I’m glad that op-ed writer Christine Robbins likened the state to a corporation, because it may be helpful in discussing the issues at hand. If Alaska is a corporation, its residents are its shareholders. Its assets (roads, buildings, parks, financial accounts) are owned, ultimately, by those shareholders. Dividends are paid to shareholders because of their ownership, but no corporation is ever contractually obligated to pay a dividend.
Dividends are not a paycheck, as paychecks are a contractual obligation and must be earned by the employee through productive work. University professors, for example, earn a paycheck. I collect a Permanent Fund dividend, which is not earned.When a corporation earns money, it can do one of two things with its earnings: distribute them directly to shareholders as a dividend, or reinvest them to strengthen its balance sheet, improve its assets, and ultimately generate more value in the future. Corporations do respond to financial challenges by downsizing — which the Legislature has agreed to do in the operating budget that it sent to the governor — but they also respond by retaining earnings rather than distributing them.
Let’s be clear: Alaska’s economy is in financial distress; it’s irresponsible to pay out shareholders while the operations of the “corporation” are on such unstable footing, while at the same time slashing the budgets of its core programs.
— Dan Miller
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