Dead people qualify for PFDs? It's time to limit the program to those living in Alaska

Permanent Fund dividend recipients do not have to live in Alaska.

This may come as a surprise, but about 25,000 check recipients get their checks at addresses Outside, and there is a group of  "deceased applicants" who will qualify for the 2016 check of about $1,000.

With big changes coming to the Alaska Permanent Fund and the PFD, it's time to adjust the eligibility standards and redirect the program so it benefits only people who live in Alaska.

Rather than continuing to pick and choose individuals who are deemed dividend-worthy, I suggest we get rid of all 17 reasons that allow checks to go to people not in Alaska. Even the one that permits people who die in the last six months of a year to collect posthumously.

Each year, about 1,750 Alaskans die between July and December, and the rules adopted by sympathetic legislators six years ago allow for one final check in the name of the dearly departed.

[On Friday, Alaskans will find out this year's PFD amount — and what it could have been]

Last year, about $50 million went Outside to college students, military personnel who used to live in Alaska and thousands of others who were not in Alaska for a large part of the preceding year.

Ending these exceptions was politically unthinkable not long ago, but Gov. Bill Walker's $700 million dividend reduction veto will open the door to discussions that will make life uncomfortable for elected officials and their constituents.

Elected officials live to say "yes," which is how the dividend list of allowable absences and assorted PFD rules evolved over the past 35 years into a miniature 100-page version of the IRS code.

The law allows anyone who spends half a year in some other state or country to claim a dividend, a half-hearted requirement at best.

"You may be absent from Alaska in a calendar year for up to 180 days for any reason and still be eligible for a dividend," the dividend division explains in its lengthy treatise on absences.

Over the years, legislators tinkered with the list of allowable absences when approached with a powerful story or after one of numerous court decisions that challenged dividend denials and raised endless residency questions.

So the list of those who have moved away at least part of the time and can still collect dividends turned into a grab bag of exceptions, while excluding many worthy residents who are doing virtuous things Outside.

[Alaska lawmaker sues to restore full PFD after Gov. Walker's veto]

Those who join the U.S. Merchant Marine, the Peace Corps or the U.S. Olympic team, and congressional staffers who work for the Alaska delegation keep getting dividends, though they don't have to be in Alaska. So do those who get student fellowships sponsored by the U.S. Department of Education or go Outside to care for terminally ill family members.

Everyone who gets a check is supposed to be committed to returning to Alaska "indefinitely," a change from the early years of the dividend program, when the state asked residents to pledge to live here "permanently." The old language made liars out of tens of thousands of people annually.

Getting rid of all allowable absences would simplify the program and allow the state to erase the 72-hour rule:  "All persons claiming allowable absences must be physically present in Alaska for at least 72 consecutive hours at some time during the two prior years to the current dividend year."

Three days out of 730 does not make you a resident.

One of the side benefits of ending absenteeism is that it would simplify administration.

The plan to spend $650,000 on a new anti-fraud campaign, money that would have eventually gone to dividends, has a lot of merit.

It's unfortunate the Walker administration offered a no-bid contract for this work. It should have been put out to a competitive bid to avoid the appearance of inside dealing through what started as a legislative earmark in the Senate Finance Committee.

If the execution is flawed, the idea is sound. The state has long needed an aggressive fraud detection campaign, employing modern data-gathering techniques to find irregularities among 670,000 applications.

The contract is based on the assumption LexisNexis Risk Solutions will identify at least $3.25 million in dividend applications that should not be paid. "We expect the savings will be much higher than that," Sen. Pete Kelly, R-Fairbanks, said March 10 when the provision was added to the budget.

In a recent appearance in Fairbanks, former Gov. Steve Cowper recounted how he was once in a bar in Santa Barbara, California, when he overheard people in the next booth talking about how they had managed to get Permanent Fund dividend checks without ever having been to Alaska.

"Nobody is doing a thing about it (or) ever has done a thing about it. So that's something to think about too when you're sitting here trying to figure out how to keep the schools open," Cowper said.

The new dividend anti-fraud campaign, along with the uncomfortable topic of rewriting the eligibility rules, are just two small steps that may or may not be enough to keep the dividend program alive.

The bigger problem is we are on a financial course that will end the dividend entirely within a few years. Then we won't have to worry about fraud or allowable absences.

Columnist Dermot Cole can be reached at dermot@alaskadispatch.com. 

The views expressed here are the writer's and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com or click here to submit via any web browser.