Contributed by Rep. Wes Keller, House District 10
Recently the Alaska Permanent Fund has carelessly been called a “Sovereign Wealth Fund”. To equate the two is at best confusing. At worst, it is either evidence of ignorance or an intention to mislead Alaskans who have forgotten, or are careless with their ‘birthright’ (citizenship) sovereignty.
Alaskan “sovereignty” is defined on the first page of our Constitution. The unquestioned authority and power in this state belongs to “the People”, a political entity not equivalent to what we call the “state” government which the Constitution goes on to create. Our constitution creates three distinct branches of government - the executive, legislative, and judicial - expressly instituted for the “maximum benefit” (the good) of the people of Alaska, the “sovereign”.
“All political power is inherent in the people. All government originates with the people, is founded upon their will only, and is instituted solely for the good of the people as a whole.” (Alaska Constitution, Article 1, Section 2 and Article 8, Section 2)
The Alaskan government, instituted by and for the sovereign, in turn created the Alaska Permanent Fund (PF) to prevent short term legislative overspending of natural resource wealth. The only mechanism this same government instituted to ensure a “maximum benefit” from the PF earnings back to the sovereign, is the permanent fund dividend (the PFD). To argue the earnings of the permanent fund should be used to maintain legislative over-spending is ironic cognitive dissonance. It ignores the spending addiction and feeds this problem caused by state government’s easy access to the other 75% of natural resource wealth. The PF and its earnings truly is “Sovereign Wealth”. It is not state government wealth even if members of state government imply otherwise.
There is a very real, disturbing potential threat to the sovereignly owned permanent fund wealth. It comes from multiple directions:
• The Executive Branch: Governor Walker is openly promoting use of PF earnings to balance the budget deficit. He has consistently referred to the PF as a “sovereign wealth fund”, without clarifying that the executive branch is not the sovereign. His presumption goes even further if he now deliberately warps the investment standards used by the Permanent Fund Investment Board. These standards are the product of numerous statutes enacted over time by the legislature in response to its constitutional duty (9.15). The goal of the Permanent Fund Board has been to use our best investment experts and strategies to generate the highest maximum return for the sovereigns without political meddling. The Permanent Fund Board should not be lobbied by the governor to ‘invest’ with a new goal of mitigating state government budget woes. This could destroy the lofty purpose of the PF.
• The Legislative Branch: It appears there is an uncomfortably high percentage of legislators who seem to believe backfilling the unsustainable over-spending caused by the historically bountiful ‘non-PF revenue’, is somehow acceptable. The legislature is the only branch which can enact laws to specifically clarify “maximum benefit” for the “sovereign” as it did when it instituted the PFD. By design, the legislative branch is the most reflective of the will of all Alaskans (the “sovereign”). Therefore, the legislative branch is the best (arguably the only) hope to protect the PFD. On the other hand, if the sovereign elects a majority of legislative representation who believe the “maximum benefit” will come from the government spending the money as opposed individuals, Alaska will be redefined as a socialistic state. This would be a sad day and an ironic end of the lofty purpose for the PF.
• The Judicial Branch: Former Attorney General, Craig Richards, has consistently and publicly advocated for the governor’s plan to ‘tap into’ the PF earnings. He advocated for variations of a “fiscal plan” using carefully designed presentations using impressive arguments and data. The sources for his presentations come from entities who would directly benefit, in the short term, from maintenance of government overspending. An Alaskan AG is appointed by the governor (not the sovereign), and is the source of legal counsel for the entire executive branch. The AG is also the head of the entire Department of Law, including the court system. The court system in Alaska prides itself in being not “political”, which reveals its preference to be insulated from being influenced by the Sovereign.
Beware! The courts are not a safe bet for justice regarding the PFD! As agencies of the state, they also have an inherent conflict of interest. We need to be very careful about jumping into the court system to solve our problem with the governor’s unprecedented veto of PFD appropriation. Yes, what the governor did single-handedly was arguably not lawful, but our courts are not designed to be influenced by/for the sovereign. I believe a review of high court decisions would reveal numerous cases of overturned legislative actions based on ‘jaded’ interpretations of the constitution - most recently, the law requiring parental notification for abortion. We have no reason to expect justice on this matter from the judicial branch.
• Alaskan business conflict of interest may be the most disturbing threat: There are many influential Alaskans and Alaskan businesses which directly benefit from ‘generous’ state spending. Recent political ads advocating for legislative spending of PF earnings were paid for by such businesses. These ads should have transparently included a ‘conflict of interest’ disclaimer to include the amount and percentage of their revenue generated by state contracts. This threat is particularly disturbing because many Alaskans are prospering because of good jobs created by state overspending, which prospers these businesses. The unintended consequences of overspending will ultimately include the pain related to lost businesses and jobs as we are forced to pull back.
I believe our legislative branch is the best bet for protecting our PFD. To get the job done, Alaskans must elect a majority of legislators who understand the grave significance of the task and successfully defend the PFD. If the legislature fails, the potential damage from state bankruptcy (“unsustainable”) is unthinkable.