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?
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.