Originally published in Make A Scene Magazine, Jan 21, 2020.
There is a misunderstanding among some of our legislators regarding the definition and purpose of a “dividend.” It’s apparent that many lawmakers, and some Alaskans, have either forgotten why we have a Permanent Fund Dividend, or forgotten why it was instituted in the first place. There’s a further disconnect in the basic understanding how a dividend encourages the permanence of the Permanent Fund.
Merriam-Webster defines dividend as “an individual share of something distributed such as a share in a pro-rata distribution (as for profits) to stockholders. Profits are distributed to shareholders as dividends.”
The Dividend from the Permanent Fund (the PFD) was never intended to be welfare, which is apparently where it currently resides as a line-item in the state budget. In addition to providing a bit of money back for our co-ownership of the states mineral wealth, just like any dividend, it was also a means for the shareholders – the residents of Alaska in this case – to monitor the management, or mismanagement, of our Permanent Fund.
Senator Giessel is correct when she says that a dividend was not the original intent of the Permanent Fund. The Permanent Fund itself was set up to pay for State government when oil ran out. It is a mistake, however, to say there is no constitutional right to the PFD.
The Permanent Fund by design is itself constitutional. The Dividend is a voter-approved byproduct of that constitutional legislation – one that ties Alaskan’s to THEIR Permanent Fund. Because we voted to create the PFD, a vote is required to amend the formula, to terminate it completely, or even to send some of it to communities for their use. Currently the formula, as applied, and the “appropriation,” is in violation of the Constitution of the State of Alaska as well as the will of the people. Since it was such a huge material change to the PFD, the people should have been allowed to vote on SB26 which changed the formula as well as changing the Dividend from a mere budgetary “transfer” to an appropriation…Read More…