Dan Fagan: When it comes to the PFD, they fixed what wasn’t broken

10
356

By DAN FAGAN

If Legislators followed the law and paid the 2021 Permanent Fund dividend based on the statutory formula that is on the books, each available Alaskan would likely get $3,687 this fall. That’s based on the money in the Earnings Reserve Account on June 21.

Traditionally, the check amount is calculated at the end of the fiscal year on June 30, so the $3,687 figure is not that far off from what this year’s statutory formula will end up being.  

This is all moot, since former Gov. Bill Walker changed things by ignoring the statutory formula used for decades and instead allowed legislators to determine how the money in the earnings reserve account is spent. 

And since Republicans-in-name-only and Democrats outnumber conservatives in the Legislature, when it comes to how to spend money from the Permanent Fund Earnings Reserve Account, the people are thrown left over scraps. 

Mike Dunleavy, elected to undo Walker’s ignoring of the law and resulting PFD thievery, has been unable to fulfill his campaign promises.   

If Dunleavy was able to make good on his campaign promise to go back to following the law and paying the full statutorily required dividend and repay the money removed since the change, a family of four would be looking at a check for $43,200 this year. 

Do you think Alaskans would have ever voted for Walker if they knew it would cost a family of four that much cash? 

The legislature passed a budget with a $525 dividend this year. If it holds and the governor ends up signing it, each eligible Alaskan will lose out on $3,100 this year that’s legally theirs. 

Since state leaders started ignoring the PFD statutory formula still on the books, Alaskans are now out a combined $10,800, including the $3,100 this year, assuming the current budget stands. 

Some argue Alaskans don’t deserve that kind of money because they haven’t earned it. Sen. Natasha Von Imhof even called Alaskans who asked legislators to follow the traditional statutory formula law greedy. 

Those opposed to paying the full dividend say our state is embroiled in a fiscal crisis and we can’t afford to hand out money to Alaskans. 

And yet oddly enough, the most conservative members of the Legislature are the ones who support the full dividend the most. Almost all Democrat and RINO legislators oppose paying the full dividend. 

But aren’t conservatives supposed to be against government handouts and free unearned money? 

The money from the Alaska Permanent Fund originally came from the oil industry. It’s now so huge and capable of growth it has become quite the money maker. It grew from $65 billion last June to $81 billion this year. The fund grew so quickly over that time, it earned enough money to pay the full statutorily required dividend for this year in less than two months. 

So why are conservative legislators supporting the full dividend, while the RINOs and most Democrats opposing it? Two words: special interests. 

RINOs and Democrats are government-centric types. They’re in it for the public employee union bosses, the non-profit cabal, lobbyists, Alaska businesses benefitting financially from government bloat, deep state bureaucrats, and the Juneau swamp. They know if the money produced by the Permanent Fund goes to regular working people, it means less for the special interests. 

If you were to summarize in a sentence the legacy of Bill Walker it would be this: He changed the focus of the Permanent Fund away from a mechanism designed to share Alaska’s resource wealth with the people to one now catering to special interests. 

And yet nothing’s really changed under Dunleavy. He’s not a dictator; the Legislature is the culprit in denying Alaskans their legally required full dividend.

But Dunleavy has not used his bully pulpit in calling out anti-dividend legislators. His effort to keep his PFD promises during the campaign has been lackluster at best. 

Recently, the governor gave up on the traditional statutory formula by announcing a new plan. It’s a plan similar to the one proposed by Dunleavy’s opponent, Mark Begich. 

The traditional statutory formula suffered its final death blow when the Senate voted it down recently. Senators Peter Micciche and Josh Revak, both of whom campaigned on favoring the full dividend, were the deciding votes to kill it.  

The traditional statutory formula was working and did not add a penny to the state’s budget. Taking a five-year average of the earnings account to pay a dividend guaranteed the corpus of the fund would always grow. If the earnings reserve account had a good five years, Alaskans got a big dividend. If the earnings were off, the dividend would shrink. 

The plan was working until Walker tried to fix something that wasn’t broken. The special interests and government-centric types couldn’t be happier. 

Some opposing the full dividend also argue as the Permanent Fund grew so would the dividend. They claim the check would become so large it might attract freeloaders to the state. The $3,600 that would have been paid this year is a good example. 

If the fund continues to grow as it has in the past year, it won’t be long until we would have seen a $10,000 dividend for each eligible Alaskan under the traditional statutory formula.    

And that is a legitimate concern, although to qualify for that big check you’d have to live in the state a full year. Alaska is an expensive place to live, and the winters are long and cold. For a single person to uproot themselves and live somewhere more expensive for a year in hopes of getting a dividend check seems unlikely.  

For a large family it might make more sense. A family of five would get $50,000 once the $10,000 dividend check became a reality. 

This is something state leaders could deal with in the future if it becomes a problem by capping the dividend.

Bottom line is the PFD statutory formula the state has been using for decades was working. It’s true the state spends more than it takes in, but that’s because we spend close to triple the national average of other states.  

Under the traditional formula the state could still use half of the five-year average of the earnings of the fund to help pay for government. It had not done so in the past, but it could have.

The governor’s PFD proposal is better than what Walker has given us. But it’s a shame Dunleavy gave so little effort to fight to keep the PFD formula we’ve been using all along. Now that Dunleavy gave up on it, it’s dead for good.

Dan Fagan hosts the number one rated morning drive radio show on Newsradio 650 KENI.  

10 COMMENTS

  1. Sorry Dan, but I’ve heard this story that people will move here just for the PFD so many times before and it just is not true. There is inflation, perhaps hyperinflation now, and while the PFD may help, it really won’t act as a strong magnet (and I’ve raised 12 kids here). In 1976, my new truck cost $3500, or about a current statutory PFD. Today that truck is $60,000. When the statutory PFD reaches $10,000, that truck will likely be $250,000. The PFD helps with higher costs-$6 bread and milk, $4 gas and propane ($1.67 in Ohio), heating 9 months of the year, regular arctic gear replacement as kids grow. So even added together for a large family it’s not a great windfall in the grand scheme of living expenses, just a temporary bump in the bank account in the months before Christmas.

  2. If Governor Dunleavy had a little more support by the people of Alaska pressuring their district elected to hold them accountable, then maybe he’ll not look so alone. Right now Dunleavy has that emotionally charged Recall petition waiting in the wings waiting for its next curtain call.

    The question is Do the people of Alaska want to improve for the better, get their family members off Government assistance, get their children out of foster care, unenroll our kids from public school, start attending churches since the mental health employees could do nothing for them so they’ll give Jesus a chance to heal them from addictions and abuse that treatment could not.

    Or do the Alaskans want to die with a sinking ship losing everything including the dividends because they allowed these legislators to not get state spending under control?

    Dunleavy isnt the savior. He can’t go up agianst the entire State of Alaska corrupt system by himself. He is not like Trump who has billions and doesn’t need anyone’s approval. He needs ordinary Alaskans to pull themselves up by their boot straps. When Alaskans see those SNAP tables set-up in public, no matter how tempting it is to walk over for signing up for SNAP, they just need to keep on walking.

  3. Very fine analysis. The Dems and rinos care about Alaskan people only if they are impoverished as is the status quo. The established monopolistic wealth in our small population does not want the people to have benefit of statutory subsurface wealth taken from the private sector and will fight to maintain the social gap of the very few haves and the have nots in perpetuity. It would be appropriate to recognize your elected public servants have no intention of ever working for the people and obeying their own law.

  4. Dan, you’re attacking Mike Dunleavy again – it’s NOT his fault. The Tall Man is also a political realist, and he’s looking fr the best deal he thinks he can get from the legislature. I’m in favor of no compromise. Time for a Constitutional Convention – which the legislature will never agree to allow us – to enshrine the Statutory Formula in the State Constitution. Couple of questions: How much money does Bill Walker and his cronies make off State contracts and advising State contractors and lobbying? I smell a serious conflict of interest, possibly prosecutable. Same questions for members of the State supreme court – Bolger was instrumental in determining that the PFD was a State appropriation and therefore subject to legislative control. Please Dan, use your bully pulpit to attack the correct perps – the lefties in the legislature and those who choose to go along with them to “get things done”. Is there some way the people can call a Convention? I look forward to your response.

  5. Well I’ll be. Fagan finally got it right. Dunleavy is every bit as useless as the legislature.

    It’s true Dunleavy lacks the power to restore the PFD. He never should have ran on the issue. Fortunately he’s gonna go down as a one term failure. Unfortunately for us, he’s the Jimmy Carter of Alaska.

    What he could have done, and didn’t, was play hardball with the legislature. Instead he spent months hiding behind Ben Stevens desk.

    Dunleavy could and should have red penned the budget. He should have furloughed state workers. He could have told the legislature from day 1 anything less than $3000 for the PFD was gonna result in a vetoed budget. Most of all he never should have caved in the Wasilla call.

    And don’t forget he gave back money to the corrupt and grossly inefficient UA system. The one win he had, he surrendered it.

    The legislature owns him. Everybody but Dunleavy fan boys knows this. HE knows this.

    When Alaska needs Greg Abbott, a Governor with far less power but infinitely more spine, we get Jimmy Carter.

    When he caved on this budget, he should sign and resign. Before he “stands tall” again and we get income taxes.

  6. Am I mistaken in believing changes to the PFD couldn’t be made without the vote of the people?

  7. I think you are shooting yourself in the foot by saying the dividend could become so big that it would become a problem. That is the arguement already being used, cloaked in the disguise of “we need it for the budget, because us government types know better than the people what to spend it on”.
    .
    I used to be able to go buy a new chainsaw and get some work done. Now, I can barely afford the gas to run that old rusty chainsaw for a weekend. Pretty soon, at this rate, I’ll be lucky to knock down a dead spruce with a dull axe. But hey, maybe things will get better once they wrap up all those multi million dollar studies on the effects of arctic monarch butterfly migration wing flaps on the breeding habits of extinct bison that pondered the price of tea in China.
    .
    Oh, and don’t forget that stack of newspapers from floor to ceiling full of all the whining that took place when the Governor tried to CUT THE BUDGET.

  8. Who cares about a recall, do your job as you promised. If you’re recalled, you can hold your head high, by doing the Right Thing.
    I’m done with you Dunleavy,
    What don’t you people get it’s the law to give us a full PFD.

  9. Dan, in answer to your question as to why the “conservatives” support a full dividend… it would be wise to recall that the original intent of the fund was to whisk away money from the Legislature in order to keep them from blowing said funds on superfluous programs which ultimately increase the size and scope of government. When the size of government increases there in an inverse ratio relative to proportional personal liberty and freedom, (big nanny state = less liberty). The fund and the dividend are intended to be a tool for LIMITING wasteful government spending. Think of Less $ for the Legislature is More Freedom for the population as a whole, or Less is More! I submit that the P.F.D. could be an abbreviation for Personal Freedom Dividend. Of course empowering individuals is anathema to our elected leaders, they prefer to empower their special interests pals who support their re-election coffers and blow smoke up their collective interior southern extremities.

Comments are closed.