ALASKA, USA: New poll shows declining support for the Alaska Dividend

A recent poll asking Alaskans how to deal with the state’s increasingly severe budget deficit found that trimming the Permanent Fund Dividend or PFD (also know as “the Alaska Dividend”) was the most popular solution. The poll also found that a second strategy for trimming the dividend was third in popularity.

-Alaska Dispatch News

-Alaska Dispatch News

The Alaska dividend is the closest program to a basic income in the world today. Each year it pays out a dividend, usually between $1000 and $2000 per year, financed out of the returns from the Alaska Permanent Fund or APF—a savings portfolio of more than $50 billion accumulated from past state oil revenue. Its enormous popularity earned it the nickname of “the third rail of Alaskan politics,” meaning that any politician who touched it died.

This poll might be an indication that the dividend is losing that status in the face of Alaska’s financial situation, which is deteriorating because of the state’s dependence on oil revenues. The state has no sales or income tax. The vast majority of its revenue comes from taxes, fees, and royalties on the state’s oil exports. Not only have oil prices declined by more than 50 percent since 2014, but the amount of oil exported from Alaska has been declining significantly for years. The state is quickly running through the savings it built up in good years, and it is faced with the situation in which it must either make deep cuts in spending or seek new revenue.

Asking Alaskans to respond to several strategies of dealing with this issue, the Rasmuson Foundation found the following:

  • 66% of Alaskans agreed with “Using a portion of excess earning from the Permanent Fund to fund public services and programs while protecting the dividend program.” 27% opposed.
  • 57% agreed with “Introducing a statewide sales tax.” 41% opposed.
  • 55% agreed with “Putting a cap on the yearly amount of Permanent Fund dividends.” 41% opposed.
  • 54% agreed with “Reducing oil development tax credits offered by the state.” 32% opposed.
  • 41% agreed with “Introducing a state personal income tax.” 55% opposed.
  • 16% agreed with “Making deep funding cuts to essential public services like schools, police, health care, and roads.” 16% opposed.

The first option might not sound like a cut in the dividend, but it is. There are no “excess earnings” in the PDF. Every dollar the PDF receives in returns either goes to spending or to generating more returns and higher dividends in all the years to come. Any strategy that defines some returns as “excess” and diverts those to other spending, necessarily means lower dividends in the future. This opinion protects the existence of the dividend, but it does not protect its future growth or even its current level. If any significant amount is taken in “excess earnings,” it will slow the growth of the dividend in the future, and it might even create negative future growth in the dividend.

The poll did not ask people whether they would support eliminating the dividend entirely, but over time either of the two strategies suggested would lead to significantly smaller dividends than what would otherwise occur.

The poll also did not ask about spending the principal of the PFD, which is constitutionally protected. The legislature would need a constitutional amendment to spend down the $52 billion fund, but with a simple majority vote, it could cancel the dividend and use that money to finance state spending. Before the recent fiscal crisis, such a strategy was politically untenable, but the poll shows that movement in that direction might have become politically tenable.

The poll results suggest that Alaskans might view the dividend as a luxury to be distributed as long as the state is booming. If so, it is very different than how most basic income supporters view it: as an essential tool to promote social justice and an important way to show solidarity with economically disadvantaged individuals. Whether this or any other view of the dividend is strong enough to project it during Alaska’s fiscal crisis remains to be seen.

For more information see:

Alex DeMarban, “Poll: Alaskans prefer new revenue over deep cuts, including tapping Permanent Fund.Alaska Dispatch News, August 13, 2015.

The Rasmuson Foundation, “Alaska Attitude Survey On The State Fiscal Climate.” The Rasmuson Foundation, Conducted July 13 – 21, 2015

Representative Wes Keller, “My Turn: Don’t be snookered, ther’es no ‘free ride.’The Juneau Empire. August 20, 2015

Rep Les Gara, “My Turn: Open discussion needed on oil taxation.” The Juneau Empire. August 19, 2015.

NOTE: The paragraph beginning, “The first option might not sound like a cut…” was added after this article was first posted in response to questions from readers.

Karl Widerquist

About Karl Widerquist

Karl Widerquist has written 874 articles.

Karl Widerquist is an Associate Professor at SFS-Qatar, Georgetown University. He specializes in political philosophy. His research is mostly in the area of distributive justice—the ethics of who has what. He holds two doctorates—one in Political Theory form Oxford University (2006) and one in Economics from the City University of New York (1996). Before coming to Georgetown he was lecturer in Political Theory at the University of Reading (UK) and a Murphy Fellow at Tulane University in New Orleans (LA). He has written or edited six books. He is the author of "Independence, propertylessness, and Basic Income: A Theory of Freedom as the Power to Say No" (Palgrave Macmillan 2013). He is coauthor of "Economics for Social Workers" (Columbia University Press 2002). He is coeditor of "Basic Income: An Anthology of Contemporary Research" (Wiley-Blackwell 2013), "Alaska’s Permanent Fund Dividend: Examining its Suitability as a Model" (Palgrave Macmillan 2012), "Exporting the Alaska Model: Adapting the Permanent Fund Dividend for Reform around the World" (Palgrave Macmillan 2012), and "the Ethics and Economics of the Basic Income Guarantee" (Ashgate 2005). He is currently under contract to author or coauthor two more books: "Prehistoric Myths in Modern Political Philosophy" (Edinburgh University Press 2014) and Justice as the Pursuit of Accord (Palgrave Macmillan 2015). He was a founding editor of the journal Basic Income Studies. He edited the USBIG NewsFlash for 15 years and the BIEN NewsFlash for five years. He is one of the founding editors of Basic Income News on the basicincome.org website. He has published more than a twenty scholarly articles and book chapters. His articles have appeared in journals such as Political Studies; the Eastern Economic Journal; Politics and Society; and Politics, Philosophy, and Economics.

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2 comments

  • Russ morris

    Why isn’t there more talk about ” how the money system works” like I read about on the Positivemoney. Org site?
    In order to open the thought process to something outside “budget cuts and adjustments” as like there is some kind of limited amount of “money or funds” out there available.
    What about adjusting the equation in which our global money system operates like plugging in the basic income to make the equation balanced.
    As it is :
    Life – work. =. Profit

    As it is with basic income added :
    Basic income +. Work. =. Life
    I realize that it is a BIG. jump
    But it helps to turn the wheels of thinking in order to support this people’s movement of
    Basic living income in a stronger way.
    The ones who believe in people will be left with us. I ask my self ” do I believe in people?”
    Yes. I support the basic income

  • “The poll results suggest that Alaskans might view the dividend as a luxury to be distributed as long as the state is booming. If so, it is very different than how most basic income supporters view it: as an essential tool to promote social justice and an important way to show solidarity with economically disadvantaged individuals. ”
    We always knew Alaska never went through the culture shift which is necessary because they never had to balance the BI with taxation. I doubt whether Alaska is capable of that culture shift, so there is a serious possibility that it will wither on the vine there, but the effects (the Gini coefficient) whilst is has lasted cannot be erased from history.
    With the possible exception of Alexander De Roo, I appear to be the only BIEN member who has ever deviated from a single-minded concern about inequality. Whilst I thoroughly approve of that, my initial, and still prime reason for the BI is on ecological grounds. ‘Limits to Growth’ forecast in 1970 that resource shortages and pollution would eventually inhibit economic activity. The Green Party was founded on the premiss that a mechanism was needed which would allow a recession to be a policy option acceptable to whole populations, rather than wait for the accidents which have always happened in the past.
    The Green Party is as big a disappointment as BIEN. It veered off and became a socialist party. but I remained an activist. I prefer to work in well heeled areas where people do worry about a planet fit for their grandchildren. I don’t mention the BI, it would take too long on each doorstep. I say:
    “We can’t promise we can save the planet, but we can be sure it will cost the better off more in taxation. A sustainable society will be much less unequal”
    At least 60% of those who had no intention of voting Green, and judging by their possessions would lose if there were to be less inequality, must have done so.
    So I believe that the culture change IS possible, but only if the BI movement starts to think ecologically, and we need that to happen before he demise of the Alaska PDF is held as evidence that the principle is a failure.

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