Money flows in Alaska

It looks like our legislators will be able to pass another state budget this year without taking too much of a dent out of our Permanent Fund savings.

That won’t continue forever but things seem to be going pretty well fiscally for the State of Alaska right now. The budget in recent years has been about $4.5 billion for the year and, though the dust hasn’t settled yet, the Permanent Fund has grown about $20 billion in the last year to a total of $81 billion.

Only a portion of that can be spent for government expenses but right now it looks to be a lot more than we will need. I’m an English major and no great shakes when it comes to numbers but at the moment things are looking pretty good.

We did away with the personal income tax in 1980 when the oil money was flowing in from North Slope operations. And at the moment there are no statewide personal sales taxes, though either a sales tax or a new version of the income tax seems likely in the coming years.

Another option for raising state revenues would be to increase oil taxes though that seems likely to be counter-productive when oil flows are low and company profits are far below their levels of past years. Raising taxes on oil companies would discourage their new investments at a time when we really need them.

The portion of the community that is contributing little or nothing to state expenses is you and me. That can’t continue forever but we should be thankful for tax relief as long as it lasts. Our legislators should hold off as long as possible on imposing a tax burden but you can be sure we will get one sooner or later.

Another part of the picture is the Permanent Fund Dividend which at this point in the year remains up in the air. A dividend of something like $1,500 seems likely, though it could be less — or even more. It is a nice bonus even for those who don’t need the money but we have many low-income people in this state for whom a nice dividend for each member of the family is a tremendous financial boost.

It’s that time of year when most of us begin to wonder how our finances will fare this year. The biggest variable right now is the size of the dividend but that will presumably be resolved in the coming weeks.

The Permanent Fund Dividend is a unique benefit from living in Alaska. The state gives each of us a check and it’s that time of year when people are wondering how much it will be.

The good news is that there will be a check this year. The bad news is that it might not continue forever or that it will be greatly reduced in size. My wife and I will take what we get but there are a great many low-income people for whom the Dividend is a vital part of their personal finances.

For them I’m hoping the checks will be on the high side.

Tom Brennan is an Anchorage columnist and author of six books. He was a reporter/columnist for The Anchorage Times and an editor and columnist at The Voice of The Times.