By JIM CRAWFORD
The worst-idea-of-the-year award goes to legislators who want to do away with the Permanent Fund dividend so even more money can be squirreled away or spent on more government.
Let’s look at the books and discover where the “spare change” ($18 billion) is hidden. But first, let’s look at the Alaska Constitution.
Dedicated funds are barred by the Alaska Constitution, and yet we have many unconstitutional special funds. All those special funds should be liquidated before asking Alaskans to forego their dividend. The darkest day for Alaskans would be to wake up to a reenacted income tax while we have billions hidden away from the voters.
The Alaska Constitution, Article Nine, Finance and taxation, section 7 states:
“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)”
In non-legalist language, what does that mean? It means that Alaska Housing Finance Corporation does not get to keep its accumulated surplus of $1.6 billion. It means that the Power Cost Equalization Fund should be netted to the State’s General Fund at the end of each fiscal year and not immediately reappropriated. Am I against these programs? Not by a long shot. I’d love to see AHFC spend our money on housing. But that doesn’t give the Legislators or the senior leadership of state-owned non-profit organizations the right to violate the Constitution of Alaska. Why doesn’t the Legislature take the money back from the bureaucrats who are hoarding it?
Constitutionally, there are only three ways to dedicate funds.
1. The fund must be in operation prior to our vote for statehood.
2. The fund must be set aside to meet the state’s obligations in federal programs.
3. The Constitution must be amended by a majority of the voters dedicating these Special Funds. All other Funds default to the General Fund at the end of each fiscal year.
So why is this so important? Because voters could buy the argument which has been floated for years that we’re broke and therefore must cut the dividend or do away with it all together. Fortunately, the federal government passed a bill a couple decades ago requiring any town, city, borough, state or state entity to file a comprehensive annual financial report so that the public can separate reality from political posturing. Just google CAFR 2023 Alaska and you’re in the hunt. Here’s a cursory look at what you will find:
Alaska Community Foundation Fund Balances (CBRF Market Value $167,386,768)
Alaska Energy Administration, (TNP $1,381,934,000)
Alaska Higher Education Fund (AHE Market Value $388,200,000)
Alaska Housing Finance Corporation (Total Net Position, TNP, $1,600,000.000)
Alaska Industrial Development and Export Authority (TNP $1,474,920)
Alaska Municipal Bond Bank Authority (TNP $55,483,692)
Alaska Permanent Fund (Realized Earnings $5,240,347,000)
Constitutional Budget Reserve (CBR Market Value $2,760,000,000)
Exxon Valdez Oil Spill Investment Fund (EVOS Market Value $100,500,000)
General Fund (GeFONSI Market Value $3,370,000,000)
Public School Trust Fund (PSTF Market Value $779,000,000)
Retiree Health Insurance Fund (RHIF Market Value $834,800,000)
Unless my math is off, that is $18 billion in the bank. It seems to me, we should be celebrating our largess instead of crying in our beer. Factually, there is no state in the United States that has our kind of wealth.
The senators have decided that they get to spend 75% of the earnings of the Alaska Permanent Fund on more government instead of the 50% we originally agreed upon. The governor is holding out for the full dividend. The House Majority supports the governor’s position.
What’s missing here is the consent of the governed. How do we advise those elected to represent us?
Excuses abound why the full dividend cannot be paid. But, when you look at the books, it appears that our elected members of the Legislature are looking for reasons to spend our money on more government rather than pay the dividend originally promised.
They hope you are not paying attention. Let’s prove them wrong with retirement as the reward for those who would vote against us.
Jim Crawford is a third-generation Alaskan entrepreneur who resides in Anchorage with his bride of 41 years, Terri. Crawford, known as the Permanent Fund Defender, was a member of the Investment Advisory Committee, appointed by Governor Jay Hammond to plan and execute the Alaska Permanent Fund Corporation.
