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.
Well said. The people own our state’s subsurface mineral rights, the government should be reminded.
Well stated Nat! I will never surrender to government tyranny! Nor should any Alaskan resident!
They need to be reminded! Corrupt politicians and their laundering of $$ through shell funds!! Then saying they are broke! Unbelievable! And citizens in Alaska basically camping out; hurting for the real dividend amount! Especially in the Bush!
And, is why they hide out in Hole In Wall Hideout called Juneau!
By the way; it unconstitutional for attorneys to hold office? Good question!
At the very least, were your consultations accurate, stop further funding. I know, a fool hardy suggestion, given
in the desperate desire to spot a unicorn. As to thinking or dreaming of any committee with such funds returning any voluntarily, Good luck with that! These committees would hold on tighter than the Indian riding on a buffalo nickel.
I do not understand why the removal of a quarter of the pfd each year is a surprise. I believe that the legislature said that they were going to do this several years back and an article was published about it. They are right on track with what they planned on doing.
Good article!!
Finally we get the real facts wondering how much $ has been laundered?
Well. When a state is over 70% illiterate population it elects corrupt self centered selfish citizens to represent them the rest of us in government. This is what we get.
It’s not going to change until the people become literate. So read-aloud to Gen-Alpha and the remaining GenX still in high school.
Well. When a state is over 70% illiterate population it elects corrupt self centered citizens to represent the rest of us in government halls and rooms . This is what we get.
It’s not going to change until the people become literate. So don’t cry about it just read-aloud to Gen-Alpha and the remaining GenZ still in high school. Crawford is preaching to the congregation who already knows. Its Gen-Alpha and GenZ should be the focus of guardian, caregivers, parents to make them more literate so there can be a new generation one day who’ll be honest and responsible public servants. First thing comes first Read to them and take control of their education.
It is a conundrum wrapped in an enigma shrouded in mystery.
In the history of the United States, there has never been a situation that a State could be funded by investment account earnings, oil royalties and corporate taxes, and not so much by personal taxes. SO MUCH money that we can pay Universal Basic Income (a Socialist ideal) and grow the bureaucracy at an extravagant rate (a competing Socialist ideal). We are in uncharted waters.
Even so-called conservatives wish to raid the public purse to a maximum level.
How about we just call a moratorium on using Permanent Fund Earnings?
Then we can have a Battle Royale between the competing Socialist visions and let them defeat each other.
Chris, the original intent of the P- Fund was to limit Government $pending.
This was achieved by placing 25% of the Oil Wealth out of the hands of the political class. The dividend concept was a means to give the people , ( the rightful owners) a bit of their wealth each year in order to help them and give them incentive to PROTECT the fund from the Political Class Coyotes.
Nothing socialist about it.
Summation: P- Fund is a tool to limit Government $pending.
Hope this helps clear up things for you.
Design and actual process appear to have become competing ideas. The Juneau contingent of trough feeders have consistently attempted to spend as much as was possible, to the point of stealing that which was supposed to be distributed to the population. It is beyond time for the people that are working in the private sector to organize and attempt to turn the ship because WE are the ones that will carry the burden when the income tax come back.
Robert, it is the crony capitalist disguised as the ” private sector” who fundamentally drive this confiscation of the P- Fund. They are the recipients of much government $.
Oddly enough, Oral Freeman created the P-Fund to keep this very thing from happening.
No voice. That’s us! Tyrannical, that’s your government! Get it???
Not a matter of ” if” but “when” they take the PFD. we all know politicians want to have all of it to piss away
According to them, all of it. Plus income taxes. And eventually the PF corpus.
The politicians and bureaucrats are trying to kill everyone to get all the money! And PFD
A global extinction event!
There is plenty of blame to go around, but my favorite PFD thieves to blame are Senators Bert Stedman (finance com. chair) and Cathy Giessel (POMV scheme author). There is still plenty of government to cut too, but no legislative will to do so. Thanks Jim for bringing these figures to light.
Yes we need to remember these two and where to find them when we lose the whole fund.
They are no more than thieves and liars.
“Thanks Jim for bringing these figures to light”…
Totally agree with you Rich on the current culprits at hand, plus the Alaska Judicial to allow mayhem.
Long ago, DAVID ROSE educated many of us on how his relatively small staff (about 60 folks), could manage the fund, make annual returns, and positive growth for the Permanent Fund. He said a check was written to the Alaska State Government where it took over 200 folks then to get the checks out to folks.
For anyone that can remember, the Alaska Legislature and State Government were always short-changing or stealing from the proceeds instead of depositing the prosperity of the year into the principal of the fund.
Any interest Mr. Crawford, Suzanne or others for further enlightenment of past bad legislative behavior shortchanging the Permanent Fund? (and providing basis for current efforts)
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