arrears. This year, our PFD once again got chopped because of our “budget crisis”. Instead of getting $3,212, we will only get $1,200. That’s $2,012 arrears. 

I’m using Jim Crawford’s number as a reference. According to Jim Crawford, our state owes each Alaskan $6,507 (2,150+1,145+3,212) due to the accumulation of the 3-year’s PFD cap. There’s a similar calculation, but at a smaller scale done and the state owes us $5,048 per person.  Whatever the number you look at, there’s only one conclusion: Our state either owes us $5K or $6.5K per person. That’s a big chunk of money for many, especially for the families with moderate income.  

I have seen four different reactions:

1.    Some are shocked to see how much they got ripped off.  
2.    Some are mad at our state government for robbing them.  
3.    Some cheer for this “new-found fortune” (Who wouldn’t?).
4.    Very few people (from reading the comments, I say maybe 1%) are for capping PFD.  Personally, I have talked to hundreds of people since 2016 about this issue. All but two people are against capping PFD.
 
It’s hard to determine the impact of the PFD raid for the last three years, but I conclude four major impacts:
1.    It absorbs government enormous expenditures: Our state is at No. 1 in expenditure per capita $17,529. That’s 2.75 times higher than the national average $6,385. Even Hawaii is only $8,715.
2.    It damages our economy: The PFD is a big stimulator of our local economy. There’s no specific number to show the impact, but we all know many companies moved out of our state last 2-3 years. All three Sam’s Clubs closed recently and recent Sears Mall closure. Thousands of people lost their employment. Last year, was the first time the state population declined since 1988 (nearly three decades ago). Many people moved out because they can no longer afford to live in this state.
3.    Loss of revenue: By withholding our PFD and parking the money to the state reserved account, some said we lost $3 billion in revenue for not being able to make great earnings during the strong stock market.
4.    The potential bankruptcy: Governor Walker is using our PFD to bank his AKLNG natural gas pipeline project. Using POMV formula, the state government is able to use more PFD money directly from our PFD investment account. It’s especially dangerous when Walker plans to work with China, who will have the control of the gas pipeline. Remember the deal they signed: China 75%, Alaska 25%. 


It’s clear to say this coming election will determine the fate of our PFD and our state. If we choose to stay with Walker and the incumbents (let’s face it, most of the legislators are for capping our PFD), we will more likely to lose our PFD. We may receive $1K for a few years, and pretty soon there will no more PFD because the legislature is tapping into it. Plus, the deal Walker signed with China. Who knows what kind of bondage we are going to endure? Or we wise up by choosing the people who will protect our PFD to be our leaders. We might get $6.5K or $5k back this year, plus the continuous flow of PFD dividend year after year.  

So Alaskans, it’s up to you to determine the fate of our PFD and our state, and I hope you will choose wisely. Do not vote for cappers no matter how charming/friendly/authoritative they seem to be. If nobody is running against the capper in your district, you should consider to run for the people’s sake.