By JIM CRAWFORD
Eddie Burke and I co-chaired the statewide “Just say No” campaign in 1999 to save the Alaska Permanent Fund. The people understood that earnings were vital to the success of their 1976 Amendment to protect the Alaska Permanent Fund.
Simply, the earnings from the fund would make dividends sustainable. They also understood that the Permanent Fund was established for all Alaskans, each and every one of us. All the talk we heard then and now was and is only meant to let the special interests spend the Fund. We said NO then and we must reinforce that NO again this year.
We must reestablish Permanent Fund dividends at 50% of net income after inflation proofing. We then are assured of two things: 1. The dividend is sustainable and 2. Fund managers will maximize the earnings and growth of the Fund. This is the capitalist philosophy that built America.
The sustainable approach to the PFD limits spending from the Fund to 50% of earnings less inflation. The experiment called the Percent of Market Value failed and resulted at year end FY 2020 in reducing the Fund balance by nearly $1 billion after the POMV draw was made. The balance of the Fund went down by $998 million under POMV while our dividends crashed after the Legislators got done carving up the POMV draw.
Eighty percent for government and 20 percent for the Alaska owners of the fund is not fair. The people’s dividend was their last priority.
In the last election, voters removed nine senior incumbents in the Legislature who opposed the people’s plan. Have we elected a majority that supports our majority? The people’s plan was supported by 83% of the voters in 1999. I’ll bet that majority hasn’t gone down 5 points, even with the constant pounding of the news media and the big spenders.
Past Legislatures have proven they cannot enact a long-term fiscal plan. The people, therefore, must do it for them through constitutional amendments just as Gov. Mike Dunleavy has urged. If we can’t get the votes in the Legislature to pass constitutional protection, let’s have a constitutional convention and approve them that way. We must bring back accountability in Alaska’s budgetary battles.
If the Legislature again blocks protection of our dividend and the Fund itself, there is a provision in the state constitution that allows the public’s voice to be both heard and obeyed. The people, not the Legislature or the courts, have the power to overrule and enforce any provision that is passed by a simple majority vote in a properly called Constitutional Convention. You could call it the people’s final trump card.
Let’s prepare for a constitutional convention. The last time, voters were asked if they wanted to convene a constitutional convention was in 2012. This plebiscite is required every 10 years. The 10 years is up next year, in 2022. The plebiscite question must be on the ballot every 10 years, according to Article XIII our Alaska Constitution.
Section 3, Article XIII of the Alaska Constitution says, “Constitutional conventions shall have plenary power to amend or revise the constitution, subject only to ratification by the people. No call for a constitutional convention shall limit these powers of the convention.”
This is the ultimate take back of government by the people. If voters want to protect their dividends and the corpus of the Fund, we can do so. If a majority votes to hold a Constitutional Convention, we will have one. That convention can solve a number of Alaska’s problems. Together, we can build a grand coalition of people who understand that in Alaska, the People control government, not the other way around.
Those in the Legislature who align with the people’s interest will enjoy huge support. Those who are satisfied with the short shrift given to dividend supporters to sustain “Jabba the Hutt” government will be accountable to the People.
Here’s the deal:
1. Set the dividend at 50% of Fund earnings less inflation proofing.
2. Cap draws and never exceed the earnings of the Fund less inflation.
3. Constitutionally protect the whole Fund.
4. Cancel the POMV and adopt a strict actual earnings discipline.
5. Provide an effective spending cap that limits the expansion of Alaskan government.
6. Require a majority vote of Alaskans to raise taxes or reinstate the Alaska income tax.
If you read the financial statements of the state and our agencies, you quickly understand that we have billions tucked away and yet spenders demand more. I still don’t know what our state and local governments did to spend an additional, federal covid gift of $6.5 billion in the last fiscal year.
The only ones getting stiffed are those Alaskans who get their earnings in the form of dividends. Alaskans are smart. We decided and voted decades ago to save and invest our earnings in resource development through the Alaska Permanent Fund. Our savings are growing. Thanks to all who took part in making the fiscal plan to turn barrels of oil into barrels of renewable cash. It worked.
Let us convince our friends in the Legislature to make the best deal for Alaskans. And thank them for investing our savings. Our little fund now has $81 billion and earned $16 billion so far this year.
Jim Crawford is a third-generation Alaskan entrepreneur who resides in Anchorage with his bride of 37 years, Terri. Capital Alaska LLC is a capital funder which studies and reports on and may sponsor projects of sustained economic growth for the Alaskan economy. Mr. Crawford known as the Permanent Fund Defender was a member of the Investment Advisory Committee, appointed by Governor Hammond to plan and execute the Alaska Permanent Fund Corporation.