Jim Crawford: Dedicated funds, Alaska style

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By JIM CRAWFORD

The Alaska constitution states “§ 7. Dedicated Funds. The proceeds of any state tax or license shall not be dedicated to any special purpose, except as provided in section 15 of this article or when required by the federal government for state participation in federal programs. This provision shall not prohibit the continuance of any dedication for special purposes existing upon the date of ratification of this section by the people of Alaska. [Amended 1976]”

Translating that: The Alaska Constitution forbids dedicated funds except if that dedication was in existence prior to statehood or is passed by the majority of the voters. This reference does not allow the judiciary to grant judgment in opposition to the Alaska Constitution. 

The Constitution is being ignored. The agencies have taken the lead in establishing unconstitutional dedicated funds.

Here’s a partial list of Agencies and funds that hold on to money in excess of appropriations and therefore create their own Dedicated Fund:  

  • Unrestricted and restricted net worth $1,310 Billion Alaska Industrial and Development Authority, AIDEA
  • Unrestricted and restricted net worth $1,374 Billion Alaska Energy Administration, AEA
  • Unrestricted General and minor funds (GeFonsi) $3,950 billion
  • Unrestricted and restricted net worth Constitutional Budget Reserve $1.07 Billion
  • Unrestricted and unrestricted net worth $1,575 billion, Alaska Housing Finance Corp, AHFC
  • Unrestricted balance of Earnings Reserve Account  of the Alaska Permanent Fund $3.8 Billion

TOTAL: $12,097 BILLION

Some of the funds, notably AEA, cover long held and politically powerful sponsors. Think of the Power Cost Equalization Fund. Amazingly, the Alaska Supreme Court declared it a dedicated fund without the constitutional requirements. When our own Alaska Supreme Court violates the law in a finding for their version of the common good, rather than finding for the express will of the people, our constitution no longer serves as the protector of the people’s will.  

If you want further proof of the problem, just look at the Alaska Legislature’s money grab called the “Percentage of Market Value.” It’s quite simply a raid on the Alaska Permanent Fund. It’s not a partisan issue with Democrats and Independents versus Republicans fighting each other. Instead, it is the issue of the next decade since it dictates spending of the principle of the Alaska Permanent Fund when earnings are insufficient to handle the appropriation. If you are feeling constitutionally insecure, you have that right.  

Keep in mind that the Legislature has $12 billion in the bank, enough to solve each and every Alaska problem. Even with the $12 billion, some members of the Senate and the House are proposing an income tax as part of their fiscal plan for Alaska. Their idea of a fiscal plan is to swipe your Permanent Fund Dividend and impose an income tax. Raising taxes on Alaskans or stealing our Permanent Fund dividend should not be the foundation of anyone’s fiscal plan. Permanent Fund earnings do not justify increases in operation expenses nor additional public funding for education, land management and Medicaid and other budgetary purposes.

No new taxes should be passed while the unconstitutional funds exist.  The solution is simple, as Gov. Mike Dunleavy has demonstrated.  Sweep excess money from agencies into the General Fund and then observe the constitution on dedicated funds. 

In 2023, Legislators have a choice: Bring to the people at the next election a ballot proposition that establishes dedicated funds for housing, economic development, Permanent Fund earnings or stop treating them as dedicated funds. If those unconstitutional funds go down at the public vote, enforce sweeping of the funds and appropriating them as the needs arise. Do not, however, spread the obvious untruth that we’re broke. We’re not. Do not impose new taxes on Alaskans when we have $12 billion in the bank.     

Jim Crawford is the former President of Permanent Fund Defenders, pfdak.com, an Alaska based educational nonprofit corporation. Jim is a third generation, lifelong Alaskan who co-chaired the Alaskans Just Say No campaign to stop the raid on the Permanent Fund in 1999.  He also served Gov. Jay Hammond as a member of the Investment Advisory which formed the investment and corporate strategy of the Alaska Permanent Fund Corporation in 1975.   

14 COMMENTS

  1. “$1,310 Billion”.
    That equates to 1.310 Trillion. I think you need a decimal point instead of a comma.
    You had a career in finance?

  2. Inconsistent use of a comma vs a period in numerical references creates unnecessary confusion.

  3. And we can’t keep our roads maintained or upgraded due to this lack of funding that has caused our roads to deteriorate and become like a Third World country, also we don’t even have a railroad to the continental United States ?‍?so let’s just say we are a Third World country with a bunch of greedy deep state people holding onto our money at every end, so it’s time to stop this BS and get the greedy deep state out of our bank accounts and start maintaining the state as if it is a state and not A Third World country!!?So again these people need to have term limits whether they’re elected or non-elected government employees✍??? Flushing the toilet on a regular basis ⏳⏳⏳

    • Start a GoMeFund and hire BDO to expose this.
      The last thing they expect is the peasants to stand up, and hire someone smarter than them.

  4. Mr Crawford exhibits entirely too much common sense and justification of his fantastic opinions, for the greater majority of our legislators to comprehend!

  5. “……Raising taxes on Alaskans or stealing our Permanent Fund dividend should not be the foundation of anyone’s fiscal plan…….”
    It’s more a depopulation plan. End the PFD and reinstitute the School Tax and state income tax, and our population will go back down below 500,000.
    And that sounds good to me.

  6. There is already an unconstitutional income tax. Taking the PFD from every man, woman and CHILD!! Thank you Jim Crawford for your common sense article.

  7. The misplaced commas instead of decimal points detracts from the point of the article, once you get beyond that basic numerical standard the numbers go from shocking to shocking. What’s the difference between trillions and billions anyways when it’s all funny money.

  8. If the legislature reinstalls an income tax, in light of the incredible largesse they blow through every year, there will be one less company doing business in Alaska, mine.

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