News-Miner opinion: A great debate engulfed Alaskans 20 years ago: Had the time finally arrived for a portion of the Alaska Permanent Fund’s earnings to be used to help pay the cost of running the government?
Alaskans resoundingly — 83.25%-16.75% — rejected the idea in a statewide advisory vote.
That was in September 1999. Alaskans’ views have evolved since then, resulting in the Legislature and former Gov. Bill Walker approving legislation that does exactly what Alaskans had opposed nearly two decades prior: Using some of the permanent fund earnings to help pay for the operation of government.
In 1999, the state government needed money. Oil prices were at about $5 per barrel at the start of the year, less than half of what they had been for the previous few years.
At the center of the debate at the time sat the dividend itself. The annual payment to Alaskans shaped the fiscal plan that had been put forward by then-Gov. Tony Knowles and key legislators.
The question on the ballot for the special advisory vote of Sept. 17, 1999, was simple though the fiscal problem confronting the state was complex:
“After paying annual dividends to residents and inflation-proofing the permanent fund, should a portion of permanent fund investment earnings be used to help balance the state budget?”
The ballot included a lengthy explanation of what would happen if voters approved of the idea. The opening paragraph laid out the situation:
“The people of Alaska created the Alaska Permanent Fund to save a portion of Alaska’s petroleum revenue for the future. After investing those savings, the original intent and purpose was to use the earnings from those investments when Alaska’s petroleum revenues declined. Petroleum revenues have now declined substantially and are forecast to continue to decline. Our reliance upon declining oil production and volatile oil prices constitutes an unsustainable state budget system. The governor and state legislature seek the public’s judgment regarding a stable and sustainable long-term balanced budget plan.”
Alaskans then went to the polls and told Gov. Knowles and the plan’s supporters in the Legislature to stuff it.
Today, in 2019, Alaskans again are facing a great debate about the dividend. The state again is short of money, as it has been for the past few years. The question now is this: Can Alaska afford the expected $3,000 dividend that the statutory formula calls for? Or should it again be reduced, as it has been for the past three years as part of the spending cuts necessary because of reduced oil revenue?
This time, as Alaskans wait to see what the Legislature and Gov. Mike Dunleavy ultimately agree to for the dividend, the feeling among Alaskans seems to be different. Alaskans, having lived through several cycles of budget cuts since 1999, appear more receptive to using the fund’s earnings to pay for government.
Alaska cannot afford a $3,000 dividend now. It makes little sense to make massive budget cuts, as Gov. Dunleavy has proposed, while spending $1.9 billion to pay out the large dividend. Many Alaskans across the state have made that point clear at town hall meetings and in other ways.
Nearly 20 years ago, on Sept. 1, 1999, the Daily News-Miner, public radio and television station KUAC and television station KTVF presented a panel discussion at Pioneer Park — it was called Alaskaland back then — that featured Gov. Knowles, former Gov. Jay Hammond, House Speaker Brian Porter, of Anchorage, and Sen. Rick Halford, of Chugiak, to debate the permanent fund proposal and answer questions from the audience that packed the park’s Civic Center and from residents who sent them in by email. The event was broadcast live on television and radio.
The event was called “Crossroads: The Alaska Permanent Fund vote.”
It was a fitting name then and is again today. Alaska is again at a crossroads with this big question facing its residents: Where does the permanent fund dividend fit among our priorities?