Opinions

OPINION: The Legislature shouldn’t cash out Alaska’s future

It’s not often you hear political debates that invoke religion and booze but have nothing to do with temperance, the social ills of alcohol or strict adherence to church teachings.

In Alaska, those invocations are being offered in the context of the state budget and oil prices — both of which are similar to alcohol and religion in the 49th state, and they can be just as debatable and divisive.

High oil prices of recent months — and even higher in recent days, after Russia’s unprovoked invasion of Ukraine — have made Alaska rich again, for now. The state treasury hasn’t enjoyed the tax and royalty deposits of oil at $90-$100 per barrel in almost eight years. Alaskans, and their elected officials, are back to debating how to spend the riches rather than arguing what services to cut, as was the budget routine of the past several lean years.

Of course, all that money is pouring more oil on the burning argument over how high the state can — should — go in spending money on services, and how high the Legislature can — should — go in appropriating a larger Permanent Fund dividend.

Some advocate for writing checks on the high oil revenues almost immediately, particularly to boost this year’s PFD into the $2,500 range or higher, as proposed by Gov. Mike Dunleavy, who is running for reelection on the Large Dividend Ticket.

Others, however, argue for a dividend certainly above last year’s $1,114 but less than the governor wants, saying it’s best to preserve the Permanent Fund during a losing stock market and save some of this year’s windfall for next year and the next year, when oil prices invariably go down, which they always do.

This week’s House majority proposal to pay out some of the oil money as a special one-time “energy relief check” avoids overdrawing on Permanent Fund earnings to cover the payments, and is a tidy solution to this year’s desire to share the wealth with Alaskans. It does not, however, end the annual debate over the dividend formula, which makes it a political compromise — smart, but a temporary solution.

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Looking longer term, Senate Finance Committee members last week considered legislation to set a new formula in state law for determining the amount of the annual PFD.

Anchorage Sen. Natasha von Imhof was among those who said banking on high oil prices and putting larger dividends into law is a bad idea. “Just like you don’t build a church for attendance on Christmas and Easter, you don’t pass a dividend bill based on $90 oil. … We need to find something that’s sustainable and affordable over time.”

Senate Finance co-chair Bert Stedman, of Sitka, did not invoke the church but nonetheless channeled his own equivalent of scripture and verse: Do not cast into law an unaffordable, unsustainable dividend, no matter how politically popular it might be.

Among House Finance Committee members, Fairbanks Rep. Adam Wool was quoted last week by the Anchorage Daily News: “I personally would rather not be like drunken sailors and give a big fat PFD, like, ‘Woohoo, we can do this now,’ because I just don’t think it’s good policy.”

Calling in from Dillingham to testify in support of large dividends in law, Magnus Sampson asked the Senate Finance Committee on Feb. 21: “We’ve been calling and calling and calling for the past how many years now? Do you guys listen? Or do you guys have cotton swabs in your ears?”

No, not cotton swabs. But hopefully enough legislators have the common sense not to overdraw on Alaskans’ future by overspending on an excessive dividend formula, beyond a moderate energy relief check intended to help individuals cope with high fuel prices.

No need to drink to that or pray for it, just hope lawmakers think longer term than today’s oil prices.

Larry Persily is a longtime Alaska journalist, with breaks for federal, state and municipal service in oil and gas, taxes and fiscal policy work. He is currently owner and editor of the weekly Wrangell Sentinel newspaper.

The views expressed here are the writer’s and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.

Larry Persily

Larry Persily is a longtime Alaska journalist, with breaks for federal, state and municipal service in oil and gas, taxes and fiscal policy work. He currently is publisher of the Wrangell Sentinel weekly newspaper.

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