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Community Perspective

The unintended consequences of the PFD

Some of us “elders” can recall that satirical scene from the “Simpson’s Movie,” where Homer loses his job in Springfield and decides to move to Alaska. As he crosses the border, a guy walks up to him and hands him a thousand dollars, and says “Welcome to Alaska,” mocking the Permanent Fund Dividend. And does anybody recall that strange immigrant to Alaska, Papa Pilgrim, and his 15 offspring, camped out north of McCarthy somewhere, counting on the PFD to get him through the winter? Yes, the dividend has had some unintended consequences alright.

So here we are in 2021, deflated oil revenue, a constipated Legislature which can’t get the budget out due to the governor holding them hostage to a “full” dividend, whatever that is. More unintended consequences ... yep. Every year lately with Dunleavy’s treatment of the dividend, the legislative session turns into a sort of hostage-taking. The governor, with the help of the Senate, holds the budget hostage to his PFD proposal, and we get special sessions. This is government? What’s so special that we need a session for it? They just don’t get the job done. Not anything like Jay Hammond had in mind, for the government or the Permanent Fund.

Another movie analogy fits our situation: “Wag the Dog.” The decision and pressure on what the PFD will be drives the whole session and delays the budget because so many loud voices want their PFD to be as much as possible, regardless of what the state’s constitutional budget requirements dictate. Legislators can read that clearly: either you give me the money or you lose the next election. Many people seem to think the Permanent Fund’s highest and only purpose is to give them a payout each year. Ever heard someone call it the Permanent Dividend Fund? Gee, I wonder where they got that idea? It appears that many people think that getting a PFD is somehow their right, which is an “entitlement.” Used to be, that word was a bad word. Not so much anymore I guess.

And now, our swell governor has offered SJR6 (stands for Senate Joint Resolution 6) which is the ultimate in unintended consequences for the Permanent Fund. SJR6 attempts to put the PFD into the constitution as a mandate. Just great, huh? So the PFD is now right alongside of the education budget and the Health and Human Services budget and everything else the government is required to do, as a necessary constitutional function. (No, the PFD it isn’t there yet, but it would be if SJR6 is accepted.) I’d call that the ultimate unintended consequence of the PFD. Getting a tax free benefit of annual government services isn’t quite enough for some Alaskans. They must have a PFD too, by law. Wow. I just heard Jay Hammond shudder in his grave, all the way to Fairbanks.

Alaska is at a place now where we’ll try very hard to play out that old saying, “Anything worth doing is worth overdoing.” Please governor, and senators, just stop! Pay our bills first. Tax the oil companies a fair tax. Tax those who can pay. I don’t want to see the PFD go away, but a constitutional amendment? Here is the summary of the governor’s (awful) proposal, SJR6:

“The Governor’s idea enshrines large PFDs in the Constitution. He prevents any future Governor or Legislature to change the PFD amount, regardless of financial status of the State. The PFD becomes a ‘right’ along with civil rights and freedom of speech, religion, assembly & petition trial by jury, etc.” — From Cathy Giessel’s newsletter. 

Is this what you want, Alaska? If SJR6 does in fact become a proposed amendment to our Constitution, we Alaskans have to vote on accepting it. Nothing I have ever seen in my years in Alaska should be rejected as soundly as this proposal for the PFD. Be careful what you want Alaskans, you might just get it.

Rich Seifert is a professor emeritus of the University of Alaska Fairbanks. He lives in Fairbanks.

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