PFD needs to be put into constitution

After all, the Permanent Fund itself is in the constitution as is a "Budget Reserve Fund." Nobody seems to be complaining about proposals that a hefty percentage of the PF should go to K-12 education or higher education -- even though such dedications would back out regularly appropriated funds. Nor are there outraged complaints to proposals that would reinvest part of the fund against inflation, through the constitution.

So it's OK to fiddle with the fund for some purposes but not others.

One hears on the street that outsiders are flocking to the state to take advantage of the PFD (though there is no data to support this notion).

But this could be a problem if the fund grows and grows and the dividend with it.

A constitutional PFD could include a cap, probably with an inflation adjustment. Shouldn't all the people get a chance to vote on what that cap might be?

Why do we have things in the constitution? One reason is that we don't trust the Legislature, particularly when its self-interest is involved.

Many legislators would surely love to get their hands on PFD money so they could appropriate it according to the directions of their favorite lobbyists.

Yes, there might come a time when funds dedicated to the PFD should be available for legislative allocation. The fund was set up originally because of general recognition that too much money was coming in at once. At the same time, based on the fiscal ups and downs of state history, there was general acknowledgment that the fund could be a "rainy day" fund. The later-established and much smaller Budget Reserve Fund is a rainy day fund with criteria. But no rainy day criteria were set for the Permanent Fund. This is another item that the people should have a direct say on. When is it raining so hard that the dividend should be cut?

Former Gov. Wally Hickel has been right in regularly reminding us that Alaska is an "owner state." Who owns the resources of Alaska? Why, the people do. In general, people with money are not friends of the PFD because the sum is trivial to them personally, and without a PFD, there would be more money, serious money, for tax relief which is a special burden (but deserved for those on whom fortune has shined) of the wealthy. That's why the U.S. Constitution was amended to provide for a graduated income tax.

Most Alaska oil wealth already goes to tax relief. The Permanent Fund gets only 25 percent of royalties. Seventy-five percent of royalties and all oil tax revenues go to the Treasury. Cut or abolish the dividend, and the money would then go only to taxpayers. And the most would go to the biggest taxpayers. This sets up a transfer of wealth from the poorest 90 percent to the richest 10 percent. The PFD needs constitutional protection.

It seems unlikely that the Legislature will propose to the people constitutional protection for the Permanent Fund dividend. But with a proposal for a constitutional convention on the ballot in 2012, there are sound reasons why the Permanent Fund and its dividend program should receive attention as the people decide whether parts of Alaska's constitution deserve a fresh look.

There are pros and cons to a constitutional convention. Conservatives are afraid that liberals will turn it into a socialist document and liberals are afraid that conservatives will turn it into a fascist document. But maybe the people can be trusted. When we are closer to the vote that the delegates in 1955-56 mandated -- "shall there be a constitutional convention?" -- the PFD question will have more urgency as it relates to how to answer that question.

In the meantime, since quite a fuss has been made over sticking the PFD in the constitution, this and other amendment proposals are ripe for discussion.

John Havelock is a former Alaska attorney general.