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?
The Alaskan people.
Are they benefiting?
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.