By JIM CRAWFORD
When you make a deposit at First National Bank of Alaska or Alaska USA Federal Credit Union, whose money did you deposit? It’s a simple concept but a foundational principle of the Alaska Permanent Fund.
The answer is, was and always will be: It’s your money.
If you put money into a 401K with WellsFargo, or retirement fund with UBS, whose money, is it? For your convenience, you can have an expert manage your money for you, but it is your money and no one else’s.
If Grandma and Pop give your kids $100 for Christmas and they put it in a savings account, whose money, is it? Once the check is deposited and cleared, the money held in trust is unquestionably for your kids benefit as the legal owner of the funds. In my house that required parental approval.
Can Grandma and Pop or parents demand that kids spend it on books? Sure, anyone can make a demand and most times grandparents get away with it. That’s a family decision, not a decision by the financial institution that holds the money.
The Legislature manages the Alaska Permanent Fund. Family decisions are not within the purview of the Permanent Fund dividend. The Board of Trustees of the Fund make it abundantly clear that their job is to earn the best return they can on our behalf. They don’t get to set the amount or the method of payment for our dividend. That’s the Legislators job subject to the approval of the people.
I know there are reasons why Legislators such as Sen. Josh Revak and former Sen. Cathy Giessel promise one thing in campaigns and vote the other way when they are elected. They hope you may not remember their sleight of hand. Another deceit is to redefine the argument that the dividend must be sustainable.
Sustainable in some scattered minds means that the Permanent Fund must pay a larger dividend each year. That’s not what was agreed to with Gov. Jay Hammond. Under his guidance, the dividend was tied to the earnings of the Permanent Fund and split 50/50 with the owners of the fund, who are the Alaskan people. Yes, this could mean that people could get a smaller dividend than prior years. If could also mean that those whose job it is to maximize earnings could be looking for another job.
When Gov. Bill Walker was in office, he and a majority of Legislators cooked the books to get control of the dividend. They got Judge Morris to say that the fund’s dividend we all earned when we set aside the fund as non-spendable was just like any other appropriation. The Alaska Supreme Court completed the raid and sided with Gove. Walker and the majority in the Legislature that the dividend was theirs alone to appropriate. The court ruled that the dividend wasn’t hampered by the statute the Legislature had passed setting the formulae for dividend payments.
Since then, ever more greedy majorities in both houses of the Legislature have exercised their “crumbs strategy.” The “crumbs strategy” determines first what the Legislature wants to spend on government. Then whatever is left, (the crumbs) to be paid to fund owners.
I like the discipline of the 50/50 rule (after inflation proofing) since it brings transparency, accountability and sustainability to the process of setting the dividend. Some legislators hate it. Even in a bad earnings year (whether it’s in a Simple IRA or the Alaska Permanent Fund dividend), earnings should determine the dividend, not raw political power.
Legislators have come up with ways to discount redefined earnings and set artificial caps on Fund earnings, the POMV that can’t be exceeded. We set aside the money for a rainy day. Reality check. Inflation is surging, politicians want to shut down Alaska’s energy industry. Alaska has a declining population, a recession and a pandemic. It’s pouring. Let’s get these phony arguments over the dividend behind us. Building jobs back in our non-government economy is more important than spending more money on government every year.
Jay Hammond’s approach to fairly set the 50/50 dividend worked for 40 years and could work for another 40 years. The politicos have to understand how tired Alaskans are with all the arguing about the dividend. If you agree that it’s our money and agree that we are capable of spending our earnings just as well as legislators, please advise your Legislator. Vote against those representatives and senators who vote against you in Juneau.
A constitutional convention may well be the only method for settling the dividend issue. In a constitutional convention, we can simply redefine dividends in the Constitution as 50% of the earnings of the fund after inflation proofing. The economy will be stronger. Families in Alaska will be strengthened. The people of Alaska will win. As they should. It is the people’s money.
Jim Crawford is the former President of Permanent Fund Defenders, pfdak.com, an Alaska based educational nonprofit corporation based in Eagle River, Alaska. 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 Governor Hammond as a member of the Investment Advisory Committee which formed the investment and corporate strategy of the Alaska Permanent Fund Corporation in 1975.
