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Thursday, April 15, 2021
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Nyman: End the dividend

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By CHRIS NYMAN

It’s time to end the Permanent Fund dividend.

Why would I write this really unpopular opinion? Only because I feel a sense of duty to our town, our state, and country — and even the world.

I feel like I could be shunned like Ron and Penny Zobel or turned into some kind of pariah. (For the record, the Zobels were absolutely right about the dividend and residency, and they won in the State and U.S Supreme Courts).

I always assumed that common sense would prevail concerning the Permanent Fund dividend. I knew long ago that there is no individual right to the dividend and that any dividend payment would have to compete with all the other programs that “the people” had asked their legislators to build and fund.

Never in my wildest dreams did I imagine that we would completely drain our emergency savings account, the Constitutional Budget Reserve. Never did I imagine we would max out the sustainable draw from the Permanent Fund Earnings Reserve, and seek to borrow money to pay our bills (oil tax credits) in order to fund the dividend.

Due to the COVID-19 pandemic and low oil prices, the outlook is even more catastrophic. The raiding of the Constitutional Budget Reserve, which is a loan, now has to be seen as one of the stupidest moves ever.

On top of that stupidity was the arrogant dismissal of the State Constitution requirement to re-fund the Constitutional Budget Reserve from the Permanent Fund Earnings Reserve Account, when funds were available.

In fact, those funds are available and have been available, but the Legislature chose to hoard that money instead in the Earnings Reserve Account, where it can be raided with a simple majority vote.

Even worse, with no dividend this year we still project to run a deficit beyond the sustainable earnings reserve draw. What a mess.

The dividend has a pernicious effect on our society, our culture, and our government.

The old axiom “for every action there is an equal and opposite reaction” is apropos here. The negative effects of the annual billion dollar giveaway include inflation, hyper stimulating the economy, IRS tax liability, attraction of persons with high government needs and little income ability, drug and alcohol abuse, and a total corruption of our representative government by candidates and legislators who don’t tell the truth about the dividend.

Its time to end the dividend as it is currently structured. In fact, this year it is an absolute imperative. Sure, bring it back whenever we can afford it again. But don’t hold your breath.

Chris Nyman writes occasionally for Must Read Alaska.

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  • If we put more $$$ into the legislative pocket……
    It will be spent+ more.
    The only way to give up PFD $$ it to exchange the amount
    dollar for dollar for Operating expenditure cuts.

    You cut this year…we give PFD $$ back to the PD fund.

    Ever give a wino $5 on the promise he will buy clothes & food?

    Budget restraint it the duty of elected officials….and I have not seen much restraint!

    • The first duty of politicians, as perceived by themselves, is reelection. They seek reelection pandering to their base. They do that by giving things away. It is this propensity to give things away that created Alaska’s fiscal dilemma. The things they give away are owned by the state whether it is material stuff or political stuff (eg, jobs) and paid for by you and me. It is virtually hopeless to expect politicians to reduce their ability to give things away. So, the likelihood that any of them are inclined to reduce the state’s budget is zero. Otherwise it could be done in a New York minute. Consider the last legislative session where our legislators made across the aisle alliances to save state programs and spending. The only solution is vote the rascals out and replace them with new legislators, and then vote them out before they get settled in.

    • Sound reasonable to me. There has yet to be any significant spending restraint and we are still near the top nationwide in per capita government spending.

  • How but living within our means and not spend what we don’t have. Just like every household should do.

  • Chris, it is not the Government’s money. Oral Freeman created the fund to shield the government from spending all of the oil wealth.

  • Ending the dividend isn’t what fuel people’s distain… it the matter of a goverment that has refused to balance a budget over decades of boom n bust oil prices. Politicians will only blow it and over spend, hiding in Juneau, going over their allotted days and collecting perdeim for it. Glutted over billed projects and expenditures and when it’s all gone no one accountable for the overblown goverment that is the same as Washington DC
    Balance a budget, move the capital…that’s what the people want first…….then let’s talk dividend….

  • No, the Zobels were wrong, and it would have made much more sense to go with the original plan to pay based on seniority. It certainly would have at least stopped the story people like to tell of people moving to Alaska just for the dividend.

    The PFD is the recompense for the stolen property rights of its citizens. It would be better to have those rights, but at least with the PFD the money gets back to them instead of just burned on the altar of big government dreams which generally don’t help anyone but a few special interest groups.

  • Agreed. It is not sustainable and was never guaranteed. If you rely on it for sustenance you are misguided.

  • The writer offered no reasons why we should end the PFD other than general negativity. And we were already given a dividend this year, but early.

  • I agree.

  • I love satire.

  • End the PFD, spend all the fund down to the last, tax the oil companies 100% and the people 100% and legislators’ fiscal appetite will still not be satiated to buy votes. As George Bernard Shaw (an avowed socialist who openly supported Adolph Hitler) said, if you rob Peter to pay Paul, you can count on the support of Paul. No matter how much they have, they will still want more to buy their votes to power. We should not end the PFD, we should demand accountability of our legislature. Unfortunately, as evidenced by the Anchorage assembly and Mayor, enough people are on the take that everyone else must pay for their power lust.

  • Chris Nyman, you and ever other liberal politician don’t get it. The answer isn’t to end the PFD. The answer is to stop using it to supplement the state’s failing budget year after year. Use the PFD as it was intended to be used, and we wouldn’t have a problem.

    Cut the ridiculous entitlement spending.

    We do not expect the DNC, or progressive moderates who support them, to understand. Just step aside, and the conservative legislators we have in line fix the mess you crazy liberals have caused.

  • Maybe at some point… but definitely not until the ‘hogs at a trough’ mentality has been replaced, government spending has been brought in line (and then some), and special interest spending has been eliminated.

    Gross government overspending is not the PFD’s fault. It’s not the people’s fault either. The solution lies in curtailed spending and until such time as that happens Alaskans will shun your type of nonsensical babble as an extension of the problem.

  • He finds no good in the People’s Dividend. We, obviously, find “no good” in ending it. It’s kinda like the Left-Right divide in our Country these days. This guy doesn’t need a PFD, and so the rest follows. Further, he doesn’t see why Alaskans should get one. Maybe he doesn’t recognize our ownership of the State’s resources. Maybe he doesn’t recognize that Alaskans should be the direct beneficiaries, since it is our Permanent Fund created from the resources, that is being invested on our behalf. The State of Alaska is not the owner, Alaskans are. So the New World Order is taking over our Country, and our State Gov’t is taking over the People’s Dividend. Crushing freedom to save the planet. Doesn’t sound like the way to go to me… How about we preserve our freedoms first. Not create hell on earth…

    • Technically nobody “needs” a PFD. That program is larger than life but in the aggregate it’s only put about $40k in anyone’s pocket over its entire span and that’s if the applicant rec’d all of them.

      Similarly, there isn’t an “our ownership” of State resources.

      The reality is that the State is more important than the needs of an underperforming and particularly needy parasitic population segment.

      If you stop to ask yourself what exactly it is about you that separates you from the great unwashed hoard that does *not own Alaska, you’ll find that there’s nothing about you that should make you feel an intrinsic sense of ownership of dirt, minerals, or real estate you haven’t earned.

      This isn’t about anyone’s sense of personal entitlement; it’s about responsible government and responsible spending. If you need to have that PFD then you’ve invested in yourself poorly and you need this heads up:
      THE PFD IS DYING… and your spawn won’t see one. Go out and accomplish something and don’t rely on handouts. If after assessing your skills you find yourself wanting, consider moving to an area where the talent pool is particularly shallow.

      In the interim, don’t assume you own something you don’t and clouding the issue of government spending with a sense of personal entitlement won’t change a thing.

  • Lolololol. The state budget has ballooned over 4x in the last 20 years. If it had only ballooned 2x we would have been well within our means. It’s time to cut government, not the pfd!

  • Chris…you’re crazy

  • In ten years Alaska will be the poorest state in America. Why? Today the competition would be West Virginia and Mississippi. West Virginia was a coal state, and nobody in America wants coal now. Massive poverty there. Mississippi was dependent on slavery and denied half of its citizens (Black people) a decent education or the ability to start a business or earn a decent wage. But those places didn’t hand out free money to every man, woman and child in the state (remember Papa Pilgrim). Those places didn’t have big oil pay for their government. And in those states the citizens pay some form of tax to obtain essential services.
    Through 2029 Alaskans will still insist on “their big government check”. They will refuse to support government services through taxes. The community will soon deteriorate. The university system will crumble. Schools will fail. Jobs will be scarce. Drug and alcohol will be plentiful and the budget for imprisoning the criminals will skyrocket. The poorest state.

    • hahahahahahaha!

    • I don’t know, I’m thinking the PFD is doing what it’s supposed to do. Look how many people have a direct interest in government spending as a result of the declining available PFD monies.

      • Great point. The dividend was designed to protect the permanent fund by linking the people to the fund. Remove this link and you put the permanent fund at great risk. This point gets lost far too often.

    • If nobody wants coal, why did the University of Alaska just construct a new $250 million coal-fired power plant in Fairbanks?

      • That plant was complete lunacy and the concept was hatched by the U’s now disgraced leadership. It should never be used as an example to support an otherwise elusive path of logic.

        Similarly, the U should never be referred to as if they might have been making some seriously good choices over the last couple decades. They continue to defecate on their primary customer base by forcing students from Alaska’s largest population based (by far) to go to FBX or other schools to finish certain degree programs. That institution has been run by unaccountable crazy people.

  • I agree

  • Cut government, give the people their subsurface mineral rights back, and then, you can ask the people, if they want to forego the PFD.

  • Mining Pebble would be a start!!!

  • Well gosh, Chris, that’s mighty generous of you to to want to give away my money but fortunately enough, it’s not yours to give and you can go pack that bloated ego and your “sense of duty to our town, our state, and country — and even the world” away for a day when the State finally commits to meaningful cuts in spending.

    Fact is as Suzanne informed us earlier this year, “In one Alaska public school, the cost is $139,000 per pupil”: https://mustreadalaska.com/in-one-alaska-public-school-the-cost-is-139000-per-pupil

    That’s a staggering and wasteful sum but I must have missed you calling attention to it as well as to the larger issue that that so many of the unincorporated areas of the state contribute nothing at all toward the education of their youth.

    Moreover as Dan reminded us last week, nearly a third of Alaskans are on medicaid: https://mustreadalaska.com/walker-effect-nearly-a-third-of-alaskans-on-medicaid

    That’s completely unsustainable but I must have also missed your big-hearted commentary there as well, Chris.

    In fact as Suzanne made us aware in January, “Education and Medicaid make up 44% of overall state spending”: https://mustreadalaska.com/state-budget-education-and-medicaid-make-up-44-of-overall-state-spending

    Y’know, Chris, I’m sure you meant well here but you’re way off base. Go flail away at the outrageous waste the state is engaging in and get back to us when you’ve caused them to see matters your way. You’ll have much greater success with that endeavor than you ever will in convincing me that I need to part with more of what’s mine.

    • Bravo!

  • So you think people moved here for the PFD. Did they vote in the scum in Juneau to take it away from them. No, back in the beginning you didn’t see it coming that the state bureaucrats would do anything to get that money. You were naive to think otherwise.

    So now comes the blame game. The state has spent like drunken sailers and won’t stop till the pot is empty. Thanks for not protecting it from people you voted in.

    • Don’t insult sailors. At least when they spend money it is their own. Socialism works great until you run out of other peoples’ money, and our socialist leaning legislature will not stop until every penny from every possible source is exhausted, then blame us for being stingy.

  • Maybe it IS time.
    Time to cash out the investments held by The Permanent Fund and distribute all of the proceeds to legally resident Alaska. All of it.
    But also time to amend the state constitution to RESTORE our alienated property rights. End the communistic practice of denying your being paid for any mineral, any oil, any gas extracted from beneath land you own.
    Yeah! Maybe it IS time.

  • The people can spend their money however they see fit, and for the most part they do so better than government ever will. If you trust government to spend your money, feel free to give it to them they will gladly take all of it and then some.

  • Thanks for all the feedback folks. I mostly agree that our State government is too large. However, many comments are non-factual or non-realistic. I will address this in my next column.

    • Hope you put some more thought into the next one than you did with this easily picked apart mess, Chris.

  • Wow. What arrogance from you Chris.

  • Eight years ago, at a Chamber of Commerce Lunch Forum, I learned that the median annual cost to our government , of caring for every individual in the State of Alaska is $24,000 . I wish people/ residents here would do some research before condemning an individual who reiterates a continual problem in Alaska. The problem is, how to survive on continual government money.

    The average state cost per residents in the lower ‘48 is $700 per person.

    We do not pay state income taxes. Literally nothing is paid for by residents of Alaska. We’ve always been on the dole.

    Give this man an ear. I wish he had stated the cost of caring for Alaskans vs the cost other states expend. AND THEIR CITIZENS PAY TAXES!

    Legislators are also remiss in not telling us how much it costs to ensure we have a comfortable life in Alaska. And not everyone is comfortable!

    No one told the homeless that they could have had a decent life had they remained citizens rather than becoming lost souls who are now secondary dependents…. and they expect US to take care of them? Ha! We’re all on the dole up here! The homeless chose the wrong place to be dependents.

    Back to the issue… our legislators see the crunch. Seeing as how we’re all on the dole, it is timely for some group of legislators to really hit the statistics and inform us of the expenditures in this state.

    Rather than eliminating the PFD, it’s actually time for income taxes.

    My hope is that we elect really intelligent legislators who can do the numbers, tell us where the money goes, and assure us that taxes and how much, just might keep this state going.

    Right now, we’re all on the dole. Don’t forget it.

    • No matter how much they take they will spend more-mostly to buy votes to keep themselves on their high pedestal of power. Once upon a time independence and self reliance were valued, but now for a generation or more our legislators have made policies to turn those values on their head. $24,000 per head is balderdash, yet I hear many, many political ads on the radio promising more, more, more (which someone else will pay). Until we elect politicians with the fortitude to say ‘no’ the hole will deepen but I don’t anticipate that anytime soon. I look at the Anchorage assembly and there I see the future of the state and it saddens me.

    • You’re making that statement like somehow $24,000 each is the right level. Don’t you think it’s possible that they are spending a little too much? That we’re not really getting the kind of benefit you’d expect for that kind of money?

      How about we right-size our government to something equivalent to $700 each at an Alaska-adjusted level?

    • Correction: The cost per resident was $2400.00, not $24,000. Sorry for the typo.

    • Step us through this one, AKAN.

      You assert that “(w)e’re all on the dole up here” yet you’d neglected to qualify that statement except to note some vague recollection of your attendance at a Chamber of Commerce Lunch Forum in which you believe you’d heard that “the median annual cost to our government , (sic) of caring for every individual in the State of Alaska is $24,000”.

      You then leap from that statement to claim that “(r)ather than eliminating the PFD, it’s actually time for income taxes.”

      Let’s take a moment to examine your position, shall we?

      From Suzanne’s article at the following, we learn that “The FY21 budget totals $4.532 billion Unrestricted General Funds, $969 million Designated General Funds, $760.3 million other State funds, and $3.9 billion federal funding. Added together, the spending package is $10.2 billion.”: https://mustreadalaska.com/state-budget-education-and-medicaid-make-up-44-of-overall-state-spending

      According to the State, the population of Alaska was estimated to be 731,007 which results in $13,953 and change in combined spending per capita: https://live.laborstats.alaska.gov/pop

      That’s still an appalling figure yet it’s a far cry from the $24K figure you’d supplied.

      Now taking another look at Suzanne’s article linked to above, we can see that “K-12 education takes up 30 percent of the State budget” and that “Medicaid now covers the medical bills for 35 percent of the state’s population — roughly 255,500 people.”

      Far be it from me to suggest that the State shirk contributing to the educations of K-12 students, but is it unfair to ask just what we’re getting for our investment when we can see that the State is paying some of the highest per-student rates in the country with some of the most abysmal results? Here, make your way through this before you answer that: https://mustreadalaska.com/are-alaska-schools-education-desert

      And would it be further unfair to ask whether it’s appropriate for 255,000 Alaskans to be on Medicaid which has been demonstrably fraught with significant fraud, waste, and abuse? For reference, see the following: https://mustreadalaska.com/no-tell-motel-bethel-medicaid-scam-unravels

      Wouldn’t it just make considerably more sense for the legislature to revisit the scope of what the State is actually paying for K-12 education and remove the obscene fat that’s resulted in costs of up to $139,000 per pupil and to trim the roster of Medicaid recipients than to gouge the productive residents with an income tax?

      And since you believe that “it’s actually time for income taxes” because “(w)e’re all on the dole up here”, how exactly did you arrive at the conclusion that “(r)ather than eliminating the PFD, it’s actually time for income taxes” which wouldn’t impact ALL Alaskans without making mention of sales taxes which would be applied to ALL – if, in fact, it was found that no cuts to spending are viable? Why do you insist that only the productive should pay for our massively over-bloated and unsustainable government when we’re ALL “on the dole up here”, as you put it?

      Just how much “dole” are YOU on, AKAN?

  • I do not need to step you through.

    We have received the PFD for many years. That means we’re on the Dole. We expect more handouts.

    What I DID neglect to say is that we Alaskans need to support new industry in Alaska. We need to keep the oil companies with us.

    I read Suzanne Downing as much as you do. I remember so much information supplied by experts. I do not not need to parrot them.

    Good job on your record keeping. You are valuable. You and I are probably friends.

  • Aunt Sally….as good as you are, as articulate as you are, you have already far exceeded Murkowski’s input on politics of this state for the past sixteen years.

    I suspect you’ve already run for district Representative, but lost. You would have had my vote had you been in my district.

    I’m sure you’ve read Dan Fagan’s summary today of Murkowski’s involvement with Deep State.

    Aunt Sally, you have the knowledge and talent to be one of the best Republican Senators from this state. You care deeply. Your knowledge is vast. You speak well.

    Is it in your heart and energy level to run for Senator?

  • Could someone please explain to me if the PFD has to do with the loss of mineral/subsurface rights from home and land owners, why is it being distributed to everyone that has been here a year or more that are not home or land owners? Our family has lived and owned a home here for 37 yrs and received a PFD every year except this year. Apparently, if you (only 1 person) leave the state for a total of 6 months or more (for work in the construction field), you no longer qualify for a PFD that year. I would think that if you are a well established resident and have to travel to find work to feed your family that should be a legitimate reason and you should not be penalized. Especially if we still do not have the mineral/subsurface rights to our property. Thanks

    • No question that the PFD is imperfect. To some it might seem like a check should go only to those who own property. Property which, if it had minerals under it, would be a return on their investment (in buying the property AND paying local taxes – where applicable – on it. But the courts have tinkered and legislators pandered. If you’re hungry and presented a red ripe tomato do you refuse it if it isn’t perfectly round?

  • Putting a decent PFD formula that benefits every Alaska citizen eligible for payment into the Alaska Constitution is the single best way to cut down on out-of-control public spending. A constitutionally guaranteed PFD is a de facto spending cap and ought to be the number 1 priority of any elected official who cares about the long-term financial future of Alaska.

    • Joe, I respect you as an able lawyer.BUT you are arguing for Universal Basic Income. Really? How do you justify this? How do you pay for this?

  • There cannot be an income or sales tax until the Dividend is ended or re-structured at least. Its in the State Constitution.

    I agree the Legislature will spend every dime it gets its hands on. But we have reached the point where there are no more savings accounts to rob for government AND the Dividend. So now what?

    • Now, the legislature does what it should have done when Walker was governor and cut the spending down to a level that is affordable for the state. Without oil money, this state could no way afford the bloated spending it is currently blowing through if we had an income tax. An income tax on all the working people would no way support this idiocy. That is the problem that has presented itself due to the lack of vision, graft, and greed over the las 40 years. From the first inflow of money into the treasury, the state of Alaska should have been building a railroad to Nome and Kotzebue. There wouldn’t be all this conversation about the idiocy that is the Ambler Road if that railroad had been built. I still believe it would far outweigh this road to the citizens of Alaska if a railroad was being advocated today. Sooner or later, the state will have to cut the waste. Now is a better time than after the legislature starts stealing from the workers.

  • I would agree with Nyman except he is wrong on several point. The State of Alaska has several welfare programs in place, the power cost equalization and medicaid expansion among them. The Permanent Fund Dividend program is NOT what has caused the financial dilemma the state finds themselves in. The failed medicaid expansion program Walker go us into, the never economically viable Liquid Natural Gasline project that cost millions, and still is, with no reasonable expectation of ANY possibility of a return on all that money. The myriad AEDC projects, from the dairy farms to the Cook Inlet idiot ferry project to the $50 million dollar seafood plant, the state has blown through billions of dollars with no return or benefit to “we the people”. To infer the legislature is working on behalf of “we the people” is either ignorant or disingenuous. The state has a bloated workforce, and a bloated budget that pays too much for some people that which the rest of us are required to do for ourselves. Until such time as the state comes to grips with it’s welfare programs I believe disenfranchising everybody to support a few is unfair. It is as unfair as imposing an income tax on those that produce here to further allow for others to be free of this requirement due to the complete lack of production. So giving the legislature more money because they lack the fiscal resolve to manage the state’s business because of their desire to retain their position in the legislature would only result in them spending even more and needing more.

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