The Dividend deserves a vote of the People

In 1976, under Article 9, Section 15 of the Alaska Constitution, the Alaska Permanent Fund was established. Oil revenues were flowing to the State and were beginning to be used to pay for Alaska Government. The legislature had too frivolously spent the initial $900 million bonus Alaska received in 1969. It became abundantly clear that a means to “save” some of this money for future generations should be an important part of managing our state. And that meant getting it out of the hands of the legislature and/or the governor.

Oil is a fixed asset that, once sold, is gone forever. So, the fund had to include not only a means to fund government in the future, but also a way to create an income generating “savings account” that would be dedicated to future generations who would no longer have oil as a resource. The first money for this fund was managed by the Department of Revenue, Treasury Division, and began flowing into state coffers in 1977. In 1980, the Alaska State Legislature created the Alaska Permanent Fund Corporation (APFC) to manage this growing wealth. Each year, the fund's realized earnings are split between inflation-proofing, operating expenses, and the annual Permanent Fund Dividend.

The Dividend part of the equation was set up, largely by Governor Hammond, to give every Alaskan a chance to share in the Mineral Wealth that we all gave up, in 1959, to become the resource rich 49th State. The Dividend is a fraction of a fraction of mineral lease rentals, royalties and royalty sales proceeds, federal mineral revenue sharing payments, and bonuses; all received by the state and set aside for the Permanent Fund.

Since inception, the Dividend had been transferred to the general fund, for all Alaskans, using a historic formula which included the above-mentioned monies as well as Permanent Fund earnings. This formula worked for 40 years until 2015, when Governor Walker and the 29th legislature, through one of the largest legislative slight-of-hand muggings in Alaska’s History (SB26), stole it. They removed a portion of the inheritance due, by law and constitution, from every Alaskan man, woman, child, and future Alaskan. They did so by changing the word “transfer” to the word “appropriation” in many parts of AS 37, thus creating a wealth tax affecting even Alaskan children who have no income.

This unconscionable robbery of their dividend was largely unnoticed by Alaskans until Walker announced the reduced dividend. There were few hearings on SB26 and the public’s input was largely ignored by the legislators, more than 50% of whom are still in office today. Does one of them represent you?

The Dividend belongs to the People. Only they should determine its use.