Editor’s note: The authors say this commentary represents their opinions only, and are not endorsed by the members of the Alaska House Majority Coalition
Now is the time to enshrine Permanent Fund Dividends in the Alaska Constitution to protect your share of Alaska’s mineral wealth from politicians, and to tell your legislators that they must do the hard work to eliminate the deficit.
For the last three years, a debate has raged about Alaska’s fiscal future – how are we going to pay for the essential state services we all need to maintain the quality of life we all expect.
Due to our near total dependence on oil revenue and the continued low price of oil, Alaska has been pushed into a fiscal crisis. This crisis will only worsen in the coming years because we are saddled with an ill-advised oil tax system that only returns fair value to the state at price levels we are not expected to see anytime soon, if ever. As a result, there is not enough money coming in to cover the cost of vital state services like public education, public safety and resource management.
Over the last few years, many of us have been bloodied, but not beaten, in the fight to ensure Troopers stay on duty, the roads are plowed and maintained, and there is funding for our seniors and students. In contrast Senate President Pete Kelly and his allies tried to slash spending on vital state services, failed to consider new revenue, and sought to reduce Permanent Fund Dividends (PFDs) in an effort to prevent any oil tax reform efforts from gaining traction in Alaska.
Because of this, it is time to permanently protect Alaskans Permanent Fund Dividends by passing a comprehensive fiscal plan and enshrining PFDs in the Alaska Constitution. We are afraid that once politicians are allowed to get their hands on the Permanent Fund they won’t stop until there are no more dividends.
The lingering recession that sprang out of the ongoing fiscal crisis continues to put a damper on our economy and is jeopardizing thousands of private and public-sector jobs. Every single indicator shows the economic well-being of our state is at risk.
That’s why a group of Republicans, Independents and Democrats in the Alaska House of Representatives decided it was time put aside partisan politics in favor of solutions. The Alaska House Majority Coalition formed with just one goal, to address the fiscal crisis by passing a comprehensive fiscal plan to save the economy and protect jobs and Alaskan families.
The plan we developed is fair because it does not unfairly burden one group over another. Our plan is responsible because over time it gets rid of the structural deficits that are jeopardizing our dwindling savings. Our plan invests in Alaska because it allows for economic development and a meaningful capital budget in the future.
Despite widespread skepticism, our Coalition successfully passed our plan through the House during the regular 90-day session only to watch the Senate Majority ignore it in favor of dangerous cuts to public education and other vital services.
Most troubling is the Senate Majority’s insistence that a massive cut to future PFDs is the only solution to Alaska’s fiscal challenges they will accept. We are sorry to report that we see a concerted effort by the Senate Majority to use up the earnings of the Permanent Fund in a very unsustainable and unfair way.
The battle this year between the new bipartisan Alaska House Majority Coalition and the Senate Majority proved to us that the Senate Majority is not the least bit interested in a comprehensive fiscal solution for Alaska. They are interested in the billions of dollars in the Alaska Permanent Fund’s Earnings Reserve Account, the account that funds Alaskans yearly Permanent Fund Dividends.
The Senate Majority continues to advocate for a PFD only solution to reduce the deficit. That isn’t right, and we can’t stand by and let that happen. The Alaska Constitution is where we enumerate the rights that we will never give up and we say the time has come to make a dividend a right for all Alaskans.
Why should the Senate Majority use your share of Alaska’s oil wealth to reduce the deficit while out of state workers and oil companies sacrifice nothing? Their plan is inherently unfair because the wealthy will pay the exact same amount as the thousands of hardworking Alaskans that are struggling to make ends meet.
Finally, economists have said that reducing the PFD does the most damage to the overall economy compared to other deficit reduction measures. This means more lost jobs, more closed businesses, and less prosperity for everyone.
These reasons are why it is time to enshrine the dividend in the Constitution, to protect your share of Alaska’s mineral wealth from politicians, and to tell your legislators that they must do the hard work to eliminate the deficit. It tells them that they cannot balance the budget solely on the backs of every Alaskan man, woman, and child. We believe this is the action required to ensure dividends into the future, and one that will force legislators to implement a fiscal plan to protect Alaska’s future.