Sunday, September 24, 2023
HomeColumnsThe Great Alaska Sausage Factory

The Great Alaska Sausage Factory


We all know the metaphor: Love the sausage but don’t want to know how its made.

- Advertisement -

That is also a great metaphor for our state government where we all enjoy the benefits of government largesse but don’t want to trouble ourselves with the basic facts of how it’s paid for.

Alaska has to be the most confused state in the union because liberals and conservatives fight against and for the same issues all at the same time.

I am very conservative by most standards. I just want to see the State of Alaska balance its budget honestly and meet its obligations to its creditors and the public.

I don’t care if you tax us or cut spending, eliminate the dividend or go after the oil companies; just face the reality of the fiscal path we have been pursuing for the past 10 years. It is unsustainable. 

I would say blame has to go to every quarter of the spectrum. R’s, D’s, and the general public too.

So let’s all be the bigger person and agree that we must balance the budget, one way or another. Maybe oil taxes should be adjusted. Maybe we need a small income tax. Maybe we should cut some popular programs like Medicaid.

But none of this is possible while we continue to pay a cash dividend. Despite the flawed recommendation of ISER many years ago, the dividend is not a useful purpose of government.

I am not saying that government should spend it instead. But the simple fact is we have not enough money coming in to fund everything. I maintain the best thing we can do is to suspend the dividend. The federal funding this year will easily replace the supposed dividend benefit to the economy.

Let us change our way of thinking on the dividend. Let’s right our ship of State and seek a sustainable future. Let’s focus on the principles of what a constitutional government does best and reduce what it does not do best.

The dividend should be eliminated or substantially reformed to become a tax-exempt benefit to every Alaskan. But we really cannot even think about reform right now because there is no excess income to the State.

That could change.

We have seen the Permanent Fund grow historically beyond the rate of inflation. If that continues, the Permanent Fund could someday produce enough income to pay for State government and have surplus funds for a “dividend” of some type. But if we spend down the Permanent Fund now, that future becomes more difficult.

We are the luckiest people in the world. We are so fortunate to live here in Alaska in the most free country in the world. Then on top of that we have an oil-derived trust fund that can sustainably deliver $3 billion per year to fund the operation of our government and its resulting benefits. Otherwise we would have much fewer services or pay much higher taxes. 

All we have to do now is balance the budget. Honestly.

Chris Nyman writes occasionally for Must Read Alaska.

Suzanne Downing
Suzanne Downing
Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.


  1. Well said. In the real world dividends are the result of profit after the bills are paid. If the money that would be paid out in dividends was used to pay the bills we would all share the burden equally.
    Government needs to be reduced. If run like a business it is reasonable that the 3 billion dollar income would cover the costs of an efficient state government. If legislation needs to be passed to accomplish these goals the elected officials should be tasked to get it done asap.

  2. Again you are wrong, Chris. The Permanent Fund could become untold trillions of dollars and the fools in Juneau would find ways to fritter away that and more attempting to ingratiate and buy votes for their special interests, and also to enrich themselves in many cases. It is about far more than money, it is about the egotistical narcissistic megalomaniacs who strive like two year olds to keep themselves the center of all attention as opposed to the too few public servants trying to do the best for the most people in the state. No matter now much money they have they will want more. NO to more money and power. Like a two year old, it is time to smack fingers and tell them to get their hands out of the cookie jar! (And maybe send them home crying)

  3. You want to suspend the PFD payment then you give me the rights to the below ground mineral rights on my land. I’m tired of the government continually taking from the people who pay the most and take the least from government. The Government should be cut down to service the size of population in the state yet it continues to grow and the population leaves.

    • Individual subsurface rights would require an agreeable amendment with the fed to Alaska’s statehood act. Can’t happen until Alaska develops enough industry, and has a larger tax base … to become self sustaining without resource extraction as our primary source of income.

    • Agreed. I’d also be willing to suspend/give up the PFD if given back our below ground mineral rights.

    • Nyman did not recommend suspending the PFD. Nyman recommended reviewing the PFD in light of other mandated constitutional spending and the requirement to have a balanced budget. Perhaps you can document what Alaska takes from the people since we have no individual broad based taxes. As far as mineral rights and mining there are lots of places in Alaska you can do that activity.

  4. The state has a spending problem, not an income problem. The welfare programs the state has developed over the last 40 years are the problem. Providing 100% support to thousands of people that live where there exists no economy should have limits. The state has blown billions on projects that have ZERO evidence of their existence. Alasks Economic Development Corp. has had a 100% failure rate. Taxing me to sustain this boondoggle is not the answer.

  5. Chris,
    Always enjoy reading your perspective on Alaska, but I for one do not enjoy the “largesse” of our state and local governments today in AK.
    The pandemic has exposed the growing Socialist evolution taking place throughout most of the state.
    Elected officials have chosen to act like omnipresent Parents and not Leaders during this last year.
    The Gov jobs have grown to include too large a percent of our over all economy while the private sector has been pushed into the ground.
    Too many Alaskans are happy to look the other way and go along with the national trends just b/c their subsidized state funded job is on the line.
    This last year was a wake up call for me at just how large the gravy train has gotten out of control in AK (BTW no one wants to talk about the HUGE burden that state funded pensions has on the overall budget RN).
    Time to slim back on departments that have little to no revenue and put that money back into the private sector where it can help innovate tomorrow’s small business leaders which will actually help our GDP grow…something that desperately needs to happen throughout America RN.

  6. Sir, You have just dug your political grave…when attacking the PFD.. WHEN they decide to cut the budget and decide all the petty personal projects need to be funded from elsewhere instead of out of our PFD.. then maybe we can find a place somewhere to agree on a few things..

  7. Income tax?????????
    Are you serious???
    Do you know how many trades people, tourism industry workers, fishermen, slopers and food service workers are unemployed right now or are seasonal at best? Do you have any idea how many people live in this state who use government services and never work a day in their life?? You are a gutless wonder and a world class idiot Nyman

    • Huh, I suggest a book to you: “Basic Economics”–Thomas Sowell.
      An axiom says, “you only get what you pay for.” If you pay nothing, you get nothing in return. For example, Alaskans pay little or nothing for their children’s education; rather, its paid for primarily with oil royalties. Because Alaskans have no skin in the game, those in the education bureaucracy feel no pressure to provide value in return for their paychecks. Consequently, Alaska ranks an abysmal 47th out of 50 states in quality of education. I encourage you to study before criticizing.

      • On education you are absolutely correct! Alaska pays the highest (or very near) per student with near the worst outcomes. Parents need to demand accountability and maybe we need to delete ‘foofoo’ ‘feel good’ programs like CRT and return to the three R. Einstein said that doing the same thing over and over and expecting different results is the definition of insanity. Maybe we should halve the education budget and see if things improve.

        • There is a silver-bullet solution to education. It does require a state constitution amendment. It is described by one word: vouchers.

  8. “All we have to do now is balance the budget. Honestly.”
    Well, first off, skeptic that I am, how do we go about honestly balancing the budget? Walker gave it a shot, and look where that got him.
    People in this state, for the most part, have been given a free ride that is incomprehensible to people in other states. We have no personal state taxes. We get a PFD, which, to most out of state people, is a stipend we receive for living here. We had substantial reserve accounts, meant for hard times, which the legislature and governor have spent down, even during good times, to avoid imposing taxes on individuals or to pay for their pet projects. We have given generous tax credits to the oil companies, among the most profitable companies in the world, so they wouldn’t take their ball(s) and go home. A heap of blessings were upon us, and yet we moaned and groaned about having to pay for education, Medicare, roads (wait, that’s mostly Fed money), all the while not actually paying out of our own pockets for any of them. We are the whiniest, most entitled populace of the 50 states. And now the chickens have come home to roost. The endless source of money has finally been whittled down to little, and soon, it will be nothing. Now we have to figure out what to do.
    Cut government? Good one! Easy, until it comes time to do it. Want good roads? Want a decent university (for some of you, don’t answer that question; I knew a guy who said a set of encyclopedias was all he ever needed). Do we even want a decent public school system (a mandate in the state constitution, well, not necessarily a “good” system, but a system), how about good state troopers, care for the disadvantaged so they don’t put up a jungle in your back yard, etc., etc.? We aren’t immune to the problems all the other states have. We aren’t that special. We’re really not special at all.
    We could have done what Norway did, and we’d be sitting on a bazillion dollars right now that would fund the state, virtually, in perpetuity. But, by golly, Norway is a godless (actually, they’re mostly Lutheran), socialist state , so that could never happen, no matter how good the standard of living is there and how happy they are. So that boat has sailed.
    We’ve been getting by putting in nothing of our own for quite a while, and now we are left with nothing, or next to it. If we don’t get on the ball (you know, the one the oil companies are taking with them), we’re in for some dark times, and we will find ourselves at the opposite end of the stick from where we could have been had we been paying attention. Alaska is headed for 19th Century, third world status if things don’t change. Just cutting the budget ain’t gonna cut it, no matter what Chris Nyman or Art Chance say. We need to rethink things with the 21st Century in mind. We need to get on the ball.

    • Bravo! Bravo! But you won’t get much sympathy here on MRAK. It’s a place filled with PFD greed and no-tax birthrights.

      Alaskans are a spoiled, spoiled lot.

    • Walker made no attempt to ‘balance the budget.’ He signed onto every expansion and grabbed every shilling possible in pretense of paying for his largess.

  9. You are wrong about the PFD Chris….it belongs to the citizens of Alaska not the elected or hired government of Alaska….there is simply not one single agency of State Government that could not, and should not, be reduced by at least 25% right now and we would find a more efficient operation from every affected department and agency….

    • Permanent fund dividends were the biggest mistake ever made. Hammond and the rest were dead wrong. Handing our free money to people is the biggest formula for disaster…. equivalent to welfare… it just creates underachievers. Even communist China is smart enough to know building infrastructure is the better way to inject money into the economy. Its important for people work for money rather than getting a free check so they can get stoned and watch TV all day. Common sense is now so uncommon.

  10. Does the writer know that the PFD is just a portion of the profits so the fund will never be drained. Now if we let the legislature have its way they would spend it all.

  11. Chris you say cut or eliminate the dividend, increase revenues using an income tax and increased taxes on our largest employer, cut programs, but not a single reference to cutting a bloated, overpaid over benefited, state employee base that we can no longer afford.. How many relatives and friends do you have who are state employees?

  12. The dividend should simply be put into law (maybe it needs to be in the Constitution) using a formula related to the returns of the fund. No returns-no dividend. That needs to happen completely separate from the hands of the legislature. The state gets everything else. Build the budget around the everything else. Let the people decide how to spend their earned dividends

  13. Is there anything in his life he doesn’t feel will be better by cutting the PFD?
    Obsession is a tragic thing.

    I’ll entertain cutting my dividend when the following criteria are met:

    1-The legislature quits cutting it for me
    2-State government is cut by 30%. That means people.
    3-All state union contracts are canceled.
    4-The legislature passes a law requiring a vote of the people before any income tax can be considered.
    5-The state divests itself of the railroad and marine highway.
    6-A road is built from Skagway to Juneau.

    So in short, when he’ll freezes over

  14. Chris, you are WRONG. Cut the budget – absolutely. Cut the size of government – yes, and that will mean laying off some valuable workers. A tax? ONLY after cutting everything while maintaining a minimum of services like roads and airports. Stealing the people’s money by confiscating the PFD is the most regressive possible tax – everyone – poor and infants, the wealthy and the aged, are taxed equally when the PFD is stolen. It is NOT the State’s money. Let’s learn to right-size government – one we can afford without stealing the PFD. Sincere, but very foolish are those who espouse your ideas Chris.

  15. I’ve lived here in Alaska since 1977
    The first PFD was $1000 then it’s up and down. It’s based on a five year average. Now is the good/high years of the PFD to be calculated the same, as it was back in 1977 based on five year average. So Yes we should be getting those big check, yes it’s are money.

    Please spare me on more federal money coming into Alaska. You know the government will spend it on them selfs. So yes I can spend my own PFD fine all by myself, no help needed by this government.

  16. “ If that continues, the Permanent Fund could someday produce enough income to pay for State government and…..”. LMAO – govt will NEVER have enough money, will NEVER live within its means. It will ALWAYS overspend and thieve more money from taxpayers to pay for feel-good giveaway programs to sheeple, thereby bolstering their re-election chances. Politicians galore; wise statesmen, willing to stand on principle, exceedingly few and far between.

  17. “If we spend down the Permanent Fund”…………..same trick all you anti dividend fools try. PF is constitutionally protected, mr. liberal in the disguise! What we can spend down is the earnings reserve. That is EXACTLY what you anti dividenders want available. Take away the dividend and the majority of voters won’t pay attention to what you do with the earnings …..and you know it!
    If you were an honest person you would care about those who could really use that dividend. Instead your OK with balancing the budget on their backs.
    Your a union guy, ain’t ya, Chris!

  18. It was suicide. Funny native corporations want “ autonomy “ but require federal dollars! Native orgs don’t do shot for natives.much like BLM.

  19. How very weird that you declare “I am very conservative by most standards”, Chris, but the only specific possible cut that you muse over is Medicaid while you also heave it out there that “Maybe oil taxes should be adjusted. Maybe we need a small income tax.”

    Y’know what, Chris? You can call yourself “very conservative” all day long and bleat about what you see as the necessity to impose taxes on the productive and terminate the PFD to fund a massively bloated government but you look very much like you’re cut from the same cloth as the far left loons and parasites who most actual conservatives have come to loathe.

  20. It will no longer be a political pull-toy WHEN The Permanent Fund is cashed out and distributed to every living actual Alaskan. No mail-outs to 100,000 “Anchorage” voters who have died or fled to The Lower 48.

    I know….wishing for too much…..but we could do it if we got serious and forced it to happen.

  21. “ If that continues, the Permanent Fund could someday produce enough income to pay for State government and…..”. ………… LMAO – govt will NEVER have enough money, will NEVER live within its means. It will ALWAYS overspend and thieve more money from taxpayers to pay for feel-good giveaway programs to sheeple, thereby bolstering their re-election chances. Politicians galore; wise statesmen, willing to stand on principle, exceedingly few and far between.

  22. The dividend is absolutely NOT “unsustainable”. GOVERNMENT is what’s unsustainable. We have too much of it, and too many people with their hands out wanting more.

    Remember when Walker put nearly 100,000 able-bodied childless adults on Medicaid? Good example.

    The “permanent fund” is invested. It earns a return. The earnings go in an account. Those earnings are averaged over a 5 year period. Take that average and divide by 2. The state gets half and we get half. The problem is, the state has spent its half unchecked, and now wants our half too.

    So which is “unsustainable”? In the private sector Alaska lost 25% of its jobs, meanwhile local government jobs dropped 9%, mostly as temporary layoffs. There’s a good starting point.

    When the government is suffering and starving exactly as much as the private sector they serve, then I’ll believe the “unsustainable” garbage.

    • True but a portion of those earnings are put back into the fund for inflation proofing before dividends are paid so I don’t see how under the current formula we could ever spend down the fund.

  23. The premise here is that the PFD is just another welfare payment that Alaska cannot afford to distribute. This position is wrong on a number of levels and the conclusions reached by the author are incorrect.
    The PFD is a little slice of the earnings that stem from the decision by the citizens of Alaska to save a small portion of the non-renewable mineral wealth owned by the citizens. We were smart to set up the Permanent Fund as a savings account. The truth is, we should have saved more and spent less.
    The PFD was a way for every eligible citizen to share in the earnings of the fund by obtaining a dividend generated form the saved funds. The dividend has made Alaska’s economy more supple, broadened the private sector and distributed a slice of the earnings derived from shared savings in an equal and equitable manner.
    The Permanent Fund was not set up as some sort of rainy day account for government. The calls to end the PFD and use for government short individual Alaskans and support an inequitable demand for funding of services that in some cases benefit a select crowd of Alaskans.
    The author of this column is like a pile of our current legislators who believe they are better equipped to spend funds earned from the Permanent Fund than individual Alaskans. I for one believe individual Alaskans are capable of spending funds allocated via the PFD in a fashion that is superior to the way in which the political caste appropriates public funds in many cases.
    The truth is we have spent too much and saved too little of our non-renewable mineral resources in the last 40 years. Faced with a choice of living within our fiscal means, too many politicians seek to keep on spending, including taking away the PFD.
    The right thing to do and, indeed, the smart thing to do in the circumstance, is put a conservative PFD formula in the Alaska Constitution, a measure that will not only protect the Permanent Fund forever but also benefit every Alaskan eligible for the PFD. By putting the PFD in the Alaska Constitution and protecting the Permanent Fund permanently, this annual brawl over whether and how to pay a PFD will be taken off the table and we can finally get down to the critical issue of how to right size our state government spending in a way that is sustainable.
    Nyman’s position here is hardly conservative and certainly not based on ascertainable principle. He turns out to be yet another guy bent on spending big on government services and is willing to short the PFD paid to individual Alaskans in order to prop up unsustainable government spending.

    • We must acknowledge facts. Money is money is money. If a father budgets for both beer and groceries but continues drinking during hard times while his family goes hungry, he is irresponsible. People like to say, “the permanent fund is the people’s money.” Indeed, but so is the money being used to plow roads, pay DMV and DOL bureaucrats, pay for fuel and ammo for ADFG to shoot wolves, pay the state match for highway project, pay the governor’s salary, etc, etc, etc… Every penny held in every account by the state is the people’s money no less than the permanent fund. We can quibble forever about which coffee-can full of money is more sacred than the other. In the end its all the same money. How much sense does it make to pay the cost of income tax collection while at the same time writing checks to everyone? Look up the definition of “cognitive dissonance.”

      • Perhaps, but the cost of our government has more than doubled, mostly with generous giveaway assistance programs. These ‘feel good’ but do no one any favors as they build generational dependence. We went for many years at under 3 billion, then doubled between 2008 and 2013 when money windfall rolled in (who was governor?). Windfalls don’t last. For the good of the people it is time to start the weaning process. Then we talk taxes as the last resort.

      • Since the courts have determined the PFD money is no different than any other budgeted item, you are on to it Wayne. That’s why the only way to get a defined amount eligible for PFDs is to put it into the Constitution. Unfortunately, that takes away the ability for legislators to do their jobs in an emergency situation IMO.
        I am opposed to this amendment for this reason.

  24. The only way I would ever agree with you, is if I read the new balanced budget law in the state constitution for myself. Otherwise, why would you give politicians more money to spend on their unofficial reelection campaigns. Back in the day, they allowed a sliver of a grotesque amount of money to seed what we now know as the pfd. The stock market has now created an amazing thing for Alaskans. Imagine if just a few of them had thought that it might be a good idea to do something similar for the state budget. I know, it’s asking too much for that group.

  25. Another Tax and Spend solution to a bloated State government that is already violating the law by stealing our PFD checks. Cut the welfare programs there is no end to their greed and need for more.

  26. Bravo! Bravo! Finally, a voice of economic reason and logic here on MRAK. PFD greed and anti-tax rhetoric is endemic in this State, and it is sickening to see. I’ve espoused your ideas many times here in these comment pages, and have been seriously flamed as a result.

    Now it will be your turn, Mr. Nyman.

    The PFD is not an Alaskan birthright, nor is the right to live tax-free. Alaskan’s need to realize that the Gravy Train stopped running years ago, and the time to face the economic music has arrived.

    • To a Platonian progressive we may appear that way, but reality is elusive sometimes. It is not about the PFD so much as it is about government expansion and intrusion. How many times here do you see agreement that we are willing to pay our way but are tired of the megalomaniacs spending every penny they can steal to buy more power and votes? Making people dependent upon government largess does them no favors; quite the opposite, it destroys them.
      As related in one of my books, when a farmer has trouble with foxes in his chickens and decides to just put out feed for them instead, what happens? Surprise, he gets more foxes! As the foxes pass generations of not having to provide their own food they lose the skills to hunt and forage. When the farmer grows tired of feeding all the foxes, what happens? (hint-since they have lost the survival skills for generations they turn upon each other in brutal cruelty)
      I recently read a book about political philosophies and one paragraph sticks with me over all others. Dhaka, Bangladesh has grown to forty times its size in 1950. Like many other modern cities, rather than a ‘center of civic identity’ or ’emporium of commerce’ it has become a “rotten stinking mountain of sh!t.” And as urban anthropologist Mike Davis described in 2013, cities like this are ‘demographic volcanoes waiting to erupt.’ The global village has turned into an urban shantytown, and I give you Seattle or Portland!
      SO!, we don’t so much object to paying our own way, including the PFD, as we see this demographic of people being fostered more and more into non-productive unskilled souls existing only to vote the progressive line. One day the gravy train must end, and as Rome’s attempts to continuously placate the population by avoiding difficult choices led to 500 years of the Dark Ages, we are trying to head off the same coming disaster for as long as possible (estimations range that the population of Rome fell from two million to twenty thousand after the fall, and much of the Roman population was replaced by Lombards, Goths and Visigoths). We care about people and recognize that while some do need an occasional hand up, many more need the push to become or remain productive for their own and society’s good. That’s why we object to the wasteful government spending (bribery) in Juneau.

    • “nor is the right to live tax-free” Whid, Just what form of government are you advocating here? You shouls re-name yourself GeorgeIII

  27. Summary: Kicked can finally reaches end of road.

    Reduce the PFD, restart the income tax, cut some State expenses, and the problems go away forever. Continue with the greedy mindset of “full PFD”, and a “no taxation as birthright” mentality, and the Great State of Alaska will be finished. This is not a hard problem to solve. It’s time to act responsibly, join the ranks of the other 49 states, and get your financial affairs in order. The CBR fund is empty. Simple as that. Sorry for all those who chased the pot of gold at the end of the Rainbow all the way to Alaska, only to find that it’s already all been spent.

    • Massively reduce expenses to a sustainable level, appropriately use from Permanent Fund earnings for unanticipated expenses, then talk about more taxes. The CBR was p!ssed away by irresponsible legislators who should be publicly tarred and feathered! But it is gone now, so time to painfully return to sustainable (progressives love that word) spending and live with a balanced budget. Question: if money is tight, why do we fly legislators to Juneau? Couldn’t one of the large ferries make one trip from Whittier or Seward in January, let them live aboard for the session, then return them at the end, thus eliminating all their travel and per diem expenses? Hmm?

  28. “But the simple fact is we have not enough money coming in to fund everything.”
    Brilliant observation. We do not have a revenue problem. We have a spending problem.

    We do not have a revenue problem. We have a spending problem.

    Mr. Nyman no doubt considers himself to be an “Independent” (Alaskan for Democrat). The PFD is authorized by the state charter. State government is already violating that charter by taking any amount of the PFD. We could eliminate the PFD entirely., set up income tax and sales tax, and not one cent of the additional revenue would go toward balancing the budget. All of it would be absorbed immediately by the pork-addicted legislators, who would be squealing for more even before they were finished spending it. The only legitimate way to balance the state budget is to cut state spending. Governor Dunleavy, for all his faults, knows this, and tried, early in his tenure, to implement the necessary cuts. The squeals from both sides of our legislature were deafening. Dunleavy had no choice but to back off. “Let’s focus on the principles of what a constitutional government does best and reduce what it does not do best.” I’d put handling money on the list of things that it does not do best.

Comments are closed.

Most Popular