Skip to main Content

Who owns Alaska? Not you. Our wealth was meant to share

  • Author: Charles Wohlforth
    | Opinion
  • Updated: August 10, 2016
  • Published August 10, 2016

Applicants for Permanent Fund dividends line up before the filing deadline on March 31, 2015 in Anchorage. (Bill Roth / Alaska Dispatch News)

Who owns Alaska's resource wealth? That's the basic question that divides us now as we debate the purpose of the Alaska Permanent Fund.

Gov. Jay Hammond, the father of the fund, believed Alaska's resources belong to us as individuals.

Gov. Walter Hickel, who helped found the state and its owner philosophy, believed the wealth belonged to us in common for common purposes.

These two points of view weave through Alaska history and into our current debate. Arguing against someone from the other camp can feel like sparring over evolution.

But the truth is not a matter of opinion. Although laws and traditions can always be changed, the weight of historical evidence backs Hickel's side, with those who want to use the fund's earnings today for government purposes.

I spent a lot of time talking to both these wise and interesting men in their later years, but more time with Hickel, who I helped write a book on his owner state idea, "Crisis in the Commons: The Alaska Solution."

Hickel rose from the streets, where he begged for meals and washed up at a fire hydrant, to be one of Alaska's wealthiest men, governor twice, and U.S. Secretary of the Interior.

He often told the story of his realization, during the statehood movement, that Alaska could not build its economy on the wealth of individuals coming from oil, gas and coal. He had hoped a new state would privatize land and ultimately create oil millionaires like his Uncle Emil, back home, who found a gusher on his property.

In the late 1940s, a friend told Hickel it wouldn't work that way here. The Mineral Leasing Act of 1920, pushed through based on the progressive ideals of President Theodore Roosevelt, established that subsurface wealth would no longer be given away, but would be leased, with the benefit going to the public through government.

Statehood's founders grasped this public ownership as the basis for Alaska's future. It was obvious in territorial days — and has remained so to this day — Alaska was too big and sparsely populated to pay for government solely from taxes on its citizens. Boosters, including Hickel, sold Alaska statehood to the nation with the promise resource wealth would pay for our government.

The Statehood Act passed by Congress and signed by President Dwight Eisenhower makes that ownership philosophy perfectly clear.

The act granted the new state of Alaska 103 million acres of land, but only conditionally. Alaska could lease the subsurface resources, getting money from oil producers through royalties and taxes, but if the state ever tried to sell or give away the subsurface, the land would revert to the federal government.

Hammond opposed statehood and spent much of his career fighting for an opposite version of resource ownership, conceiving of citizens as shareholders with individual ownership rights, like shareholders in a corporation. He thought individuals could use oil money best, with the government taxing back what voters were willing to pay for services.

Underneath Hammond and Hickel's philosophical difference lay opposite visions for Alaska's future.

Hammond, a conservationist, saw danger in the state having access to too much money, fearing it would be spent on development projects that would change the culture of self-sufficiency that he loved, and would move the state's center of gravity from rural to urban (and he was right about that).

Hickel, a full-speed-ahead developer, dreamed of exactly the future that Hammond dreaded, one with big glass buildings and divided highways, modern American comforts, and world-class facilities only a well-funded government could provide. He supported statehood but opposed Hammond's later idea for a Permanent Fund dividend.

Hammond was our Jeffersonian, with Thomas Jefferson's belief in the strength of rural people, agriculture and the importance of keeping power in communities. Spreading the wealth would keep Alaska simple.

Hickel was our Hamiltonian, with Alexander Hamilton's vision of building a centralized society of dynamism and competitiveness. Concentrating the wealth would make Alaska powerful.

I've always admired Jefferson. The Alaska of Hammond's dream is the one that I love.

But I have to admit Hickel was right about the nature of the wealth given to us. Alaska received it collectively for collective purposes. The dividend has been a good thing, but we don't deserve it as owners.

"Wally Hickel likes to refer to Alaska as an 'Owner State,'" Hammond once wrote. "I prefer to term Alaskans as an 'Owner People' to reflect our constitutionally mandated public, rather than state, resource ownership."

Hammond tried to enact this idea with a Permanent Fund dividend that would be paid out based on how long a person had lived in Alaska since statehood came in 1959. The 1980 dividend law explained shares would compensate "each state resident for equitable ownership of the state's natural resources since the date of statehood."

If that law had survived, an old-timer today would be receiving dividends 57 times larger than a newcomer's. But in 1982, the U.S. Supreme Court struck down Hammond's plan as a violation of the U.S. Constitution, which says all citizens must be treated equally by the government.

The Legislature then created the dividend we have, with equal dividends after a year of residency. The words about ownership were removed from the law.

As Americans, we should be treated equally in receiving government services. But that doesn't mean getting off a plane gives you equal ownership with an Alaska Native or a dedicated lifelong citizen. The dividend simply does not represent ownership.

Hammond lost this fight at statehood. The winners, founders including Hickel, asked for and received collective wealth from Congress—with the condition  it must always remain collective.

We can use some of that for dividends, if we choose, and I support that. But no one can claim an ownership right to a dividend more important than spending this wealth on education, health, public safety and all the other needs of those investing their lives here—the future Alaskans who are the state's ultimate owners.

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(at)alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com or click here to submit via any web browser.

Local news matters.

Support independent, local journalism in Alaska.

Comments