How do we save the Permanent Fund and thus the dividend that goes to every Alaska resident each year? Simple. Just leave it alone.
As it was conceived the fund will continue to provide dividends to our children and our children's children. It is a fund, not based on the price of oil but, like all funds, goes up and down like all stock investments.
As set up in 1980 the dividend will always be there unless stolen by shortsighted people. The plunderers will tell you over and over that unless you let us redo it you will lose your dividend. This is just not true. Their goal is to kill it. What we have now is a fund based on only 25 percent of the earnings of our bonus and royalty payments. The Legislature blew the other 75 percent. What makes you think lawmakers will be different this coming year than they have been in the past?
The Permanent Fund Corporation, in my opinion, has been a bit timid. When we set up the laws for the management of the fund we heeded the advice of the late Elmer Rasmuson, then president of the National Bank of Alaska. He warned that when any fund is set up you must make sure it is protected from "the thief that comes in the night." That was Elmer's way of saying "inflation." So we gave the Permanent Fund Corporation the power and the obligation to do so.
Alaska Statute 37.13.145[c] states "the corporation shall transfer from the earnings reserve account to the principal of the fund an amount sufficient to offset the effect of inflation on the principal of the fund during that fiscal year."
AS 37.13.145 (the law as it stands today) says "approximately half of the annual income of the fund is to be distributed on a per capita basis. Any income remaining after these purposes are satisfied is to be deposited in a reserve account for future dividends and inflation proofing."
Of course the Legislature can change this law but, until it does, the law as it stands is the law of the land. Of course, the fund will always be in danger during times of stress as we have faced before, and face again today.
It seems downright stupid to surrender the future for a problem of today, but it seems today's legislators are more inclined to steal from the little people than from those who fund their campaigns.
Once the Permanent Fund Corp. has declared the amount available for the dividend the Legislature must take action, for only it can appropriate state funds.
The governor's veto of a thousand dollars, if it stands, will reduce the dividend, but it does not put a penny into government coffers. For the law still stands that all funds not used for inflation or dividends are deposited in a reserve account for future dividends and inflation proofing.
The sad fact of our present system of choosing our elected officials is the cost of elections. Unless a candidate can fund his or her election, they must beg for money. Most candidates want to do a good job but whether they are backed by the Teachers Union, the Teamsters Union, the fisheries or the oil industry, to then act surprised at how they vote is a bit naive.
But, when we see those who pay federal income taxes balk at paying a state income tax but are willing to take a thousand dollars from a widow in Emmonak, and they do not hide their faces in shame, that truly amazes me.
Clem Tillion is a former Alaska state senator. He lives in Halibut Cove.
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