By MICHAEL TAVOLIERO
Once, Alaska was a place where government served the people. Our constitution promised maximum local self-government, and the Permanent Fund Dividend (PFD) stood as a revolutionary covenant between every Alaskan, rich or poor, sharing in the wealth of our land.
The dividend was more than a check; it was a statement of fairness, equality, and ownership. It was the answer to an ancient problem: how to prevent government from converting public wealth into political power.
In 2018, the Legislature swapped Alaska’s long-standing statutory PFD formula for a new contrivance, the Percent of Market Value (POMV) draw. Under this device, up to five percent of the Fund’s average market value could be withdrawn each year for both dividends and government spending.
Alaskans since its inception were told the dividend was rightfully theirs, but in a stunning sleight of hand, one Democrat union affiliated state senator, aided by the Alaska Supreme Court, used lawfare to stack the deck.
Thus, we saw the rules changed mid-game, the odds further favored the house, and government coffers got fatter.
In a blur of sleight and statute, lawmakers dealt from under the deck. From that moment, the people’s share was not merely diminished, it was devoured. Each new session, legislators shoveled more into the maw of government, leaving only the crumbs for those who owned the wealth to begin with.
The PFD, once a symbol of shared ownership, became a line item to be trimmed or withheld according to political mood. Without passing a tax or seeking public consent, lawmakers quietly turned the people’s share of resource income into operating revenue. That is not budgeting. It is appropriation by stealth; the creation of an untitled, unvoted, and unnamed tax.
A Tax by Any Other Name
When lawmakers withhold a portion of the dividend from Alaskans and spend it for general purposes, it effectively levies a uniform per-person charge, also known as a head tax. The difference is only procedural. Instead of sending a bill, the government withheld what was already yours. Economists call this a reverse transfer. The outcome is identical to a tax increase. State revenues rise, household incomes fall, public unions win, and citizens lose.
The diversion of POMV funds equates to roughly $4,700 to $7,000 per person per year in Alaska under the “head tax” analogy. That cost represents roughly 5–6% of median household or per capita income in Alaska.
From Citizen Shareholder to Colonial Subject
To understand what Alaska is losing, we must recall what it once achieved. Historian Charles Beard observed that England’s first American colonies were not civic communities but chartered corporations. Trading companies were endowed by the crown with land, treasuries, and taxing power for investors across the ocean. Albert Jay Nock described them as “autonomous States”, early models of governments in which rulers and taxpayers were divided by class and distance.
The Alaska Permanent Fund Dividend was built to reverse that model. It placed ownership of Alaska’s resources in the hands of its citizens, not a governing class or distant investor. It declared the sovereign in Alaska is the individual, not the bureaucracy. When the state reduces the dividend to fund itself, it re-creates the colonial relationship Nock warned about: a political corporation exploiting the very people it was meant to serve.
The Regressive, Hidden Tax
The PFD reduction is the most regressive tax in America. A $1,000 loss barely touches a six-figure household but can mean heating oil or groceries for a working-class family. It hits hardest in rural and lower-income communities, yet it is imposed without law or equity.
Under Article IX, Section 1 of Alaska’s Constitution, only the Legislature may levy a tax—and only by statute. Yet no law was ever passed declaring, “We are taxing Alaskans by diverting their dividends.” Still, that is precisely what occurred.
Without the word “tax,” the act became one in fact: a compulsory, uniform exaction on every eligible Alaskan, imposed without statute or consent. In a surreptitious end-run around constitutional process, lawmakers fattened the bureaucracy by quietly reclaiming the people’s share, executing a head tax in everything but name and taking it straight from the tables of Alaska’s families.
A Quiet Reversal of the Revolution
Under the statutory formula, every Alaskan was a shareholder in the state’s wealth. Now, citizens have become a revenue source. Government takes its share first and calls the remainder “the people’s portion.” The citizen-owned economic structure that once made Alaska exceptional has been inverted.
This is not fiscal discipline. It is a regression toward the corporate-state model our Framers rejected. Alaska’s constitution, particularly Article VIII, was written to protect against monopolization and rent-seeking to guarantee “common use” and “maximum benefit.” The PFD was the living embodiment of that philosophy. By diverting it, lawmakers eroded the constitutional wall meant to separate public trust from political discretion.
The False Choice
Politicians claim the choice is between smaller dividends or new taxes. That is a false dichotomy. The state has already chosen taxation. It just refuses to name it. If Alaska truly needs to tax its citizens, then say it. Debate it in the open. Let the people see who stands for what. But do not disguise confiscation as “budget restraint.” Do not take from the public trust and pretend fiscal virtue.
The Moral Geometry of Ownership
The PFD was never an entitlement. It was the distribution of ownership. A modern public-trust instrument balancing the power of the state with the sovereignty of citizens. Weakening tilts that balance toward dependence and hierarchy. It tells Alaskans their government can appropriate the people’s property at will, under the guise of fiscal necessity.
The Framers of our constitution envisioned a self-supporting state, but one that would never sever the people from their resources. When government treats citizen ownership as a line item to be reallocated, it crosses from stewardship into exploitation.
A Test of Civic Courage
If lawmakers believe the people must sacrifice their dividend for the state’s solvency, they should say so plainly and first cut waste, fraud and abuse from the budget. Anything less is political evasion. An honorable government does not hide its taxation behind lawfare as this one state senator did.
Restoring the full statutory PFD is not a handout. It is a reaffirmation of the principle that Alaskans own Alaska. Sovereignty flows upward from the people, not downward from the state.
The Choice Ahead
The question before us is not merely about the dividend’s size. It is about whether Alaska will return to a citizen-owned commonwealth or continue practicing the colonial model where a governing elite administers public wealth for its own purposes.
When leaders quietly withhold what law and equity promised through weaponized litigation, they have not balanced a budget; they have imposed a tax without consent. And they have done so without the courage to name it.
Michael Tavoliero is a member of Eaglexit, Inc., a community advocate for local self-government, and a resident of Eagle River, Alaska.
The TRUTH stated !
Okay Michael, pass the cup around and let’s sue the state for our back payments on the PFD and future payments on the PFD. Trust it will uncover the criminal that sits in the governor’s mansion and his lying, mealy mouthed Adam Crum and cohorts who have been rewarded with additional positions within the administration. Let’s do it!!!
You’re talking about Dunleavy when this began prior to his term.
Due to the confusing, convoluted, and consistently changing federal income tax rules, regulations, and laws, I cannot prepare my tax returns with any degree of confidence that the IRS won’t decide to come after me for errors I might make. (This should not be the case because I graduated from high school and hold an advanced degree, but this is another topic.) I agree that the confiscated portion of the PFD is equivalent to a tax. How can we make a convincing case to the IRS that the legislature’s decision to unceremoniously take part of our PFDs for what they say is needed for the state’s purposes rather than our purposes?
I will apologize in advance if I’ve already made these comments. I have a serious grievance against unions and the power they use against us. There are many researchers who believe that there were infiltrators from the “management” side of business from the very beginning. There were riots and destruction of property just like we’ve seen in the last few years and the owners of businesses had to make some concessions. But the idea that “unions used to be good but changed over the years” is not true. It’s always been about power and control.
Unions, by design, are communist organizations in which thugs control a flock of sheep. Those sheep are either unable or unwilling to think for themselves.
Not all unions are evil. To group them together and then vilify is wrong. Choose your particular union you have grievance with and explain.
So is the Crime Boss Dunleavy and his Lying, Mealy Mouthed Adam Crum. Unions can’t hold a candle to the bait and switch of those two!!
“appropriation by stealth” drop the th out of stealth…..steal. call it what it is
Exactly! The legislature is using the PFD instead of doing their jobs. The uninformed masses don’t seem to understand that the democrats and a few rino’s are stealing from them with the help of our states liberal supreme court.
Yup! The Alaska Supreme Court erred in its decision, imho. Stating that Alaska Legislators could break Alaska Statute is not what I’d call properly interpreting the law.
While I agree with you guys on this, I do have a question:
If Walker, his legislature and finally the Alaska Supremes broke state law by refusing to pay the full statutory PFD, hasn’t subsequent legislatures and governors rewritten state law with every budget passed since then? Budgets are pieces of legislation, passed and signed and we do that every single year.
As much as I hate to say it, I wonder if every budget passed since 2016 has rewritten state law. Might be worth a discussion. Cheers –
“……..I wonder if every budget passed since 2016 has rewritten state law……….”
The state law was ruled unconstitutional. It became null and void upon the publication of the ruling. It has been 9 years. Moreover, an Alaska constitutional amendment to guarantee the Permanent Fund dividend failed to pass the Alaska House of Representatives in April 2024. The amendment, proposed by Rep. Ben Carpenter, needed a two-thirds supermajority to advance to the Senate, but it failed on a 22-18 vote. This rejection means there is no constitutional guarantee for a PFD payment at all or it’s annual amount.
As long as the legislature is allowed to hide in Juneau what we want means nothing unless it serves their purposes somehow.
They are not hiding in Juneau. My Rep and Senator have always been very accessible.
The choice ahead is either ignore the State Constitution and not fund mandated services, or gut services and guarantee income simply for living in Alaska.
What services are guaranteed in the State Constitution?
A Legislature, an Executive branch, a Judiciary, election administration, decennial apportionment, health, education, and welfare, natural resource management,budgeting, appropriations, tax exemptions, public debt, and bans “earmarking”. local governments, Initiative, Referendum, and Recall, General Provisions, Amendment and Revision.
No problem with funding the mandated services. The problem is the democrats and their water carriers believing that the level of funding is somehow locked into the Constitution. It isn’t, which with the right majority will make things very interesting. Note that if (and when) you guys win the argument, you open the door for a future conservative legislature and governor to rewrite state law using the expected AK Supremes opinion as legal justification. I’d make popcorn for the show. Cheers –
Oh “Frank”…
The irony of this post is amazing.
The mental gymnastics you had to do was Olympic level.
Thank you! For some time, I have been saying that this is the worst regressive tax in America. You rightly attribute this issue to the power of the unions and the unwillingness of our legislators to stand up against them, but that is only part of the problem. If we are unable or unwilling to cut costs, then there is no choice but to raise taxes. Low-income families cannot afford campaign contributions; only the wealthy can. Thus, the very individuals who can fund the new taxes are the ones who influence legislators through their contributions.
The men and women in the Legislature along with the Governor at the time set up the PFD as a way to share Alaska’s oil wealth with the idea being we would enjoy some of the wealth in a personal way and so have a say so in State spending. Even going so far as to suspend the State income tax as well as State school tax. However, tax and spend Democrats as well as some Republicans and Independents have dreamed up so many new ways to spend money they have stolen our little share.
“……..Even going so far as to suspend the State income tax as well as State school tax………..”
Then word used was ‘repealed’, not ‘suspend’. The definition of ‘repeal’ is “to revoke or anul”.
And just think some want to revive the income tax……… enough is enough…. Time to clean house and vote in people who represent the people and not the government.
“……..And just think some want to revive the income tax………”
……….while still mailing out free money.
Yeah, enough is enough. The free money is gone. That’s why they want to institute taxes, obviously.
its the government you get when you don’t vote.
unions support is what gets the official elected, or appointed. Or unalected.
Lisa? Judges? representative? senators?
bought and paid for!
sound the alarm Rome is burning
unions have money that belongs to me, I will never see it.
unions are upside down today, hoping that members will drop out and not get to retirement.
just funding the top end and cutting from the bottom.
sounds like our government!
Prison.
We need to hold these criminals accountable.
There is a vibe shift occurring in both sides of the aisle.
The establishment should be very afraid – study history – it’s coming and there will no hiding.
It doesn’t matter if this theft is done by democrats or republicans, it’s still theft. When citizens stop blaming the other side and start holding the individual(s) responsible accountable, good things will happen. A crook is a crook.
It’s time the State Government was held accountable to the people. But as long as the majority is voting for Democrats, that is not going to happen.
Uh Rodney, the majority aren’t voting for Democrats – please wake up…
The majority of state reps and state senators are Republicans.
The governor is Republican.
The US Congress and US Senate is Republican.
The President of the US is
Republican.
The PROBLEM is the RINO and NeoCon repubics.