The Alaska Permanent Fund just posted today the June 30, 2021, year-end earnings and expenses. Our PF Trust generated total revenues in the last twelve months of $18.8 billion. Expenses were $174 million leaving a profit of $18.6 billion. Transfers in (royalty payments) amounted to $319.5 million, and transfers out (payment to the General Fund to pay government expenses and dividends) were $3.141 billion.
Our Fund balance grew from $65.9 billion last year to $81.1 this year – an increase of $14.6 billion in one year. As of year-end, we have $60.1 billion in principle and $21 billion in the Earnings Reserve account. The Earnings Reserve requires a simple majority approval for the Legislature to spend it.
But, after legislative shenanigans, our Permanent Fund Dividend for 2021 is zero.
The Legislature goes into another special session on Aug. 2. Their task, assigned by Governor Dunleavy, is to balance the budget and solve the fiscal gap. Let me be perfectly clear. The State of Alaska, according to its financial statements has – and has had – a surplus over the last several years. When Legislators decry the budget gap, they are referring to the General Fund only and ignoring the billions in earnings of the Alaska Permanent Fund Corporation.
This is a battle between the public sector who will never have enough and the private sector which has to earn enough to pay taxes.
There are three choices available to legislators in the August special session.
1. The House and the Senate majority could again cut your dividend to $525. The Governor appropriately vetoed the previous attempt, as it was designed to punish Alaskans for our greed and entitlement in demanding a full dividend. Each legislator who chose to cut your dividend, must be held to account by the people. Just record their vote and vote them out of office.
2. The House minority and Senate minority have backed the full dividend as an investment in Alaskans who can decide for themselves how to spend their money. Any Alaskan who has read any of my 16 columns over the last few years knows that we don’t have a cash problem. We have a spending problem and the way to remove the spending problem is to remove the spenders. To say we don’t have the money is preposterous.
3. Governor Dunleavy has proposed a realistic, practical compromise. Constitutional protection of the dividend at the 50/50 rate along with inflation protection and passage of a workable spending limit provides a foundation for a sustainable fiscal solution. If this Legislature can’t provide it, let’s vote for the Constitutional Convention on November 8, 2022, and do it ourselves.
A special note to the private sector. The reality is that if the Permanent Fund had not earned enough income this year, the Legislature would have raised taxes to keep spending. 70% percent of government expenses were paid by permanent fund earnings during the last fiscal year. Solving the fiscal gap must include fiscal protection for private enterprise, small business and all for-profit companies.
This is a battle between the public sector who will never have enough and the private sector which has to earn enough to pay taxes – working Alaskans and their costs of business. Perhaps the outsized earnings of the Fund this year will demonstrate to business the benefits of a protected Permanent Fund. Small businesses get that message and succeed when local stores and restaurants serve the dividend recipients. We need more of that to bring our economy back to life.
Our collective responsibility is to count a majority of specific commitments from legislators to enact our right sized dividend. We have the earnings to do that now.
Here are three steps each of us can take to solve the fiscal gap:
1. Plug into https://akleg.gov/docs/pdf/Legislators-by-District.pdf and write down the name of your District representative and senator.
2. Write or call your representative and senator to ask the question, “Will you vote for a full dividend at 50/50?” Get a yes or no and write it down.
3. Track your representative and senator’s vote. Did he or she vote for or against your family’s dividend? Vote for legislators who committed to voting for the full dividend, and then did so.
This is not a partisan battle – there are Republicans and Democrats and Independents on both sides. This is not a rural/urban battle. As incredible as it seems, even with polls showing 80% approval for full dividends, legislators can come up with more imaginative justifications to vote against their constituents’ interests.
ALASKA WATCHMAN DIRECT TO YOUR INBOX
We’re beyond the need to justify the Alaska Permanent Fund or its earnings. For legislators who disagree with our commitment to the dividend, we need to point out that they have an early retirement coming.
When I worked for U. S. Senator Ted Stevens, he taught me many things. One dictate was, “learn to count” because without that ability, the other side wins in legislative battles.
Our collective responsibility is to count a majority of specific commitments from legislators to enact our right sized dividend. We have the earnings to do that now. We have the organization, will power and resolve to deliver on those commitments. Let’s shock those who steal dividends from our grandchildren. Legislators beware. My bud, Joe Sixpack, understands this issue perfectly and will vote accordingly.