Jim Crawford: The Legislative Assembly is nearing the end of the session and Alaskans are still getting crumbs from the Permanent Fund
By JIM CRAWFORD
For another session, the Alaska Legislature failed to write a budget plan for the state of Alaska. Time and again, the two chambers disagree and neither has the numbers to force the issue. What is the cost ? For Alaskans experiencing the worst inflation in decades, it’s steep. Thousands of dollars in unexpected and unwarranted spending are the result of federal, state, and local hyperspending.
Those of us who served Alaska as members of the Investment Advisory Committee at the request of Governor Jay Hammond developed a system that complied with the Governor’s Simple Equity Requirement. The dividend distribution failed at first, but as lawyers soon realized, Alaskans knew about both the issue of dividends and the availability of funds to pay them. We went back to the drawing board and wrote the 50/50 approach to spending.
Our legislature, especially the Senate, seems to find new ways to hide the money every year. The statutory formulas we proposed were profits over a period of five years, minus inflation to protect the Fund from the ravages of inflation, then split 50/50. We did this knowing that those who wanted 100% distribution of profits and those who wanted 100% distribution through the capital or operating budget would not be entirely satisfied. But we hoped they would see the compromise as fair. We required an average over a five-year earnings period to put a conservative stamp on dividends. It was sustainable since it was based on profits. It worked well for decades. Then Governor Bill Walker refused to honor the deal.
Remember the hope and thrill of guessing what the dividend would be? Remember when retailer sales would be splashed to demonstrate that every Alaskan had done well with the Permanent Fund. We had our investment fund and, with a few exceptions, the fund made money every year.
Then, as is normal, the price of oil went into the tank and jealousy replaced equity. In recent years, the left’s mantra has been to get as much out of the Fund as possible. I call this strategy “crumbs” because the Liberals want to spend every penny they can while depriving citizens of their fair income.
Last year, the Liberals wanted “just $600 million” in new taxes and would then agree to pay the full dividend. With war, inflation, and the pandemic, the state of Alaska clawed back another $3.4 billion instead, but the “crumb” theory still prevailed.
Conservatives know this is the people’s money, not theirs. They are the guardians of our wealth. Liberals, not so much.
Last year, the Alaska Permanent Fund earned $19.4 billion, according to released financial statements. Did you receive a dividend reflecting this increase in profits? Even on average over five years? Of course not. The Legislature uses a percentage of market value (POMV) to create the “crumbs” rationale. Winnings no longer mattered.
On top of that, they changed the Generally Accepted Accounting Principles (GAAF), which has been the basis of accounting principles since I was a small banker. Disclosure of financial statements marks the difference at $11.4 billion in unrealized earnings from the Permanent Fund and reduces your dividend accordingly. It would be relatively easy to realize the profits and increase the dividend accordingly.
The government should not play with our money. We need a transparent and stable way to calculate our investment income and the dividend. With a projected budget surplus of $3.4 billion for the next fiscal year, it’s time to show our legislators that we understand their game and that we’ve had enough. Partisanship doesn’t matter anymore. It’s time for lawmakers to figure out who writes the rules – the people or special interests.
Keep an eye out for the NEA’s request to double its budget this fiscal year. Incredible. They want two years ahead. It is not because of the results obtained for our children. Tests show that our third graders are failing in reading, writing and arithmetic. The NEA and its lackeys want to double the education budget and give the “crumbs” to the people.
If the Legislature cannot get the job done through regular and special sessions, it is time to admit that failure and call the constitutional convention, which was provided for in our original Constitution.
Our founding fathers and mothers decided that every 10 years the people could amend the Alaska Constitution to keep it just. Voting for the constitutional convention allows us to correct the excesses and establish what we have determined to be fairness this year and the future.
The people deserve more than “crumbs” from the legislature.
Jim Crawford is the past president of Permanent Fund Defenders, pfdak.com, an Alaska-based nonprofit educational company based in Eagle River, Alaska. Jim is a third-generation Alaskan who co-chaired the Alaskans Just Say No campaign to stop the Permanent Fund raid in 1999. He also served Governor Jay Hammond as a member of the Investment Advisory Committee, which formed the investment and corporate strategy of the Alaska Permanent Fund Corporation in 1975.