The People of Alaska vs. The Legislature
Part XI: How Historic Citizen Reliance Constitutes Legal Possession
By Michael Tavoliero
As economic uncertainty hurts Alaskans, every household must document their historic reliance on the Permanent Fund Dividend (PFD). Start this today. Catalogue how your family used the PFD over 34 years and send it to Must Read Alaska.
The legislature stopped treating Alaskans as beneficiaries of a public trust in 2016, when Governor Walker started treating the PFD as a discretionary government appropriation. Without protest or legal challenge, the PFD will likely disappear.
One avenue of challenge is Alaska’s public-trust doctrine, whereby resource wealth is held in trust for the people and the legislature acts as trustee, not “owner.” In this way, the Permanent Fund acts as the trust’s corpus, and the PFD is Alaskans’ share of its earnings—just as the people were told it would be.
This is why diverting PFD earmarked funds into general revenue is morally and legally wrong. In State v. Weiss (1985) and Weiss v. State (1997), the Alaska Supreme Court held that when the State manages assets for beneficiaries, it must preserve the corpus, use it only for the beneficiaries’ benefit, and restore diverted assets. Treating PFD and inflation proofing mandates as discretionary appropriations violates a fiduciary duty.
Wielechowski v. State (2017) did not decide who effectively “owns” Permanent Fund earnings or whether the PFD constitutes a right for all Alaskans as beneficiaries of a trust; it held only that the dividend must be funded through typical appropriation channels. The Court expressly declined to rule on the ownership issue or trust status of the PFD. Thus, Wielechowski did not redefine the fundamental purpose of the Fund, or Alaskan’s legal right to the PFD.
From 1982 to 2016, the legislature’s long, open, and continuous administration of the PFD using a single formula (which still exists) created settled public reliance. Alaska courts recognize that where government conduct is sustained, unambiguous, and consistently affirmed, citizens develop a legitimate reliance interest. This is what Alaskans need to document. Under the doctrine of equitable estoppel, the State is prevented from reversing course whenever:
- The State took a prior position or course of conduct;
- Citizens reasonably relied on that conduct;
- That reliance was substantial; and
- Injustice would result if the State were permitted to repudiate it.
Municipality of Anchorage v. Schneider, 685 P.2d 94, 96 (Alaska 1984).
Simply put, here is how case law can be applied to the PFD
| Estoppel Element | Application to PFD |
| Legislative Conduct | Four decades of formula-based PFD distribution, publicly affirmed and institutionally administered. |
| Our Reliance | Alaskans incorporated the PFD into household budgeting, education planning, retirement strategy, and local economies. |
| Reasonableness | Reliance was encouraged by the State’s repeated statements and action treating the PFD as a consistent benefit of citizenship. |
| Injustice | Recharacterizing beneficiary income as government revenue transfers wealth from beneficiaries to trustee; a classic breach of fiduciary obligation. |
The State may adjust distribution mechanisms for more effective administration, but it may not:
- Recharacterize Permanent Fund earnings as general revenue, or
- Convert the Dividend from beneficiary entitlement into discretionary appropriation,
without breaching its fiduciary duties under Article VIII and Article IX.
The breach occurs in 2016, when the legislature stopped following the statutory PFD formula and began treating the Earnings Reserve Account as general revenue for discretionary spending, thus abandoning the distinction between its role as trustee of resource-derived wealth and its role as operator of government.
Read together, several Alaskan cases form a coherent legal strategy to establish the PFD as a trust obligation rather than general fund revenue: reliance (Schneider), fiduciary trust (Weiss I & II), and appropriation procedure (Wielechowski).
First, Municipality of Anchorage v. Schneider, 685 P.2d 94 (Alaska 1984), holds that the State may not foster long-term public reliance and then repudiate that conduct where it would cause manifest injustice. From 1982 to 2016, Alaskans relied on the PFD to structure their household finances.
Second, the Mental Health Trust cases—State v. Weiss, 706 P.2d 681 (Alaska 1985), and Weiss v. State, 939 P.2d 380 (Alaska 1997)—hold that when the State holds property in trust for a defined beneficiary class, it owes full fiduciary duties. The State may not repurpose trust assets to solve fiscal problems
Third, Wielechowski v. State, 403 P.3d 1141 (Alaska 2017), held only that PFD payments must be appropriated before distribution under Article IX, §13. It did not decide whether the PFD is a trust-based interest that is off-limits to Legislative tampering. The case clarified procedure, not ownership.
Taken together, these precedents support the following legal structure:
| Case | Governing Principle | Implication for PFD |
| Schneider (1984) | The State may not repudiate a long-standing practice upon which the public reasonably relied. | Four decades of formula-based dividends establish a reliance interest. |
| Weiss I & II (1985, 1997) | The State must administer trust assets solely for beneficiaries and cannot divert them to general use. | Permanent Fund earnings are held for the people; diversion to government spending is a breach. |
| Wielechowski (2017) | PFD payments require appropriation, but the Court did not define the nature of the right. | The appropriation step does not eliminate the beneficiaries’ equitable interest. |
The statutory PFD formula is not just a policy choice; it is the long-standing mechanism for distributing a trust-based beneficial right. When the legislature began treating Permanent Fund earnings as general revenue and cutting dividends for its own fiscal convenience, it replaced individual Alaskans as beneficiaries, breaching both its fiduciary duty and Alaskan’s reliance interest built over four decades.
The legal consequence of that breach is not rhetorical. Under Weiss, the State must restore the diverted portion of the trust benefit. Under Schneider, the State may not claim fiscal necessity to avoid doing so.
The issue now is not whether the PFD can be paid. The issue is whether the legislature will continue to thumb its nose at Alaskans and treat trust assets as its own.
The Great Debate Complete Series
Check out previous articles in The Great Debate: The People of Alaska vs the Legislature:
- Part IX: The Constitutional Trust Relationship: The State as Trustee, The People as Beneficiaries
- Part I: Inflation-Proofing: Where’s the Problem?
- Part II: Follow the Money
- Part III: The 49 Forward Plan Takes the Permanent Fund Backwards
- Part IV: The PFD and the Search for Wisdom
- Part V: Ghost Busting: Dispelling Anti-PFD Phantoms
- Part VI: The People’s Possession: Alaska’s Ownership of the Permanent Fund Dividend
- Part VII: The People’s Constitutional Covenant and the Quieting of Title
- Part VIII: The Constitutional Intent of Alaska’s Resource Wealth
- Part IX: The Constitutional Trust Relationship: The State as Trustee, The People as Beneficiaries
- Part X: The People’s Right to the PFD Based on Quiet Title