The capitol that ate capital

Spectrum, by Rep. Vic Kohring

Once again our Alaska Permanent Fund dividend is in grave jeopardy of being consumed by politicians. This time we are being told that a really safe and creative way of protecting our dividend and paying for the bottom line needs of government could be done at once. But like all of the past ideas to raid the fund, the "Percent of Market Value" is just the latest version.

POMV is a bad idea whose time has come. Fifty-five "open-minded" delegates are meeting in Fairbanks, carefully picked to give us a predictable outcome. I say predictable because I believe most of the delegates have bought the notion that the state has cut its spending as much as possible and that any means, POMV most likely, is the way to close the fiscal gap. The prominent facts that Alaska's deficit is the direct result of politicians overspending during the last 30 years and the creation of numerous programs of dubious constitutionality have been lost to most of the "open-minded" delegates.

The POMV is nothing more than a spurious carrot, dangled in front of the public. The carrot is a generous dividend we're supposedly going to receive in exchange for government finally being allowed to get its hands on the permanent fund. When examined carefully, the proposal is just a different way of raiding the fund and calling it a public benefit. It will be a first-class act of consuming our "seed corn" instead of wisely keeping it from the politician's grasp.

If we permit this to happen, we will have lost our own dignity as thinking Alaskans. Dividends should be paid only out of earnings so that there will be earnings in the future. The so-called "stable and predictable payout" of this plan is a smoke screen to spending the fund. If actuaries running a private fund were to suggest such a plan, they would be fired immediately.

We cannot simultaneously pay out a dividend each year while tapping into the fund's principal and expect to "save" the fund. This proposal does not protect the fund; instead, it protects government's profligate spending. If this is carried out we will have a continuation of Juneau as kingmaker instead of a strong private sector with a limited government.

The POMV is a notion we cannot afford to turn into reality. All the more reason why we should continue to rein in spending. We must find new ways to let free enterprise perform its miracle of productivity as the oil industry has been doing for us since the 1970s.

If we allow the POMV to go into nefarious action we will have removed all protection of the fund's corpus. We will have set the precedent for dipping into the fund the following year and there will be no stated principle left to defend it. This is simply poor money management.

The worst part about POMV is that big government, which has always lusted after the fund's corpus, is seeking to blow $1.6 million to advertise the plan in such a way to convince the public into voting for it. They're trying to spend our money to persuade us to allow the heist of the decade. Talk about giving the victim the rope to hang himself!

Oh, that conference in Fairbanks, it's going to cost $274,000 of our money too!

Vic Kohring, a Republican, represents Wasilla and the Mat-Su in the Alaska State Legislature. He's an honorary chairman of "Alaskans, Just Say No," a group formed to fight for the existence of the Alaska Permanent Fund.