Many years from now, Alaskans will look back at the decisions our state makes today and within the next few years as pivotal moments. Whether they look back with gratitude or regret is up to us. The path forward is wide open, and the potential for a bright future is there for the taking. But so is the opportunity to stumble. Our young state is at a crossroads like none we’ve seen since statehood, and our progress can still be derailed. A vibrant and prosperous Alaska is not a guarantee, but a vision we must work towards.
I fear the recent decision by the Alaska Permanent Fund Board of Trustees to fire Executive Director Angela Rodell, abruptly and without explanation, is an example of a pivotal decision that threatens to derail progress in Alaska with wide-ranging implications for the fund and the dividend going forward.
In 2018 brave, bipartisan legislators joined my administration in working to pass SB26, a rules-based framework for sustainably drawing on earnings from the Permanent Fund to pay for dividends and state services. This, just four years after the collapse of oil prices in 2014, which decimated Alaska’s revenue base. The Permanent Fund was suddenly thrust into the spotlight in a way it never has been before, its mission changing radically from solely providing dividends, to that of providing the primary source of revenue for the state to function. But, we made that turn and slashed Alaska’s deficit from over $4 billion to $1 billion. Performance and management of the fund is now, more so than ever before, of paramount concern to all Alaskans.
At the helm of the Permanent Fund throughout this existential change was Director Rodell, keeping the state’s multi-billion dollar nest egg stable. That stability came from Rodell’s refusal to engage the fund in partisan politics despite its growing mission. Rodell never offered opinions about how the fund’s earnings should be used, instead she engaged in a strategy that money managers around the world laud her for: defending the corpus of the fund. Her steady hand on the rudder helped grow Alaska’s nest egg by $30 billion over six years. The Permanent Fund today sits at a value of over $83 billion — but this success was only possible because the Legislature has never violated SB26.
We don’t yet know the reasons for Ms. Rodell’s firing (if indeed there was one), but Alaskans are rightfully questioning whether the move has allowed partisanship to invade the Fund and politicize the board of trustees. Taken at its worst, the decision to fire Ms. Rodell appears to be retribution for her defense of the fund and a means of removing an obstacle to a bigger dividend. A politicized board, a huge overdraw of the fund, and shifting leadership with no explanation paint a worrying picture for what we hope is Alaska’s source of revenue for generations to come.
We cannot ignore the political landscape before us. Gov. Mike Dunleavy’s appointments to the board led the charge to remove Angela and have refused to explain why. Gov. Dunleavy has made it clear he will pursue a bigger dividend even if it means politicizing Alaska’s Permanent Fund, and the budget he released recently shows just that.
The budget proposal released Dec. 15, the larger PFDs, the seemingly small reductions to state services, and the balanced budget are smoke and mirrors made possible entirely by the federal government and overly optimistic oil price and production forecasts, facts Dunleavy hopes you will overlook.
Hundreds of millions of federal dollars are flowing in and around the state, with more to come, allowing Dunleavy to pad his budget, have his cake, and eat it too. Freeing up hundreds of millions in state funds by spending federal dollars opens up political opportunities for Dunleavy in his quest to pay Alaskans bigger Dividends. CARES Act funding made available to states by Congress and President Trump last year include carryforward of nearly $672 million in FY22. Dunleavy’s proposal to pay the balance of the FY22 Dividend relies on those funds as does his FY23 proposal. Dunleavy’s increased PFD proposals are only possible because of federal funds, as are many of the now fully funded state services he declared war on just a few years ago.
Dunleavy’s first act as a new governor in 2018 was to cut the budget by more than a billion dollars, an act which broke our ferry system, nearly shut down our entire state’s university system, and put services for thousands of Alaskans at risk all while demanding an enormous Dividend. Now, motivated by election year politics, Dunleavy is frantically backpedaling and is being saved by none other than the federal government he insists on fighting. Remember Dunleavy’s cuts and vetoes since he took office? Nearly all have been refunded in his current budget proposal, leaving many questioning why he spent more than three years bleeding political capital only to arrive at a budget proposal that looks much like the one I handed off to him before he unsuccessfully attempted to lop a billion dollars from it and was nearly recalled. Alaskans cannot afford another four years of wasted time and budget tricks.
Dunleavy will again work to buy your vote and provide little else except the empty promise of a bigger PFD, a promise he has made many times, but has yet to keep. Dunleavy’s choice is to falsely promise Alaskans bigger Dividends and dismantle, or use federal funds to backfill, government in the meantime.
It is Dunleavy who has painted a target on the back of the Permanent Fund, inviting politics into one of our most respected institutions, and Ms. Rodell is just the first casualty of that decision. When the Fund’s mission grew in 2018, we all knew it would take courage to see it through. For the Permanent Fund to survive and sustain Alaska for our children and grandchildren, it must be defended.
Although I made the painful decision to reduce the dividend from the amount in the statutory formula, let me be clear: I support paying out the largest dividends Alaska can sustainably afford, and I’m grateful that the legislature has stayed on this sustainable path. But, I would never overdraw or politicize the Permanent Fund. Doing so, as Dunleavy routinely proposes, robs future generations and endangers the fund’s ability to pay dividends or support state services at all.
That’s the difference between me and my opponent — I will always tell Alaskans the truth about our financial situation.
Fortunately, Dunleavy’s attack on Alaska has left us damaged, but not broken. This state has more potential than any other state in the union, it just needs to be reminded of it. Billions of dollars in federal infrastructure and support funds are on their way and leadership will be required to see those funds are spent properly. We can have meaningful PFDs and a vibrant, healthy economy, but we can’t get there if our Permanent Fund is drained and used as political football by a governor who has shown he’s willing to do both. The risk to Alaska’s future is too great.
A functional ferry system, world-class educational and university systems, and a stable, business-friendly environment are all within our reach; all Alaskans want is someone to be square with them about the choices that need to be made to achieve those goals. The Walker-Drygas ticket has the vision, the experience, and the honesty to rebuild Alaska.
Bill Walker served as the 11th governor of Alaska from 2014-2018. He lives in Anchorage with his wife, Donna. He is a candidate for governor in 2022.