WE NEED 2 PFD CHECKS PER YEAR!
1. The original 1980 style PFD that would ultimately give more cash to long-term Alaska residents, than to newcomers and transients.
2. The currently used 1982 style PFD program that doles out just as much free cash to new-arrivals, transients, their kids and relatives, as it does to long-time Alasakan residents who have contributed much to our state and who have endured many Alaskan winters.
1. The original 1980 style PFD that would ultimately give more cash to long-term Alaska residents, than to newcomers and transients.
2. The currently used 1982 style PFD program that doles out just as much free cash to new-arrivals, transients, their kids and relatives, as it does to long-time Alasakan residents who have contributed much to our state and who have endured many Alaskan winters.
- Former Alaska Governor Jay Hammond (served as governor from 1974 to 1982) is said to be the father of the Permanent Fund Dividend program.
- The Legislature should enact the Hammond Bond idea which is similar to the original 1980 PFD program. This would allow us to get an extra PFD check per year.
The proposed Hammond Bond certificate (shown above) can be purchased by an adult Alaska resident for 5 dollars (if the legislature passes the program into existence).
The following year, it will mature and pay the purchaser 50 dollars. And every year thereafter, it will pay $50 for as long as the purchaser shall live (as long as he is an Alaskan resident). The Hammond Bond is not transferable to another person.
Every year, the Alaskan resident can buy an additional Hammond Bond and can therefore accumulate many, after a period of years. If he has purchased 20 Hammond Bonds over a period of 20 years, then the combined payout of those 20 bonds will be $1000 per year.
If the purchaser moves out of Alaska, the Hammond Bond will not pay. But if the purchaser moves back to Alaska, the Hammond Bond will resume paying $50 per year.
The Hammond Bond is very similar to the original 1980 PFD.
What happened to the original 1980 Permanent Fund Dividend program?
It was challenged in court by 2 newcomers (Ron and Penny Zobel) who were lawyers, who arrived in Alaska in 1978. They wanted as big of a cash handout as long-time Alaskan residents would get.
The original1980 PFD program said that the size of the PFD check would be based on a person's years of Alaskan residency - $50 for every year. So, a 20 year resident (who toiled through 20 Alaskan winters) would get $1000. But a 1-year resident (similar to the Zobels) would only get a $50 check. However, new arrivals could get a bigger and bigger PFD check with each passing year, if they were willing to tough it out and stay in Alaska.
In 1982 the U.S. Supreme Court ruled in favor of the Zobels, due to the "equal protection clause" of the 14th Amendment. This was probably a bit of a stretch to apply that clause to Alaska's PFD program, but that's what they decided, and so the PFD program had to be reworked to give as much to new arrivals who hadn't invested much time in contributing to Alaska and who didn't necessarily deserve a big cash check from the government. Thus the 1982 style PFD was enacted and is in effect to the present day.
So, the problem with the 1980 PFD program, was that it was retroactive, right out of the gate, and treated long-term Alaska residents differently than new arrivals. This made it vulnerable to an attack by sue-happy lawyers.
The Hammond Bond on the other hand is not retroactive, and instead treats everyone the same right from the very start. A 50-year Alaska resident can buy one Hammond Bond for $5, and a newly arrived 1-year Alaska resident can buy one Hammond Bond for $5. So, it should have no problem with the U.S. Supreme Court.
If the Alaska Legislature passes the proposed Hammond Bond program, citizens wil be able to get
2 PFD checks per year - the current 1982 style PFD, plus a yearly check from the Hammond Bond.
After a number of years go by, long-term Alaskan residents will start to get a bit more of the limited and precious Alaskan money, than new arrivals, which is only fair for those who have put in the time and effort to live in, and contribute to Alaska.
What did former Governor Jay Hammond say about the dividend program that he helped push through into existance?
In Jay Hammond's book "Diapering the Devil" on page 17, Hammond wrote:
One advantage of the Hammond Bond, is that its payout can never be abitrarily reduced. This is because the Hammond Bond is a "quid pro quo" contract with its terms printed right on the Hammond Bond certificate that the purchaser has bought. It has the signatures of the purchaser and the Alaska Departemnt of Revenue official written right on the bond certificate. The bond certificate also as a unique serial number. It is a "quid pro quo" binding agreement because the purchacer paid his own money for the bond in a prior year. If the state ever tries to pay less than the $50 per year per bond, then the purchaser can take the state to small claims court and win.
The 1982 style PFD on the other hand, was reduced from the 1982 "statutory amount" in 2016, because the world price of oil had crashed in 2014 and 2015 and the State of Alaska was struggling under a massive multi-billion-dollar budget deficit. The 1982 style PFD is not a "quid pro quo" agreement between purchaser and bond seller. it is instead, a legislatively approved disbursement of earnings from the Permanent Fund which can be adjusted by the legislature, so as to make sure there is adequate funding in the state budget for infrastructure and other government services for the Alaskan people.
The following year, it will mature and pay the purchaser 50 dollars. And every year thereafter, it will pay $50 for as long as the purchaser shall live (as long as he is an Alaskan resident). The Hammond Bond is not transferable to another person.
Every year, the Alaskan resident can buy an additional Hammond Bond and can therefore accumulate many, after a period of years. If he has purchased 20 Hammond Bonds over a period of 20 years, then the combined payout of those 20 bonds will be $1000 per year.
If the purchaser moves out of Alaska, the Hammond Bond will not pay. But if the purchaser moves back to Alaska, the Hammond Bond will resume paying $50 per year.
The Hammond Bond is very similar to the original 1980 PFD.
What happened to the original 1980 Permanent Fund Dividend program?
It was challenged in court by 2 newcomers (Ron and Penny Zobel) who were lawyers, who arrived in Alaska in 1978. They wanted as big of a cash handout as long-time Alaskan residents would get.
The original1980 PFD program said that the size of the PFD check would be based on a person's years of Alaskan residency - $50 for every year. So, a 20 year resident (who toiled through 20 Alaskan winters) would get $1000. But a 1-year resident (similar to the Zobels) would only get a $50 check. However, new arrivals could get a bigger and bigger PFD check with each passing year, if they were willing to tough it out and stay in Alaska.
In 1982 the U.S. Supreme Court ruled in favor of the Zobels, due to the "equal protection clause" of the 14th Amendment. This was probably a bit of a stretch to apply that clause to Alaska's PFD program, but that's what they decided, and so the PFD program had to be reworked to give as much to new arrivals who hadn't invested much time in contributing to Alaska and who didn't necessarily deserve a big cash check from the government. Thus the 1982 style PFD was enacted and is in effect to the present day.
So, the problem with the 1980 PFD program, was that it was retroactive, right out of the gate, and treated long-term Alaska residents differently than new arrivals. This made it vulnerable to an attack by sue-happy lawyers.
The Hammond Bond on the other hand is not retroactive, and instead treats everyone the same right from the very start. A 50-year Alaska resident can buy one Hammond Bond for $5, and a newly arrived 1-year Alaska resident can buy one Hammond Bond for $5. So, it should have no problem with the U.S. Supreme Court.
If the Alaska Legislature passes the proposed Hammond Bond program, citizens wil be able to get
2 PFD checks per year - the current 1982 style PFD, plus a yearly check from the Hammond Bond.
After a number of years go by, long-term Alaskan residents will start to get a bit more of the limited and precious Alaskan money, than new arrivals, which is only fair for those who have put in the time and effort to live in, and contribute to Alaska.
What did former Governor Jay Hammond say about the dividend program that he helped push through into existance?
In Jay Hammond's book "Diapering the Devil" on page 17, Hammond wrote:
| "By
issuing shares of dividend earning stock annually and allowing Alaskans
to accumulate them over time, I hoped to eliminate the magnetic
attraction for others from elsewhere who might otherwise be inclined to
flock to Alaska in order to receive dividends. Few would do so for the
mere $50 dividend per share we initially set arbitrarily, but many
might if everyone received a few thousand." |
One advantage of the Hammond Bond, is that its payout can never be abitrarily reduced. This is because the Hammond Bond is a "quid pro quo" contract with its terms printed right on the Hammond Bond certificate that the purchaser has bought. It has the signatures of the purchaser and the Alaska Departemnt of Revenue official written right on the bond certificate. The bond certificate also as a unique serial number. It is a "quid pro quo" binding agreement because the purchacer paid his own money for the bond in a prior year. If the state ever tries to pay less than the $50 per year per bond, then the purchaser can take the state to small claims court and win.
The 1982 style PFD on the other hand, was reduced from the 1982 "statutory amount" in 2016, because the world price of oil had crashed in 2014 and 2015 and the State of Alaska was struggling under a massive multi-billion-dollar budget deficit. The 1982 style PFD is not a "quid pro quo" agreement between purchaser and bond seller. it is instead, a legislatively approved disbursement of earnings from the Permanent Fund which can be adjusted by the legislature, so as to make sure there is adequate funding in the state budget for infrastructure and other government services for the Alaskan people.
**********************************************************************
The Permanent Fund Dividend should not be larger than what fits in a balanced budget.
In Alaska, we have had budget deficits every year since 2015, when the price of crude oil crashed.
We have drained down our CBR savings account (Constitutional Budget Reserve) by $12 billion dollars, to cover the continual deficits. We should have a budget that is balanced and sustainable. We should stop deficit spending.
We should not enshrine a PFD cash handout in the Alaska Constitution.
The Alaska State legislature was scheduled to go into special session in August 2021 to consider passing a bill call "SJR-6". This bill has several elements, including a poison pill which is the jamming of a guaranteed PFD cash handout into the Alaska Constitution, whether we can afford it or not. This would be a very foolish and dangerous thing to do.
(Update. It is now 2022 and the above bill (SJR-6) did not go anywhere, fortunately.)
It takes 2/3 of the legislators in each house of the state legislature (House of Representatives and Senate) to pass a proposed amendment to the Alaska Constitution. Then the proposed amendment would be voted on by the people. If a simple majority of the people (many woefully uninformed) votes to approve it, the amendment will become part of the constitution. If it is a bad amendment (such as locking PFD free cash payments into the constitution), it would be almost impossible to remove it.
The people should never be allowed to vote on giving themselves a cash handout from the state treasury. That is the job of the elected representatives, who are paid to study the budget in great detail.
Alaska is a republic, not a mobocracy.
A few Alaska state legislators, on the conservative side, have suggested that they would be willing to put the PFD into the Alaska Constitution. But it may be that they are doing so in an innocent fashion. It may be that they just want to make people happy, and plus, they want to pick up a few extra votes so as to enhance their reelection prospects. They may be unaware of the
long-term sinister consequences of locking free money handouts into the constitution. It is mostly a few behind-the-scenes, powerful left-wing operatives (outside of Alaska) who are keenly aware of the evil long-term ramifications.
The Alaska Permanent Fund was created in 1976 by the Alaska state legislature. They passed the proposed amendment to the Alaska Constitution that created the fund and then the people voted to approve it on Nov. 2, 1976.
The purpose of the Permanent Fund was to fund state government services (education, roads, troopers, etc.) in the distant future when the oil revenues ran low. There was nothing at all written in 1976 newspapers (that can be found) or in the 1976 official state election pamphlet, about giving out free cash dividend checks to the people.
The PF dividend program did not come about until 4 years later, in 1980. (A 2nd version came out in 1982.) It came about because there was a lot of surplus cash available and the flow in the oil pipeline was increasing every year.
The flow through the Trans Alaska Pipeline peaked in 1988 at 2 million barrels of oil per day.
Due to natural decline, the flow today in only about 1/4 of the peak. It is only about 500,000 BPD.
It is fine to pay a dividend to citizens, if there is surplus cash available.
Just like it is fine to disperse cheap military bunny boots, mittens and filing cabinets to American citizens if they are surplus (for instance if they are no longer up to military specifications).
Afterall, the American people own all assets of the U.S. government collectively (such as the Statue of Liberty, national parks, U.S. treasury, federal buildings, military trucks, tanks and aircraft, etc.).
But assets that are actively needed by the U.S. government should not be just freely handed out to citizens just because they are the collective owners. Otherwise, other hardworking taxpayers are going to have to cough up extra taxes to replace the items that were handed out. Or, the United States must go even deeper into debt. We already have a $28 trillion national debt and it's getting worse by the minute.
A good constitution (such as the U.S. Constitution) protects the freedoms of the people. It lists the limited powers of the central government. It also enumerates some of the inherent (God given) rights of the people, such as freedom of speech, press, assembly, right to keep and bear arms, freedom from unreasonable search and seizure, etc.
The Alaska State Constitution also enumerates these rights.
A "natural right" is an action that a person can engage in without being stopped by the government.
Examples of natural rights are:
Sometimes the word "rights" are defined in a broader sense, that is quite different than the definition of "natural rights". For example, someone like Bernie Sanders (socialist senator from Vermont) might say that a person has a "right" to (free) "healthcare". What this means is that government has the "power" to point a gun (figuratively speaking) at a taxpayer, grab extra money from him, and then use that money to pay for healthcare for the other person who is unable or unwilling to earn the money for his own health care.
Of course a person has a "natural right" to earn money and then trade that money with a willing doctor for medical services. A person also has a right to pay a periodic fee to a risk sharing company (insurance company) if that company agrees to pay for a very unlikely, but very expensive accident or illness (such as cancer).
When defining "rights" in the Bernie Sanders style of thinking, then the definition of "rights" is extra government powers. Whereas the proper definition of "natural rights" is restrictions on the excessive, overbearing or tyrannical powers of a government.
A constitution is not supposed to be a dirty laundry list of all the goodies and freebies that can be handed out to the citizens, at the expense of hard-working taxpayers. This would turn the government into an all-powerful sugar daddy. Too much welfare can destroy the work ethic of the people. It is said that handing out too much "bread and circus" led to the collapse of ancient Rome.
It's OK for the government to hand out public assistance or welfare to the truly needy to help them get back on their feet. But such payments are not a "right".
They are acts of mercy and compassion by the taxpayers. If it's turned into a "right" then the recipients will change from being grateful, to being smug and feeling entitled, as if they are owed a living and have a right to loaf.
This will lead to a deterioration of their moral fiber.
We must not lock the PFD payment checks
into the Alaska Constitution.
A national Universal Basic Income is a flawed and terrible idea because there is no surplus money. It must be financed on the backs of hard-working citizens who pay taxes.
We are being silently watched by powerful left-wing strategists outside of Alaska.
They are observing with keen interest, every move we make with the Permanent Fund dividend program. They are looking for an opening, to execute a master stroke of political action, to change the very fabric of our nation.
In Europe, there is an organization called the "Basic Income Earth Network"
("BIEN") (https://basicincome dot org).
They are advocating for a Universal Basic Income around the world.
Their website explains that a "basic income" is a "periodic cash payment unconditionally delivered to all on an individual basis, without means test or work requirement".
Their website has many articles about the Alaska Permanent Fund dividend program including:
"Alaska's Permanent Fund Dividend: The world watches anxiously".
( https://basicincome dot org/topic/alaska/page/3/ )
The Basic Income Earth Network organization ("BIEN") organizes public conferences around the world on an annual basis. BIEN has affiliations with like-minded organizations in 35 nations around the world.
BIEN's U.S. affiliate is the U.S. Basic Income Guarantee Network ( www.usbig dot net ).
The president/coordinator of USBIG is Michael Howard, a Professsor of Philosophy at the University of Maine. The left-leaning professor has published many articles including:
"Alaska's Permanent Fund Dividend: A policy ripe for export".
( https://bangordailynews dot com/2011/06/20/opinion/contributors/alaska's-permanent-fund-dividend-a-policy-ripe-for-export/ )
Dividends to stockholders of private companies
Even those who paid their hard-earned money to buy shares of stock in a company don't have a guaranteed "right" to receive a dividend. It all depends on how the company is doing and if it is making a profit (has a surplus). And even if the company is making a profit, the company may decide to invest those profits in new machinery or to pay down debts.
Some companies don't pay dividends at all, such as Amazon, Autozone, Berkshire Hathaway, Dish Network, Facebook, Netflix , etc. The stockholders make their money when the price of the stock goes up and then sell their stock.
Some companies may reduce their dividend payout due to financial troubles.
General Electric, for example, cut its dividends in half in 2017. This resulted in the GE shareholders getting a dividend cut in the amount of $4.2 billion.
The NANA Alaska native regional corporation has about 14,000 members. NANA gives an annual dividend to their shareholders. In 2015 the annual dividend was about $900 per person. But in 2016 they did not pay a dividend at all, due to economic troubles. They were able to pay a dividend in 2017. The survival and credit rating of a company is more important than giving out a fixed dividend amount.
At the Democratic presidential candidate debate on June 27, 2019 (in Maimi Florida), one of the candidates (Andrew Yang) openly proposed a Universal Basic Income for every American adult, in the amount of $1000 per month.
Time magazine indicated that Andrew Yang's idea has "drawn some suprising support" ( https://time dot com/5528621/andrew-yang-universal-basic-income/ ).
It's a terrible idea and would help destroy the work ethic of many Americans.
Pesidential candidate Andrew Yang calls it the "Freedom dividend". But like the "PF dividend" here in Alaska, it can be used as an effective lure to obtain thousands of extra votes from greedy and low information voters.
If they manage to establish a Universal Basic Income in the United States, it would probably be slipped in at a much smaller amount than $1000 per month . This would allow it to get a foot in the door. This would help in the present left-wing effort to make "healthcare", "housing", "food", etc. a "basic human right". This would help usher in socialism, or at least economic fascism (which means heavy government control of industry, but not government "ownership").
Of course , everybody already has a natural right to go out and earn money to purchase healthcare, housing and food. What the left-wingers mean by "right", is the ramped-up empowerment of the government to point a gun (figuratively speaking) at a worker's head, so as to grab his money and give it to an indolent person who knows how to vote himself a living.
Of course it is OK for the government to provide a safety net (courtesy of the taxpayers) for the aged, crippled and "down on their luck" people. But this should be an act of mercy and compassion by the taxpayers, and not a guaranteed "right" of smug able-bodied recipients.
An evil lightning spark is needed to really get the Universal Basic Income proposal into reality.
That spark can be provided by the enshrinement of the Alaska Permanent Fund dividend program into the Alaska Constitution. In so doing, a free money handout will be elevated to the lofty position of a "guaranteed basic human right".
The California state legislature passed a "Universal Basic Income" pilot program on July 15, 2021. It
will give as much as $1000 per month to some select recipients
("qualifying pregnant people" and to young adults who recently left
foster care).
The headlines read:
"California approves 1st state-funded Universal Basic Income plan".
To see article, go to the following website:
https://www.abc10 dot com/article/news/politics/california-approves-state-funded-universal-basic-income-plan/103-74d297d0-14aa-4ce1-9643-beea403c8208
Some cities, such as Stockton, California (in 2019) have experimented with UBI programs, but this is the first state program that has used the term "Universal Basic Income" which means there are no stipulations on how a recipient must spend their "income" money. Also, there are no work requirements.
This pilot program in California is fairly small ($35 million), but the former Mayor of Stockton, California, Michael Tubbs (a powerful advocate of the UBI) is excited about the new California UBI pilot program. He said: "I'm excited to see how this accelerates the movement nationally because as California goes so goes the entire nation".
But the really big boost to "accelerate the movement" to instititute the insane philosophy of paying people to breathe, will come when and if, the Alaska legislature "enshrines" a universal free cash handout" in the constitution, and turns it into a "fundamental human right".
1980 Permanent Fund dividend
In 1980, the first dividend program was passed by the legislature.
There was plenty of surplus oil money flowing into the state at the time. The amount of each PFD check was based on the years of residence in Alaska and was only to be paid to adult citizens.
Children under 18 wer not eligiable for the PFD.
Governor Jay Hammond wrote the following in his book "Diapering the Devil" on page 17:
"By issuing shares of dividend earning stock annually and allowing Alaskans to accumulate them over time, I hoped to eliminate the magnetic attraction for others from elsewhere who might otherwise be inclined to flock to Alaska in order to receive dividends. Few would do so for the mere $50 dividend per share we initially set arbitrarily, but many might if everyone received a few thousand."
Governor Hammond had a good idea that he presented in the above statement.
The Zobels sue against the 1980 PFD
Unfortunately, a couple named Ron and Penny Zobel, who had arrived in Alaska only 2 years earlier, in 1978, decided to sue to stop the 1980 dividend plan, because they did not get as many of the $50 shares as did a sourdough, who had been in Alaska for at least 20 years (who got 20 shares which would equal a $1000 PFD). The Zobels did not like the difference, where they would only get 2 shares each, which would be $100 apiece. Unfortunately, the U.S. Supreme Court sided with the Zobels.
1982 Statutory PFD formula
Then in 1982, the legislature came up with a new PFD plan where even a one-year-plus newcomer and all their kids and uncles, would get the same size PFD as what a 50-year resident would get.
The 1982 statute said that all the citizens, every year would split up 50% of the Permanent Fund's earnings (based on the average of the past 5 years). These earnings would be taken out of the Earnings Reserve Account (ERA) of the Permanent Fund. The other 50% of the earnings were then directed to be deposited into the "corpus" (principal) of the Permanent Fund for "inflation proofing".
The Alaska Constitution (in Article 9, section 15) protects the principal of the Fund (which is where "at least 25% of all mineral lease rentals, royalties, ..." are deposited) from being sucked out of the fund and spent. However, the "earnings" of the Permanent Fund are placed in the Earnings Reserve Account (ERA) of the Permanent Fund. The Alaska Constitution goes on to say (in Article 9, section 15): "All income from the permanent fund shall be deposited in the general fund unless otherwise provided by law."
In 1982, there was plenty of surplus oil money rolling in to the state, and the oil flow through the pipeline was increasing every year. So, when the 1982 PFD formula was created, it was like a delicious piece of fresh fruit. But now the revenue going to the state has declined, and the 1982 PFD formula is now badly out sync and out of date. It is like an orange that has been sitting on the shelf for too long.
It has become moldy and rotten.
New statutory PFD formula is needed
The 50% figure needs to be reduced to 1/4 of 50% which is 12.5%. The Trans Alaska Pipeline only has about 1/4 of the oil flow that it had at its peak in 1988. While this is not directly correlated with the earnings of the Permanent Fund, the flow through the pipeline has a direct correlation to the overall revenue coming into the State of Alaska.
A new hypothetical PFD fomula statute should also stipulate that the PFD may be increased to above the 12.5% base rate, if there are additional surplus funds available.
In that way, instead of the legislature debating every year, on how much to cut the PFD, to balance the budget, they could (once per year) debate on how much to increase the PFD above the base floor level (while still staying within a balanced budget). Then the citizens would not grumble that the legislature is depriving them. Instead, the citizens would be happy and grateful that the legislature was able to give a little extra bonus, above the statutory base level. This would give the people the motivation to get interested in budget issues, and to want to find efficiencies and reductions in various state programs.
Personal note by writer of this website
I sent my uncashed PFD checks back to the State of Alaska in 2015, 2016. 2017, 2018, 2019 and 2020. I did this because the state had a $4 billion budget deficit in 2015. This was caused by the crash in the price of crude oil in 2014-2015 from $109 per barrel to $27 per barrel. I did not feel comfortable pocketing the free money when the state was in such a bad financial situation. When I sent back the uncashed checks, I also sent along a letter of explanation to the Alaska Department of Revenue.
I knew I did nothing to earn this free PFD money. Someone might say this PFD money is for them taking away my deep-down subsurface mineral rights when Alaska became a state in 1959. But this does not apply to me, because I did not get to Alaska until after 1959 (I first came to Alaska in 1961, when I was 6, and I went to Nordale elementary school in Fairbanks. Then left. Back in 70-72 (Ryan and Lathrop). Back for good in 1974.)
I bought my 1-acre Fairbanks property in 1979 and did not purchase any deep-down subsurface rights, and the price I paid reflected that. So, no one took anything from me. There is no oil deep below my land anyway. I am able to get all the gravel and water (from my well) that I want from my 1-acre piece of land.
There is oil under the ground hundreds of miles north of where my 1-acre Fairbanks lot is located. But because I am a collective owner of that far-away subsurface land at Prudhoe Bay (even though I never even paid a penny to buy into it), I get free state services (road maintenance, education, troopers, court system, municipal revenue sharing, etc.), which is a tremendous benefit for me.
I am not "generous" for sending those 6 PFD checks back to the state. Because it is state money going back to the state. If I was "generous" I would send some of my own hard-earned money that I earn at my blue-collar job, to the state. But I don't want to send a penny of my own personal money. I don't want to pay a state income tax, at least not when the state has its own massive $80 billion money generating machine (The Alaska Permanent Fund).
I'm somewhat poor, and so I would like to collect the PFD like I used to from 1982 to 2014. But I need to wait until the state budget is balanced and there is a sustainable surplus. Also, I feel I should wait until the Constitutional Budget Reserve is at least partially replenished (as is supposed to happen according to the law). The legislature has made quite a few cuts during these last 6 years (mostly in the "capital budget" as opposed to the "operating budget"). I think there are even more areas where they can cut. However, the governor's attempted $130 million line-item veto cut to the University of Alaska (in 2019) was way too big and severe.
I want to be able to collect a PF "dividend" check. But it needs to be an honest "dividend" (supplied by a budget surplus, not by a deficit).
Written by Randy S. Griffin, PO Box 73653, Fairbanks, Alaska, 99707
This website first appeared on July 18, 2021.
The Permanent Fund Dividend should not be larger than what fits in a balanced budget.
In Alaska, we have had budget deficits every year since 2015, when the price of crude oil crashed.
We have drained down our CBR savings account (Constitutional Budget Reserve) by $12 billion dollars, to cover the continual deficits. We should have a budget that is balanced and sustainable. We should stop deficit spending.
We should not enshrine a PFD cash handout in the Alaska Constitution.
 |
| Political cartoon by RSG (see note #1) |
| CLICK HERE FOR SITE MAP (TABLE OF CONTENTS) |
The Alaska State legislature was scheduled to go into special session in August 2021 to consider passing a bill call "SJR-6". This bill has several elements, including a poison pill which is the jamming of a guaranteed PFD cash handout into the Alaska Constitution, whether we can afford it or not. This would be a very foolish and dangerous thing to do.
(Update. It is now 2022 and the above bill (SJR-6) did not go anywhere, fortunately.)
It takes 2/3 of the legislators in each house of the state legislature (House of Representatives and Senate) to pass a proposed amendment to the Alaska Constitution. Then the proposed amendment would be voted on by the people. If a simple majority of the people (many woefully uninformed) votes to approve it, the amendment will become part of the constitution. If it is a bad amendment (such as locking PFD free cash payments into the constitution), it would be almost impossible to remove it.
The people should never be allowed to vote on giving themselves a cash handout from the state treasury. That is the job of the elected representatives, who are paid to study the budget in great detail.
Alaska is a republic, not a mobocracy.
| Note #1. The political cartoon above, featuring the injected apple being offered to innocent Alaskans, is drawn by Randy S. Griffin, who is solely responsible for its content. I appreciate and am grateful for the iconic and historical figures and images that preceded me, which so effectively convey the contrast between good and innocence on the one hand, and dangerous evil on the other. This political cartoon has elements which make it a bit of a parody. RSG |
A few Alaska state legislators, on the conservative side, have suggested that they would be willing to put the PFD into the Alaska Constitution. But it may be that they are doing so in an innocent fashion. It may be that they just want to make people happy, and plus, they want to pick up a few extra votes so as to enhance their reelection prospects. They may be unaware of the
long-term sinister consequences of locking free money handouts into the constitution. It is mostly a few behind-the-scenes, powerful left-wing operatives (outside of Alaska) who are keenly aware of the evil long-term ramifications.
The Alaska Permanent Fund was created in 1976 by the Alaska state legislature. They passed the proposed amendment to the Alaska Constitution that created the fund and then the people voted to approve it on Nov. 2, 1976.
The purpose of the Permanent Fund was to fund state government services (education, roads, troopers, etc.) in the distant future when the oil revenues ran low. There was nothing at all written in 1976 newspapers (that can be found) or in the 1976 official state election pamphlet, about giving out free cash dividend checks to the people.
The PF dividend program did not come about until 4 years later, in 1980. (A 2nd version came out in 1982.) It came about because there was a lot of surplus cash available and the flow in the oil pipeline was increasing every year.
The flow through the Trans Alaska Pipeline peaked in 1988 at 2 million barrels of oil per day.
Due to natural decline, the flow today in only about 1/4 of the peak. It is only about 500,000 BPD.
It is fine to pay a dividend to citizens, if there is surplus cash available.
 |
Just like it is fine to disperse cheap military bunny boots, mittens and filing cabinets to American citizens if they are surplus (for instance if they are no longer up to military specifications).
Afterall, the American people own all assets of the U.S. government collectively (such as the Statue of Liberty, national parks, U.S. treasury, federal buildings, military trucks, tanks and aircraft, etc.).
But assets that are actively needed by the U.S. government should not be just freely handed out to citizens just because they are the collective owners. Otherwise, other hardworking taxpayers are going to have to cough up extra taxes to replace the items that were handed out. Or, the United States must go even deeper into debt. We already have a $28 trillion national debt and it's getting worse by the minute.
A good constitution (such as the U.S. Constitution) protects the freedoms of the people. It lists the limited powers of the central government. It also enumerates some of the inherent (God given) rights of the people, such as freedom of speech, press, assembly, right to keep and bear arms, freedom from unreasonable search and seizure, etc.
The Alaska State Constitution also enumerates these rights.
A "natural right" is an action that a person can engage in without being stopped by the government.
Examples of natural rights are:
- Speaking one's opinion, writing a pamphlet or letter about a controversial subject,
- Traveling freely; leaving the country if one wishes (people don't have a "natural right" to enter a foreign country that does not give permission, but they should at least have the natural right to leave the boundaries (or shores) of their own country without being stopped by the government of their own country.)
- Being able to own tools, land and other forms of property,
- Designing and manufacturing things such as handicrafts, clothing, tools and machines,
- Freedom of thought (there should never be "thought police"),
- Trading goods and services freely with other citizens,
- Being able to defend one's self and loved ones from criminal harm,
- Growing one's own food, and being able to keep or sell it, and be able to keep most of the "fruits of one's labor". (Some taxes may be necessary, but they should be modest).
- These are a few examples of "natural rights" (basic human freedoms) that we should all have.
Sometimes the word "rights" are defined in a broader sense, that is quite different than the definition of "natural rights". For example, someone like Bernie Sanders (socialist senator from Vermont) might say that a person has a "right" to (free) "healthcare". What this means is that government has the "power" to point a gun (figuratively speaking) at a taxpayer, grab extra money from him, and then use that money to pay for healthcare for the other person who is unable or unwilling to earn the money for his own health care.
Of course a person has a "natural right" to earn money and then trade that money with a willing doctor for medical services. A person also has a right to pay a periodic fee to a risk sharing company (insurance company) if that company agrees to pay for a very unlikely, but very expensive accident or illness (such as cancer).
When defining "rights" in the Bernie Sanders style of thinking, then the definition of "rights" is extra government powers. Whereas the proper definition of "natural rights" is restrictions on the excessive, overbearing or tyrannical powers of a government.
A constitution is not supposed to be a dirty laundry list of all the goodies and freebies that can be handed out to the citizens, at the expense of hard-working taxpayers. This would turn the government into an all-powerful sugar daddy. Too much welfare can destroy the work ethic of the people. It is said that handing out too much "bread and circus" led to the collapse of ancient Rome.
It's OK for the government to hand out public assistance or welfare to the truly needy to help them get back on their feet. But such payments are not a "right".
They are acts of mercy and compassion by the taxpayers. If it's turned into a "right" then the recipients will change from being grateful, to being smug and feeling entitled, as if they are owed a living and have a right to loaf.
This will lead to a deterioration of their moral fiber.
We must not lock the PFD payment checks
into the Alaska Constitution.
- This will ultimately cause a state income tax.
- Attract swarms of outsiders looking for a handout.
- Turn Alaska into an income-transfer-welfare state.
- Starve out needed funds for teachers, the University, troopers, crime control, snow removal, Alaska marine highway, infrastructure projects and maintenance. (It's OK to trim these public services in a responsible way, so as to increase the amount available for a higher PFD cash payment, but everything should fit within a balanced budget.)
- Could lead to the adoption of a "Universal Basic Income" on a national level, which will destroy our country as we know it.
A national Universal Basic Income is a flawed and terrible idea because there is no surplus money. It must be financed on the backs of hard-working citizens who pay taxes.
We are being silently watched by powerful left-wing strategists outside of Alaska.
They are observing with keen interest, every move we make with the Permanent Fund dividend program. They are looking for an opening, to execute a master stroke of political action, to change the very fabric of our nation.
In Europe, there is an organization called the "Basic Income Earth Network"
("BIEN") (https://basicincome dot org).
They are advocating for a Universal Basic Income around the world.
Their website explains that a "basic income" is a "periodic cash payment unconditionally delivered to all on an individual basis, without means test or work requirement".
Their website has many articles about the Alaska Permanent Fund dividend program including:
"Alaska's Permanent Fund Dividend: The world watches anxiously".
( https://basicincome dot org/topic/alaska/page/3/ )
The Basic Income Earth Network organization ("BIEN") organizes public conferences around the world on an annual basis. BIEN has affiliations with like-minded organizations in 35 nations around the world.
BIEN's U.S. affiliate is the U.S. Basic Income Guarantee Network ( www.usbig dot net ).
The president/coordinator of USBIG is Michael Howard, a Professsor of Philosophy at the University of Maine. The left-leaning professor has published many articles including:
"Alaska's Permanent Fund Dividend: A policy ripe for export".
( https://bangordailynews dot com/2011/06/20/opinion/contributors/alaska's-permanent-fund-dividend-a-policy-ripe-for-export/ )
Dividends to stockholders of private companies
Even those who paid their hard-earned money to buy shares of stock in a company don't have a guaranteed "right" to receive a dividend. It all depends on how the company is doing and if it is making a profit (has a surplus). And even if the company is making a profit, the company may decide to invest those profits in new machinery or to pay down debts.
Some companies don't pay dividends at all, such as Amazon, Autozone, Berkshire Hathaway, Dish Network, Facebook, Netflix , etc. The stockholders make their money when the price of the stock goes up and then sell their stock.
Some companies may reduce their dividend payout due to financial troubles.
General Electric, for example, cut its dividends in half in 2017. This resulted in the GE shareholders getting a dividend cut in the amount of $4.2 billion.
The NANA Alaska native regional corporation has about 14,000 members. NANA gives an annual dividend to their shareholders. In 2015 the annual dividend was about $900 per person. But in 2016 they did not pay a dividend at all, due to economic troubles. They were able to pay a dividend in 2017. The survival and credit rating of a company is more important than giving out a fixed dividend amount.
At the Democratic presidential candidate debate on June 27, 2019 (in Maimi Florida), one of the candidates (Andrew Yang) openly proposed a Universal Basic Income for every American adult, in the amount of $1000 per month.
Time magazine indicated that Andrew Yang's idea has "drawn some suprising support" ( https://time dot com/5528621/andrew-yang-universal-basic-income/ ).
It's a terrible idea and would help destroy the work ethic of many Americans.
Pesidential candidate Andrew Yang calls it the "Freedom dividend". But like the "PF dividend" here in Alaska, it can be used as an effective lure to obtain thousands of extra votes from greedy and low information voters.
If they manage to establish a Universal Basic Income in the United States, it would probably be slipped in at a much smaller amount than $1000 per month . This would allow it to get a foot in the door. This would help in the present left-wing effort to make "healthcare", "housing", "food", etc. a "basic human right". This would help usher in socialism, or at least economic fascism (which means heavy government control of industry, but not government "ownership").
Of course , everybody already has a natural right to go out and earn money to purchase healthcare, housing and food. What the left-wingers mean by "right", is the ramped-up empowerment of the government to point a gun (figuratively speaking) at a worker's head, so as to grab his money and give it to an indolent person who knows how to vote himself a living.
Of course it is OK for the government to provide a safety net (courtesy of the taxpayers) for the aged, crippled and "down on their luck" people. But this should be an act of mercy and compassion by the taxpayers, and not a guaranteed "right" of smug able-bodied recipients.
An evil lightning spark is needed to really get the Universal Basic Income proposal into reality.
That spark can be provided by the enshrinement of the Alaska Permanent Fund dividend program into the Alaska Constitution. In so doing, a free money handout will be elevated to the lofty position of a "guaranteed basic human right".
The headlines read:
"California approves 1st state-funded Universal Basic Income plan".
To see article, go to the following website:
https://www.abc10 dot com/article/news/politics/california-approves-state-funded-universal-basic-income-plan/103-74d297d0-14aa-4ce1-9643-beea403c8208
Some cities, such as Stockton, California (in 2019) have experimented with UBI programs, but this is the first state program that has used the term "Universal Basic Income" which means there are no stipulations on how a recipient must spend their "income" money. Also, there are no work requirements.
This pilot program in California is fairly small ($35 million), but the former Mayor of Stockton, California, Michael Tubbs (a powerful advocate of the UBI) is excited about the new California UBI pilot program. He said: "I'm excited to see how this accelerates the movement nationally because as California goes so goes the entire nation".
But the really big boost to "accelerate the movement" to instititute the insane philosophy of paying people to breathe, will come when and if, the Alaska legislature "enshrines" a universal free cash handout" in the constitution, and turns it into a "fundamental human right".
1980 Permanent Fund dividend
In 1980, the first dividend program was passed by the legislature.
There was plenty of surplus oil money flowing into the state at the time. The amount of each PFD check was based on the years of residence in Alaska and was only to be paid to adult citizens.
Children under 18 wer not eligiable for the PFD.
Governor Jay Hammond wrote the following in his book "Diapering the Devil" on page 17:
"By issuing shares of dividend earning stock annually and allowing Alaskans to accumulate them over time, I hoped to eliminate the magnetic attraction for others from elsewhere who might otherwise be inclined to flock to Alaska in order to receive dividends. Few would do so for the mere $50 dividend per share we initially set arbitrarily, but many might if everyone received a few thousand."
Governor Hammond had a good idea that he presented in the above statement.
The Zobels sue against the 1980 PFD
Unfortunately, a couple named Ron and Penny Zobel, who had arrived in Alaska only 2 years earlier, in 1978, decided to sue to stop the 1980 dividend plan, because they did not get as many of the $50 shares as did a sourdough, who had been in Alaska for at least 20 years (who got 20 shares which would equal a $1000 PFD). The Zobels did not like the difference, where they would only get 2 shares each, which would be $100 apiece. Unfortunately, the U.S. Supreme Court sided with the Zobels.
1982 Statutory PFD formula
Then in 1982, the legislature came up with a new PFD plan where even a one-year-plus newcomer and all their kids and uncles, would get the same size PFD as what a 50-year resident would get.
The 1982 statute said that all the citizens, every year would split up 50% of the Permanent Fund's earnings (based on the average of the past 5 years). These earnings would be taken out of the Earnings Reserve Account (ERA) of the Permanent Fund. The other 50% of the earnings were then directed to be deposited into the "corpus" (principal) of the Permanent Fund for "inflation proofing".
The Alaska Constitution (in Article 9, section 15) protects the principal of the Fund (which is where "at least 25% of all mineral lease rentals, royalties, ..." are deposited) from being sucked out of the fund and spent. However, the "earnings" of the Permanent Fund are placed in the Earnings Reserve Account (ERA) of the Permanent Fund. The Alaska Constitution goes on to say (in Article 9, section 15): "All income from the permanent fund shall be deposited in the general fund unless otherwise provided by law."
In 1982, there was plenty of surplus oil money rolling in to the state, and the oil flow through the pipeline was increasing every year. So, when the 1982 PFD formula was created, it was like a delicious piece of fresh fruit. But now the revenue going to the state has declined, and the 1982 PFD formula is now badly out sync and out of date. It is like an orange that has been sitting on the shelf for too long.
It has become moldy and rotten.
New statutory PFD formula is needed
The 50% figure needs to be reduced to 1/4 of 50% which is 12.5%. The Trans Alaska Pipeline only has about 1/4 of the oil flow that it had at its peak in 1988. While this is not directly correlated with the earnings of the Permanent Fund, the flow through the pipeline has a direct correlation to the overall revenue coming into the State of Alaska.
A new hypothetical PFD fomula statute should also stipulate that the PFD may be increased to above the 12.5% base rate, if there are additional surplus funds available.
In that way, instead of the legislature debating every year, on how much to cut the PFD, to balance the budget, they could (once per year) debate on how much to increase the PFD above the base floor level (while still staying within a balanced budget). Then the citizens would not grumble that the legislature is depriving them. Instead, the citizens would be happy and grateful that the legislature was able to give a little extra bonus, above the statutory base level. This would give the people the motivation to get interested in budget issues, and to want to find efficiencies and reductions in various state programs.
Personal note by writer of this website
I sent my uncashed PFD checks back to the State of Alaska in 2015, 2016. 2017, 2018, 2019 and 2020. I did this because the state had a $4 billion budget deficit in 2015. This was caused by the crash in the price of crude oil in 2014-2015 from $109 per barrel to $27 per barrel. I did not feel comfortable pocketing the free money when the state was in such a bad financial situation. When I sent back the uncashed checks, I also sent along a letter of explanation to the Alaska Department of Revenue.
I knew I did nothing to earn this free PFD money. Someone might say this PFD money is for them taking away my deep-down subsurface mineral rights when Alaska became a state in 1959. But this does not apply to me, because I did not get to Alaska until after 1959 (I first came to Alaska in 1961, when I was 6, and I went to Nordale elementary school in Fairbanks. Then left. Back in 70-72 (Ryan and Lathrop). Back for good in 1974.)
I bought my 1-acre Fairbanks property in 1979 and did not purchase any deep-down subsurface rights, and the price I paid reflected that. So, no one took anything from me. There is no oil deep below my land anyway. I am able to get all the gravel and water (from my well) that I want from my 1-acre piece of land.
There is oil under the ground hundreds of miles north of where my 1-acre Fairbanks lot is located. But because I am a collective owner of that far-away subsurface land at Prudhoe Bay (even though I never even paid a penny to buy into it), I get free state services (road maintenance, education, troopers, court system, municipal revenue sharing, etc.), which is a tremendous benefit for me.
I am not "generous" for sending those 6 PFD checks back to the state. Because it is state money going back to the state. If I was "generous" I would send some of my own hard-earned money that I earn at my blue-collar job, to the state. But I don't want to send a penny of my own personal money. I don't want to pay a state income tax, at least not when the state has its own massive $80 billion money generating machine (The Alaska Permanent Fund).
I'm somewhat poor, and so I would like to collect the PFD like I used to from 1982 to 2014. But I need to wait until the state budget is balanced and there is a sustainable surplus. Also, I feel I should wait until the Constitutional Budget Reserve is at least partially replenished (as is supposed to happen according to the law). The legislature has made quite a few cuts during these last 6 years (mostly in the "capital budget" as opposed to the "operating budget"). I think there are even more areas where they can cut. However, the governor's attempted $130 million line-item veto cut to the University of Alaska (in 2019) was way too big and severe.
I want to be able to collect a PF "dividend" check. But it needs to be an honest "dividend" (supplied by a budget surplus, not by a deficit).
Written by Randy S. Griffin, PO Box 73653, Fairbanks, Alaska, 99707
This website first appeared on July 18, 2021.