The Alaska Legislature is back in session and the stakes couldn't be higher. We still haven't seen a realistic budget that solves our $2.2 billion deficit. We still haven't adequately addressed our public safety issues. We still haven't seen a plan for diversifying Alaska's economy and securing our financial future. Every day I hear from Alaskans who are rightfully impatient and concerned.
As an optimist, however, I look for opportunities during these difficult times. And I believe that if we start approaching our fiscal issues by a matter of principle, not politics, we will find solutions. That is why I believe now is the time to ensure that the Permanent Fund dividend, or PFD, is a promise not only today, but to future generations. The PFD is not only a critical source of income for so many Alaska families, but also a reflection of our shared values and our common investment in our state's resources.
The PFD pulls 25,000 Alaskans out of poverty every year, reducing the statewide poverty rate by nearly a third. At the same time, economists realize that cutting the dividend, in many ways the economic engine of our state — particularly for small businesses — is one of the most harmful approaches to closing the budget deficit.
So, why now? With back-to-back billion-dollar budget deficits, exhausted state savings accounts, minimal budget cuts, and no pathway to new revenues, it has become clear that some in Juneau believe that the Permanent Fund is the state's proverbial "cookie jar." Aside from going against the spirit of what the Permanent Fund means to Alaskans, stealing from the cookie jar has not gotten Alaska closer to a sustainable fiscal future. Even after the governor and the Senate Majority supported taking more than $2,000 from every Alaskan, we are stuck in the exact same fiscal dilemma we faced three years ago.
If we want to protect the PFD, how do we get there? The only way to truly protect the dividend is through a constitutional amendment. The good news is this puts the power where it belongs — in the voters' hands, by a vote of the people.
And for those who wonder if permanently protecting the PFD can be a part of a sound, fiscal plan for the future, the answer is absolutely. In fact, I believe that the process of permanently protecting the PFD should also include a guaranteed investment in pre-K-12 education because you cannot simply cut your way to a stronger, more secure economy. If you want to grow the economy, you must make smart investments.
A part of my proposed permanent PFD protection plan, the state would allocate:
– 50 percent of the Permanent Fund annual earnings to the individual PFD. This would likely mean Alaskans would be a guaranteed a PFD between $1,500 and $1,800 each year.
– 10 percent of earnings for inflation-proofing.
– 40 percent of annual earnings to pre-K-12 education offsetting use of general funds.
To be clear, this is only about using annual earnings on the fund. The actual fund itself would remain intact and untouched — unlike many of the plans being thrown about today. Initially, the 40 percent allocated for education would not be enough to fully fund education needs on its own, but over time it could.
There is no better equalizer in any community than access to a quality education. Access to quality education provides the foundation for a strong economy and ensures a vibrant, homegrown workforce. We have the ability to start our kids on the right foot, prepare them for the future, and create a stronger economy. The reason Alaska's constitution clearly says that the state of Alaska has a responsibility to provide a basic education is because it makes sense and it is the right thing to do.
I support a constitutional amendment to permanently protect the PFD because I believe Gov. Jay Hammond was right when he explained, "Of one thing I'm sure … as go dividends, so goes the Permanent Fund. Cap, reduce, or eliminate the PFD and the fund will follow suit." We must protect the PFD today if we want to secure our future for tomorrow.
Mark Begich is a former U.S. senator and former mayor of Anchorage.
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