Way-back machine: What voters advised lawmakers in 1999 when asked about using Permanent Fund for state budget - Must Read Alaska
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Wednesday, June 16, 2021
HomePoliticsWay-back machine: What voters advised lawmakers in 1999 when asked about using Permanent Fund for state budget

Way-back machine: What voters advised lawmakers in 1999 when asked about using Permanent Fund for state budget

In 1999, an advisory question was placed on the fall statewide ballot, asking voters if they wanted to use a portion of the Alaska Permanent Fund to pay for state government. The answer from voters was an overwhelming “No.”

At that time, the price of oil had dropped precipitously, getting as low as $9 a barrel, and lawmakers were struggling to balance the state budget, as they are today, with oil at over $70 a barrel.

Alaska voters went overwhelmingly against the proposal, and advised the government that they did not want the fund to be used to patch the hole in the state budget.

For review, the entire advisory question that voters voted down:

Preamble: The people of Alaska created the Alaska Permanent Fund to save a portion of Alaska’s petroleum revenue for the future. After investing those savings, the original intent and purpose was to use the earnings from those investments when Alaska’s petroleum revenues declined. Petroleum revenues have now declined substantially and are forecast to continue to decline. Our reliance upon declining oil production and volatile oil prices constitutes an unsustainable state budget system. The governor and state legislature seek the public’s judgment regarding a stable and sustainable long-term balanced budget plan.

Balanced Budget Plan: This will preserve the permanent fund dividend, inflation-proof the permanent fund, support public services, and establish a Citizens’ Balanced Budget Task Force. 

The Balanced Budget Plan will:

1. Spending Reductions: Continue state general fund budget reductions and commit to long-term budget discipline and efficiencies.

2. Permanent Fund Protection: Guarantee the Alaska permanent fund principal remains untouched. Inflation-proof the permanent fund to protect its value for all Alaskans, including future generations.

3. Permanent Fund Dividends: Guarantee a dividend to eligible Alaskan residents at a minimum of $1,700 in 1999 and $1,700 in 2000. Thereafter, the dividend will be approximately $1,340 and will continue to grow with the value of the permanent fund. After accounting for inflation-proofing, the dividend will be based on 50 percent of the annual earnings payment.

4. Funding for Essential Public Services: After payment of permanent fund dividends and inflation-proofing the fund, prioritize the annual investment earnings payment for essential public services.

5. Accountability: Fully disclose expenditures from the permanent fund earnings with each annual permanent fund dividend.

6. Balanced Budget Task Force: Establish a Citizens’ Balanced Budget Task Force to present options to further reduce state spending and identify appropriate future revenue sources.

7. Income Tax: No personal income tax is enacted as part of this plan.

Question: After paying annual dividends to residents and inflation-proofing the permanent fund, should a portion of permanent fund investment earnings be used to help balance the state budget?

Voters answered:

No 153,996, 83.25%

Yes – 30,994, -16.75%.

Were you in Alaska for the vote in 1999? What are your thoughts now? Write them in the comment section.

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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.

Latest comments

  • So if this is on the books, did Walker violate the law? Should he be punished?

  • We voted to move the capital twice and they ignored that as well. Politicians should be voted out of office because they fail to follow the will of the people but people have short memories or weren’t here to watch this BS unfold.

  • The state of Alaska retains subsurface mineral rights, a dividend is what the citizen gets in exchange.
    This fact seems to be overlooked.

  • If that vote were held today the numbers for NO may well be even higher but the bunch in Juneau today are little different than ones that were there in 1999 and I expect will pay no more heed to such a vote now as they did then as they continued to expand government ever since. No one seems interested in cutting government or reducing it to a size where it might again work….

  • The legislators have proven to be deaf, they don’t listen. They go to Juneau to play their little power games out of reach of the general public. Most should be removed for incompetence!

  • If it was advisory then how did approximately 154,000 voters answer NO !!!

  • I never met a single person in Copper Center that admitted to voting yes.

  • Time for MRAK to move into the 21st Century, where things are different than they were in 1999 and the state was squandering money like it was growing on trees rather than saving it up for the rainy day that was sure to come and probably is here already.

  • The horse is out of the barn. The Legislature has been funding the budget with the Permanent Fund for over 5 years now.
    Of course voters, then as now, will always vote to give them selves a raise. That is why our nation’s and State’s founders formed a republic (representative) for of government.
    A pure “democracy” is just another word for mob-rule.

  • OMG, not just deaf.

    You don’t have funds – stop spending like a drunken sailor. Stop stealing the PFD to placate your Union supporters.

  • There was not then and there is not today any trust of state government. Unless and until the operating budget is reduced – for real – there will be no trust and no decision, should there be one, will stand. A $1 billion General Fund cut out of a $12 billion annual budget is surely not too much to demand. We can start with the BSA and Medicaid.

  • Mr Nyman, your ignorance is screaming from the rooftops again – catch that horse and pen it up; even better, slay it. Just because it’s been going on for five years doesn’t mean we can’t stop it. The problem as I see it is simply a matter of trust – you just can’t trust government to do anything but spend even more money, especially when it isn’t theirs to spend. Budget cutting is not part of their being, thinking, or training, and there is no will to learn it. The public sector unions must be made to submit to the current state of the budget – pay & benefits cuts or layoffs. We have to find a way to fill the pipeline – even if it means selling oil to china – Why? Because of the overly-generous State pension program. Even if we lay off half the State employees, we won’t balance the budget – but that would be a great start. Legislature, get real about how much government we can afford. Stop stealing the PFD.

  • CHRIS NYMAN, ‘No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!’ Ronald Reagan
    So the only solution is for the people to rise up and starve the beast. Sadly the most vulnerable are hurt first as bureaucrats will inflict the maximum amount of pain before accepting any suffering themselves. The choice is clear, and long term stability requires sustainability, and sustainability does not mean squeezing every dollar from the populace until they either all become dependent upon big government or rebel. It is time to put the horse back before we have to shoot it. Socialism only works until you run out of other peoples’ money.
    And ‘democracy’ can also be defined as tyranny of the majority, which we must not allow to become the majority on the dole.
    And for the record I prefer that the government be responsibly funded by the Permanent Fund, but too many of the recent and current crops of legislators are an insult to drunken sailors.

  • It was advisory.
    .
    Legislators: Thank you for your opinion. We will now disregard it.

  • Maybe we should hear what Chris Nyman has to say.

  • I wish new state leaders would do all things proper to increase oil and gas production and fill the Trans Alaska Pipeline. Once the state is attractive and more production is flowing then use the new oil money to cover state government.

    What we have now is a government that runs oil and gas investment out with bad leadership, this can change for the better. With positive changes in the regulations and the state government, I see great hope for a bright and prosperous future!

  • Greg R., 1999 was c. $9 oil.

  • I remember when Cowper was governor him and some others in Juneau wanted to pass a law that would give half the PF to our school systems forever. Stealing money from kids and giving it to overstaffed bloated state entities and school systems is wrong.

  • After accounting for inflation-proofing, the dividend will be based on 50 percent of the annual earnings payment. 2016 changed that forever and the legislators keep cutting into our share of the earnings for the dividend. Since there are no political consequences, for the most part, they will continue to have their cake and eat most of ours too.

  • My wife and I were here and it was during the Knowles Administration. We both voted no because we believed then and now it is not the lack of funds that caused the crisis but a lack of budget control in the legislature. The State managed to use the available funds and the State did not go bankrupt. As soon as the Executive and Legislature realized they could not raid the PFD they got down to business and passed a budget with what they had available.

    We were also here for beginning of the oil wealth flowing to the State. (1969 to 1976) Gov Hammond created the PFD to be a system to share the oil revenues with Alaskans. But equally important he wanted Alaskans to have skin in the game so the people would force the legislature to not raid the PFD to fund State Government. Yes, we did live here during the time it was created. Hammond and many others were appalled about how fast the legislature spent every penny of the initial 900 million royalty payment from the oil companies to the State. So they worked to keep the legislature from spending every penny received. In 1980 Governor Hammond signed the bill passed by the legislature creating the fund and the split of the earnings to the legislature and Alaskans. The voters of AK had to pass a constitutional amendment to establish the dedicated fund and requiring a vote of all Alaskans to allow the legislature to spend the funds corpus.
    The Supreme Court ruled the legislation passed to fund the PFD payment method was advisory and the legislature could spend every penny and pay no dividend. So since Gov Walker we have had the annual battle over how much the legislature is willing to give the people or do they dare to spend it all of the earnings to insure they get re-elected. No Governor or legislature prior to Walker dared to reduce the PFD payments to Alaskans.

    If you what a PFD you need to tell your legislators directly or settle for what they give you. Without understanding that they may not be re-elected you will get little or nothing. Let them feel the heat! Contact them by email, telephone or in person!

    Not every legislator favors spending it all and giving you nothing and you need to know if it is your legislators or not. The spend everything crowd needs to understand what you will accept. Fund state government or pay a full PFD it is your decision to make happen!

  • I was very glad the voters who could vote at that time voted no.
    I hope voters today can vote to place the PFD into the state constitution, settling the matter.

  • AK, yup, oil @ $9 a barrel in 1999, but in 2008 they were up to $143 a barrel, and the boondoggles continued apace.
    We may have the most dysfunctional state government in the nation, but we are the ones who put the pols there and keep putting them back, along with their lackeys. We have only ourselves to blame, and the greed that came with the PFD doesn’t help, either. If we want it to be there in the future, we need to keep it safe and inviolable now.

  • Greg R., well in 2008 it was Palin buying votes with her grand give away and the legislature gleefully went along. How much would that money help today in the reserve? None, because if they hadn’t spent it then Walker would have pissed it away on even bigger boondoggles which we would be on the hook to fund. If we don’t have the worst we must be very near, but it is special interests both within and out of the state who put them in their nicely insulated cocoon down in Juneau where they don’t have to face us. The legislature needs to come to where we can reach them to express our disgust first hand.

  • Were you in Alaska for the vote in 1999 ?
    Yes I voted no, I’ve lived here a very long time.
    Remember it’s our PFD not the government
    Stay out of our pockets.

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