OPINION: My plan to ‘Groh’ the Permanent Fund and dividend

I feel lucky to count myself as one of many Alaskans who filed for office before the June 1 deadline. We have an opportunity to really turn things around, but we need a plan for how we’re going to do things so that we don’t just get the same old stuff.

Most importantly: We need to separate the Permanent Fund dividend and the Permanent Fund from the politicians. I propose a plan to save the Permanent Fund dividend; protect the Permanent Fund’s earnings from being blown; and generate additional revenues to maintain and strengthen critical public services while creating a more effective spending cap. This plan would end the annual confusion for Alaska families over the PFD amount, and get our economy back on track.

As a lifelong Alaskan who helped create the dividend, I know we can get this done. Working with Gov. Jay Hammond and dozens of legislators to develop the unique legislation and build a coalition for its passage was the toughest job I ever had, but also the most important. I’m running for the new North Anchorage State House seat because it’s past time to protect the Permanent Fund and the PFD from politicians, once and for all.

The Permanent Fund and the Permanent Fund dividend have helped Alaska and Alaska families in immeasurable ways. Creation of the Permanent Fund created a way to save Alaska’s oil wealth and protect it from being squandered. Distributing a portion of that wealth via the Permanent Fund dividend to all Alaskans provided a tangible economic boost to Alaska families. It also helped build a constituency to protect the fund from politics.

Much has changed since the oil boom. Now, the Permanent Fund and the dividend are at risk of being squandered and/or eliminated. Meanwhile, in the midst of an economic downturn, made worse by Alaska’s unstable fiscal system, Alaskans are hurting. Some of us are just barely surviving, not thriving. Meanwhile, politicians spin wild promises about the PFD and tinker with the formula every year, giving hard-working Alaskans no consistency and no ability to plan ahead.

The steep drop in Alaska’s oil production over the past 35 years and a failure to produce additional revenues to replace the big loss in oil taxes and royalties leaves our state with a structural deficit that soon will not be masked by the temporary war-related bump in oil prices.

Many politicians refuse to admit this reality. Some have even promised that Alaskans can forever have the combination of decent schools, roads, and public safety; jumbo dividends; and no taxes. This is at best a fantasy and at worst a cruel lie. More importantly, it’s a lie that allows politicians to distract us from holding them accountable for an economy that is falling apart on their watch.


The Permanent Fund and the dividend are at risk. There are some legislators who want to eliminate the dividend, and the Permanent Fund is only partially protected. If a majority wanted, the Legislature could spend all of the unprotected part — the Permanent Fund earnings — immediately.

I propose a three-step plan to protect and to “Groh” the PFD and the Permanent Fund for future generations of Alaskans.

• We must amend the Alaska Constitution to guarantee the dividend so that it is both sustainable and rising. As part of that amendment, we should include the percent-of-market-value, or POMV, system currently in statute to ensure that Permanent Fund earnings are spent sustainably and our investments are not spent away by politicians.

• We should raise taxes on the oil industry as part of a package to fix the structural deficit. I also support reinstating a fair broad-based tax focusing on high-income residents — more than $250,000 per year — and out-of-state workers who make their living off our resources and take the money out of Alaska.

• We should pass a constitutional amendment to create a more effective spending cap.

In addition to ensuring that taxpayer dollars are spent responsibly, this plan secures a larger dividend for the long run, prevents the politicians from overspending the Permanent Fund, and stabilizes our fiscal gap so that businesses and families can feel confident investing here. This plan will ensure that all Alaskans will thrive, not just survive, and gets the politicians out of the way.

Cliff Groh helped create the Permanent Fund dividend and had a major role in getting an oil tax bill passed that raised $2 billion in additional revenues for the state of Alaska. A lifelong Alaskan and former prosecutor, he is now running for the Alaska Legislature in House District 18, which includes all of Government Hill; almost all of Joint Base Elmendorf-Richardson, or JBER; and parts of Northeast Muldoon, Fairview, and downtown Anchorage.

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