By JIM CRAWFORD
I keep hearing that Republicans must compromise to gain a fiscal plan for the State of Alaska.
Compromise is a virtue in the politically correct “woke” world. I looked at the two issues that are supposedly stopping the enactment of the fiscal plan.
First, the demand of the Democrats and the RINO Republicans that new revenue in the amount of $700 million must be added in new or current taxes in order to justify a statutory Permanent Fund dividend. A statutory dividend is one that adheres to current Alaska law, which says the dividend calculation is based on the number of eligible Alaskan applicants in a dividend year and half of the statutory net income averaged over the five most recent fiscal years.
If those of us who are advocates of the private sector just compromise and ask our Legislators to raise oil taxes by $700 million by killing the oil tax credit, we could have a fiscal plan? Right? That’s the same logic as Commonwealth North, which built a computer model with just three alternatives for folks who want a fiscal plan: 1. Raise oil taxes, 2. Enact a sales tax or 3. Re-enact a personal income tax.
Factually, we don’t need another $700 million fed to our bloated state government from the private sector. If we compromise, we capitulate.
Let’s be clear: If you read the CPA’s opinion to the financial statements of the State of Alaska, you discover that our books are in surplus. In other words, we bring in more revenue than we require to balance our state’s budget. The report also discloses that expenses each year have gone up regardless of those who would tell you that the budget has been slashed.
Let me explain. If you project a budget of $1,000 but only actually spend $800, you can claim (just like the majorities in both houses) that you have slashed the budget by 20%. The fact that last year, the Legislature spent $750 is not mentioned. The fact that you are asking to increase the budget by 25% is not mentioned.
The budget is where the liberals want you to focus. But reality is the actual income and expense of the financial statements. Do you see the shell game? They are hiding our income and expense with word games.
Second, the Democrats and the RINO Republicans deny we have the money to pay a sustained dividend. They want us to ignore the actual performance of the Alaska Permanent Fund, which in the last fiscal year made $19.4 billion net income for the fiscal year ending June 30, 2021. We made another $395.5 million just during the month of July 2021.
However, because of the insanity of the Percentage of Market Value rule, our earnings of 29.73% ($19.4 billion) were hidden from you and only 5% of profits were available for dividends and appropriations. Slick trick.
The Legislature set aside 5.25% of the entire Permanent Fund for its contribution to government expense and dividends. Arbitrarily. Willingly. They cut off the earnings to deny their constituents those earnings. Then they used the act they created to deny their constituents their earned dividends. They left the money in the Reserve account, subject to their immediate appropriation.
So, the fisherman in Bristol Bay with a wife and three kids gets stiffed $16,000, while the Legislators burn through the 3rd special session with cash per diems.
According to the financial statements for July, 2021, we have $20.9 in our Permanent Fund Earnings Reserve Account. Some legislators have the gall to say, we don’t have the money to pay the collected and earned dividend. Going back to an earnings calculation as we had for nearly 40 years and getting away from this insane system of “calculation by confusion” is required and obvious. If we compromise, we capitulate.
Dividends set by earnings calculations are always self-sustaining. The key word is “always.” If we have a good year, we pay more. If we have a bad year, we learn our lessons and change personnel, just like every other profit seeking enterprise in Alaska.
The status quo perpetrators are deathly afraid of the constitutional convention. How do the special interests hold onto their iron-fisted control of the State of Alaska budget and force more spending each year for our failed education system? Or the failed judicial appointment process that provides an automatic majority of bar association members to preclude conservative judges? Or telling people that the budget is going down while the actual expenses are exploding.
Let’s be straight: The Legislature, through its coalitions, has stopped Gov. Mike Dunleavy is his tracks. They have stopped his cost cuts, his statutory dividend, his stand against public corruption and his Constitutional amendments to protect the dividend, cap state expenses and contain the Legislature’s never-ending thirst for state taxes.
Why would a representative or senator from the rural area of the state deny his or her poor constituents their dividends? The statute on the books was not amended to change the distribution formulae. Our Legislature, abetted by Gov. Walker, changed the rules, ignored the law, and now want public approval for their intransigence and spendthrift ways.
To put the voters back in the driver’s seat means driving straight to the constitutional convention. The opposition is already using scare tactics to convince you that it’s a terrible idea. To them, it’s terrible since it takes the power away from their special interests and reinstalls the public in decision making for Alaska.
If you want a solution to the dividend, if you want an incorruptible judicial system, if you want constitution protection for a budget and a vibrant state economy, take a hard look at the constitutional convention. The protection for Alaskans is that every issue that gains a majority in a constitutional convention must be approved by the vote of a majority of Alaskans at the next election.
It is time for a change. The Legislature has proven that it will not create a fiscal plan. Their plans end the Governor’s plans for a vibrant economy. We can’t compromise without capitulation. It’s time for Alaskans to step up and vote for our children’s future.
Jim Crawford is a third-generation Alaskan entrepreneur who resides in Anchorage with his bride of 38 years, Terri. Capital Alaska LLC is a statewide commercial lender which analyses 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.