By MICHAEL TAVOLIERO
Our Alaska government has a scotoma, a blind spot. It can’t see the forest for the trees.
The scotoma I’m speaking about is the Percentage of Market Value of the Alaska Permanent Fund Dividend. This is the formula now used to calculate how much of the Permanent Fund Earnings Reserve Account will be spend on government.
Angela Rodell, Chief Executive Officer of the Alaska Permanent Fund Corporation, on Jan. 29, 2018, in Must Read Alaska, wrote: “A POMV draw has a number of benefits which include protecting the entire Fund from overspending, providing a certainty of liability the Fund can manage for, as well as providing a structured, long-term source of revenue for beneficiaries of the draw. This endowment-style payout method would provide more stable and predictable payout amounts from year to year, even in down market years, and is compatible with the board’s current investment strategy.”
Sorry, Ms. Rodell. While the Alaska Permanent Fund is doing great under your leadership, you are totally wrong on all counts. The POMV has done none of that.
If anything, it has demoted the true “beneficiaries” during the greatest economic debacle the Alaska has ever experienced, in favor of the Alaska Deep State.
This includes the unions, the education industry, the health care industry, and the welfare industry. Whenever laws are written by politicians to benefit one class and do not equally represent and protect the people of the state, this is corruption.
The POMV is a corruption of the original intent of the dividend. The POMV is designed to create errors in the dividend’s proper use to gain access to more money for the state government and the Alaska Deep State.
Does anyone want to guess who are the true and original beneficiaries of the original law, which is still in statute are?
You betcha.
The Alaskan people.
Are they benefiting?
Nope.
The POMV is the political football designed to confuse the real purpose of the Permanent Fund Dividend which was simply to allow the people of Alaska to have a direct and equitable share of their collective oil wealth — a concept Jay Hammond called “Alaska, Inc.”. It has also stymied all other progress in state growth just by its presence in the room opposing sound public policy.
We who were living in Alaska at the time of the PFD inception know it is not some Marxist “basic income” concept which continues to be perpetuated by the Marxist indoctrinated newbies in the state.
Hammond points out that a proposal to cap dividends to allow more Alaska Permanent Fund money to be used for government spending “equates with imposing a head tax on every Alaskan and only Alaskans—regardless of income…. it never makes more sense to cap dividends than to simply ratchet up taxes to raise the same amount.”
Our state has yet to tap into the full potential of Alaska’s natural resources, while the Alaska Deep State has flourished. That’s a very long list not read in a very long time, because the Alaska Deep State has its collective eye on the billions of dollars generated by the Alaska Permanent Fund.
We as voters need to hold these villains responsible and accountable, yes, villains, because they are not heroes.
For almost 40 years we have seen our government mired by its own stupidity, thinking if they just talk around the subject, we won’t notice they have intellects the size of a peanut. They are leading the way into fiscal disaster upon fiscal disaster, instead of the cornucopia of wealth we all know Alaska is capable of.
Hammond speculated that “were every Alaskan annually granted his full per capita share of the wealth we could eliminate or vastly curtail all welfare programs, unemployment insurance and subsidies”.
Here we are in 2021, the Alaska Permanent Fund market value of principal and earnings reserve is almost $82 billion. With good financial management, it is potentially on track to being over $100 billion before the end of this decade, if not sooner.
We’ve all heard the idiom, “If it ain’t broke, don’t fix it!”
By enacting a statutory POMV system, the Alaska government instituted ignorance, stupidity, and real Marxism in our state government. The psychology of attacking the producers is now being instilled in our children in grade school and following them through to college into their adult years.
The POMV did the exact opposite of what it was designed to do. It created fiscal instability through rhetoric, uncertainty, and propaganda. It neither stimulated the state economy nor did it address the needs of Alaskans, especially its most underrepresented citizens in rural Alaska. Those people depend on the dividend to help them buy oil and other supplies to survive through the winter. The reduction of the PFD has created and will continue to create greater and greater hardship.
On Aug. 20, 2021, State Representatives David Eastman and Chris Kurka introduced HB 3002. It was sent to the House Special Committee on Ways and Means under the leadership of Chair Ivy Sponholz, the House Committee on State Affairs under the leadership of Co-Chairs Jonathan Kreiss-Tomkins and Matt Claman, and the House Committee on Finance, under the leadership of Co-Chairs Neal Foster and Kelly Merrick. In all three committees, HB 3002 died.
The intent of this bill was to repeal the POMV and return the State of Alaska to the original Permanent Fund dividend formula found in Alaska Statutes Title 43. Simple and straightforward.
Under current statute in Title 43, the Alaska Permanent Fund’s principal gets invested. Earnings are automatically transferred by this statute and held in the Earnings Reserve Account.
By statute and not legislative action, the earnings are first used to inflation proof the principal, then 50% of the earnings go to the annual dividend (PFD), and the rest of the balance accrues annually for government spending. Notice the order. Government spending is last.
Inflation proofing returns earnings to the principal. The dividend fund is part of the Permanent Fund like the Earnings Reserve Account, and the annual dividend amount is transferred automatically by statute. No appropriation is required by law.
Again, it was never broke, why fix it?
With the repeal of the POMV, the PFD will return the dividends due under the original intent of the Alaska Permanent Dividend Program. For those of you counting, that would mean payment for the past 2016 to 2022 to each eligible applicant of the PFD program of $13,600.
An Alaskan family of four would be entitled to $54,000.
Given the corruption behind the POMV, I suggest that the state also pay any federal income tax owed by this distribution through the interest made by the Alaska Permanent Fund since 2016.
It’s time to repeal the POMV.
Michael Tavoliero is a realtor in Eagle River, is active in the Alaska Republican Party, and chairs Eaglexit.
Very nice thoughts, intelligent and logical, which means beyond comprehension of leftist Marxist narcissistic megalomaniacs currently dishonestly controlling our legislature. And Walker may be our next governor thanks to ranked choice voting, placing perhaps the final nail in the PFD distribution coffin in favor of the special interest groups you state.
Very good thoughts, but better to first concentrate on eliminating RCV and cleaning out the legislature in favor of people representing the citizens and best interests of the state.
Past time, but that boat sailed years ago.
The PFD, barring a constitutional amendment, is gone.
And for the most part who’s to blame? Feckless alleged Republicans.
The time to talk was years ago.
It is purely and simply evil for Alaska’s legislators to ignore Alaska Statutes Title 43 and rob Alaska residents of their money. Any and every rebuttal to this is twisted and reflects an evil heart.
I see no issues with your logic nor your math. Thank you for the clarity in identifying the corruption that deprives the Alaska people of what is truly theirs.
This couldn’t have been better said. It is the only way.
Michael, I agree with your premise and conclusion. And I want my back dividends with interest. But Bro, please proofread, and beware confusing words like idiom and axiom… slowed down my reading… But still understood and appreciated. The legislature is still stuck on Cathy Giessel’s false dichotomy – steal the PFD or accept a broad-based tax. Wrong, legislature – cut the budget and fill the pipeline. We’re running about 20% of peak throughput Alyeska Pipeline, and the world needs our oil. Legislators, please don’t use the lame excuse that the feds won’t let us – I don’t think they can stop us as per Alaska Statehood Act.
Get a dictionary…..lol
I see the corruption now, thank you.
Well said, the Statute is simple and gives the control of the PFD back to the people of Alaska which will also generate an infusion of revenue back into our economy. Any time you give the meddlers in the legislature control over it, you can forget any sensible decisions that will benefit the people. They will just spend it on instituting more government and socialistic policies.
Well said. Now good luck getting the saboteurs and traitors in the GOP to actually stand for the people. The Dems are straightforward; they tell you they hate you, and that you exist to support their government largess and grift. It’s the GOP that tells you they are working for the people, and routinely stabs them in the back.. THEY are the ones you need to worry about..
Thank you for this article, I’ve been wondering about the status of the PFD all week. It was my understanding that the legislature is now in its 4th special session to remedy the budget & PFD – I missed any news that things had been “settled” and was surprised when $1,114 found its way into my checking account labeled as “PFD” last week. Is this the final amount they settled on? Are they still debating the PFD for 2021 or is this signed, sealed & delivered – and finished?
As long as the POMV exists, the PFD is the political football. It is time leadership, especially in the Senate take up its repeal.
I’m confused. Isn’t it true that the Legislature refused to allow even the dividend amount calculated under the POMV guidelines to be appropriated? If so, the problem isn’t how the dividend is calculated. The problem is the “coalition” in power in the Legislature.
No? If not, what am I missing?
Take away the political football through the repeal of the POMV, and what would you have left?
The same legislature refusing to fund the dividend calculated in a different way.
But, but, “shall” means “may”.
Keep at it, Mr. Tavoliero. You are soon destined for public office. Great article.
Michael- How is it possible for a bill (hb3002) to die in three separate House committees? If it died in one committee, how would it make it to the next? This makes zero sense.
We haven’t received a dividend from the Permanent Fund since the AK Supreme Court decided that the dividend was an appropriation. The checks we receive are funded from various accounts as part of the shell game the legislature has been playing. We’ve simply been sent a check from the legislature by way of the state of Alaska to keep us appeased until the time they decide to stop sending us a check.
Spot on Michael, wish the “leadership” of the republican party would get off their backside and get the job done for conservatives and Alaskans.
Universal Basic Income – known locally as the PFD – is the worst public policy ever. Worse yet, because people love free money, it sucks all of the oxygen out of the room when it comes to political discourse. Snakeoil for the masses. End it now and forever.
How’s about the Universal Basic Tax? What gas would that suck out of the room?
If you had bothered to read the article you’d find the author addresses your comment about “Universal Basic Income”.
Don’t have time to read it? Then don’t offer uninformed comments.
HB 3002 was deeply flawed. Average of the two-year CPI? Everyone knows the CPI is an engineered number made up in DC, also in no-way related fund earnings. What happens when CPI exceeds earnings? Do we pay our dividends back?
Michael Tavoliero: focusing on POMV draws rather than “inflation” protected earnings draws does not exclude what you propose and every Alaskan wants – to pay the people first. The people can be paid first under POMV – the rules just haven’t been agreed upon yet, so the state gets first pick until a “split” is decided, if that ends up being the method at all. The focus should be on deciding that method quickly so we (the people) quit getting leftovers rather than the main course.
I agree, Mike. The POMV does not do as advertised. The Permanent Fund Corporation lost $1 billion two years ago based on this silly formula.
Then when we earned $19.4 billion last year, the earnings aren’t counted. Earnings should determine the dividend. Well-proven, sustainable and affordable. Just like Governor Hammond foresaw.
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