by Kate McFarland | Sep 22, 2016 | News
On Friday, September 16, Alaska senator Bill Wielechowski filed a lawsuit contesting Governor Bill Walker’s veto of half of the funding for the Permanent Fund Dividend.
Governor Bill Walker
CC BY 2.0 James Brooks
Last June, Alaska Governor Bill Walker vetoed half of the funds that the state legislature had approved for the annual payout of the Permanent Fund Dividend (PFD). This unprecedented decision caps the size of the dividend at $1000 per resident. The amount vetoed–over $666 million–is to remain in the Permanent Fund, where it may be used for future payouts.
Created in 1982, the PFD is an annual dividend paid to all Alaskan residents–both adults and children–who have resided in the state for at least one calendar year. The dividend fund is financed from the investment earnings of the Alaska Permanent Fund, a sovereign wealth fund established from the state’s oil revenue. As a universal and unconditional cash payment, the PFD has often been cited as an example of a small basic income.
Last year, the dividend reached its all-time peak amount, at $2072 per resident. The Alaskan media station KTUU has estimated that the dividend checks would have been about $2084 this year, had it not been for Walker’s veto.
However, the state has been facing a massive budget crisis–with a current deficit of about $3.2 billion–and the PFD has come under increasing threat within the past year. Governor Walker’s veto of the dividend funds was part of a total $1.29 billion in spending cuts, aimed at addressing the fiscal crisis.
At a news conference in June, following the veto, Walker said the state can no longer afford high annual dividends like the 2015 payout. Walker believes that limiting annual payouts is necessary to extend the lifespan of the Permanent Fund, as he has explained by analogy with the popular Alaskan delicacy of sourdough pancakes:
I’m a big fan of sourdough pancakes. And if we treat our Permanent Fund like we treat sourdough starter, we’ll be fine. No one would ever use up all the sourdough starter. The first thing you do is you take it out and leave it for the next batch [1].
Unsurprisingly, Walker’s veto has generated significant controversy–with some questioning its legality from the start. In the latest move, present and past state senators have attempted legal action to effectively overturn the Governor’s decision.
Senator Bill Wielechowski
CC BY-SA 4.0 Peter Stein
On Friday, September 16, senator Bill Wielechowski (Democrat), along with former senators Rick Halford and Clem Tillion (Republicans), filed a lawsuit requesting the court to demand the Permanent Fund Corporation transfer the full $1.4 billion that the legislature had originally allocated for the dividend.
According to Wielechowski, Walker’s action violates a law (Alaska Statute 37.13.145) that requires that the Permanent Fund Corporation “shall” transfer half of its available income to the Dividend Fund. Wielechowski has maintained that law demands the transfer of funds from the Permanent Fund Earnings Reserve to be automatic and not subject to decisions made in the state’s annual budget.
He previously expressed his position in a letter to Angel Rodell (dated August 10), the executive director of the Permanent Fund Corporation, in which he requested that the Permanent Fund Corporation “follow the law and immediately make [the] full transfer” of funds from the Earnings Reserve to Dividend Fund. Rodell did not respond, however, prompting Wielechowski to proceed to legal action.
The Alaska Democratic Party expressed support of Wielechowski’s lawsuit in a press released issued on September 20.
Journalist Cameron Mackintosh reports that Wielechowski has recently issued a public letter in which he reiterates his belief that Governor Walker lacked the authority to cut the PFD:
Hundreds of hours of research leads me [Wielechowski] to conclude that the Governor does not have the authority to cut Dividends in the way he proposes. The Governor cannot veto existing law. No governor can. His veto power extends only to appropriations and bills [2].
Walker promptly issued an official statement responding to the lawsuit. In the statement, Walker expresses his intent to stand by the “difficult but necessary decision–prompted by the legislature’s failure to pass a fiscal plan–to veto part of this year’s dividend appropriation”. He goes on emphasize that the decision was driven in part by the desire to preserve the PFD for future generations:
This year’s PFD is close to the historical average paid to every eligible Alaskan since 1982. It was set at a level that could be sustained as part of a larger fiscal solution–to ensure a PFD program continues for generations to come.
Walker also uses the letter to reprimand Wielechowski for failing to work towards a solution to the state’s financial crisis, contending that the lawsuit detracts from this larger issue [3].
The Governor has similarly defended his veto in a Facebook post dated September 13:
My decision to veto half of the money for this year’s dividend was a difficult one, made with painstaking forethought and consideration. Without my veto, the money that funds PFDs would be gone in just four years. Ultimately, I want Alaskans to be able to receive a PFD for years into the future, and $1,000 this year means our kids and grandkids can look forward to a similar dividend in the years to come.
It is Walker’s belief that, due to the state’s worsening fiscal crisis, it may eventually be necessary to draw money from the Permanent Fund Earnings Reserve to cover deficits–and that, thus, lower annual payouts are needed to extend the fund’s life.
Co-plaintiff Clem Tillion, in contrast, has recently written an editorial in which he contends that the best way to preserve the future of Permanent Fund (and, thus, the dividend) is to “just leave it alone” [4].
On Friday, September 23, Governor Walker will make an official announcement on the amount of the 2016 Permanent Fund Dividend. His office will also disclose the amount that the dividend would have been without the veto [5].
The first payouts will begin on October 6. The lawsuit is unlikely to be settled by this time.
Sources and Further Information:
Complaint for Declaratory and Injunctive Relief (Court document filed by Wielechowski, Halford and Tillion)
Governor Walker’s Statement on PFD Lawsuit
“Democrats Support Getting an Answer” (Press Release from Alaska Democratic Party)
Nathaniel Herz (September 16, 2016) “Alaska lawmaker sues to restore full PFD after Gov. Walker’s veto,” Alaska Dispatch News.
Cameron Mackintosh (September 16, 2016) “Sen. Wielechowski files lawsuit challenging governor’s PFD cuts,” KTUU.
Liz Raines (September 16, 2016) “Past, present lawmakers file joint lawsuit to overturn governor’s PFD cut,” KTVA Alaska.
[1] Alex DeMarban and Yereth Rosen (June 30, 2016) “ ‘Day of reckoning’: Gov. Walker vetoes hundreds of millions in spending, caps Permanent Fund dividend at $1,000,” Alaska Dispatch News.
[2] Cameron Mackintosh (September 16, 2016) “Sen. Wielechowski files lawsuit challenging governor’s PFD cuts,” KTUU.
[3] Bill Walker (September 16, 2016) “Statement on PFD Lawsuit”
[4] Clem Tillion (September 15, 2016) “Want to save the Permanent Fund and Dividend? Leave them alone,” Alaska Dispatch News.
[5] Ben Anderson (September 21, 2016) “On Friday, Alaskans will find out this year’s PFD amount — and what it could have been,” Alaska Dispatch News.
Reviewed by Asha Pond
Alaska Pipeline photo CC BY 2.0 Ryan McFarland (no relation to author)
Article originally written on September 16; edited on September 22 to include reference to the Democratic Party’s press release and the Governor’s forthcoming announcement on the PFD.
by Hilde Latour | Sep 22, 2016 | News
On the first day of International Basic Income week and just six months before the election of a new House of Representatives (“tweede kamer”) in March of next year, a debate on unconditional Basic Income was held in the Dutch parliament on September 19th. This debate was initiated by Member of Parliament Norbert Klein of the Cultural Liberal Party (Vrijzinnige Partij), who wrote a ‘note of initiative’ (“initiatiefnota”) in January this year, called “Certainly Flexible: about thinking differently about work and social security with an unconditional basic income”
Klein asked for three things:
1. The government’s reaction
The Minister of Social Affairs and Employment, Lodewijk Assher (Labour Party, PvdA), answered in writing on May 31st, that introducing a basic income is simply too expensive as the number of people paying taxes will decrease dramatically.
In addition to the economic arguments against a Basic Income, the Minister states: Having a job is more than having an income. (…) A job offers people a social network, structure in life, self esteem and personal development.” That participation in (paid) labour is good for everyone, is the broadly supported position of the Dutch government. This is what Klein refers to as a “one size fits all” policy.
In this context it is worth noting that in the current Dutch participation legislation (“participatiewet”), people are not allowed to choose the job or activities they like. The government decides which work is suitable, prohibiting many kinds and types of participation with extremely high penalties for people who participate in other activities without specific permission of the (local) government. There is very little freedom of choice and many people report to be forced into meaningless jobs. The Minister refers to this policy as “support with an activating character”.
Apparently the characterization “one size fits all” for the current policy hurts, because the minister bounces it back at Klein, by saying that a basic income is a “one size fits all” idea. He states that in case of an unconditional basic income, every citizen would receive the same income support, even if they don’t need it. He ignores the fact that the richer part of the population would be paying back most of it through taxes as was indicated by Klein in his note of initiative.
He also ignores the fact that people will regain their freedom of choice to either participate in (paid or non-paid) labour, education, caring roles or anything else that helps them create structure in their lives, build social networks, and nurture self esteem or personal development.
Furthermore, the Minister argues that European legislation might be a roadblock on the way to implementing a Basic Income in the Netherlands. However, no definite answer is given about this possible hurdle, nor is the minister referring to any specific European legislation that might stand in the way of implementing a Basic Income in The Netherlands.
During the meeting the Minister confirms he is not in favour of new research, as enough research has been done. He indicates the possibility that the House of Representatives would have to order an investigation by itself.
2. More extended research on the effect of a basic income on the state’s budget
Klein states, the research on the impact on the state’s budget done so far, has been incomplete regarding the domains in which the effect of basic income can be expected. He questions the conclusions of previous research on the effect of a Basic Income on the state’s budget and formulates a list of examples of positive side effects that were not included in the calculations (i.e. effect on health, housing market, executional costs, increased entrepreneurship and participation in labour). He asks for new research where these effects will be included.
3. A debate in the House of Representatives
During the meeting of the Committee of Social Affairs and Employment on September 19th, seven political parties of the House of Representatives of the Dutch Parliament were represented: Socialist Party (SP), Green Left (GL), Christian Democratic Appeal (CDA), People’s Party for Freedom and Democracy (VVD), Democrats 66 (D66), Labour Party (PvdA) and of course Klein / Cultural Liberal Party (Vrijzinnige Partij).
The main decision to be made during the debate: Is the House of Representatives willing to order an investigation by the Central Planning Agency (CPB) and the Socio-Cultural Planning Agency (SCP) for an explorative study on the financial / socio-economic as well as the behavioral aspects of an unconditional basic income?
The VVD is firmly against a basic income, where in the past the option was openly supported by the VVD-Minister of Economic Affairs, Gerrit Zalm. An unconditional Basic Income is an unfair solution according to the right wing-party nowadays, arguing as follows: the working part of the population pays for the people sitting at home. It is senseless, anti social and unaffordable. What if everyone chooses to do fun things instead of going to work? The effect of an unconditional Basic Income will be less participation in labour, resulting in a decrease in tax-income. We already have too many regulations that discourage people to go to work. Freedom of choice for people that is paid by others is not a dream but a nightmare. No further research is needed according to the VVD.
All other parties first have questions about the note of initiative and ask for further information. What will happen to the current social security system, what will be the cost of a basic income and how will it be financed?
In response to these questions, Klein hands out an estimate of the cost (130 billion euros) of implementing an unconditional Basic Income of 800 euros per person and a proposal of how this could be financed. He also alters his initial inclusion criterion for a basic income (living 10 years in the Netherlands) towards people with a Dutch residence permit. He emphasizes the starting point is a positive image of citizens, where most people want to participate in society in a good way. A basic Income should be seen as a springboard, not a safety net. He states that unpaid work can be as beneficial for society as paid work.
Green Left is the party most positive towards researching the effects of a Basic Income, but does not support the idea of an income guaranteed for everyone. Green Left is in favour of a looser link between work and income but wants different options to be investigated, e.g. Basic Income, negative income tax and dividend on robotics.
All parties, except the VVD, asked for a suspension of the meeting to another date to be able to study Kleins’ financial proposal. A date will be chosen during the next meeting of the committee.
To be continued…
Info and links
A report of the meeting can be found here (in Dutch)
Both letters (Klein’s note of initiative and Assher’s response) can be found here (in Dutch).
Related Basic Income News articles:
NETHERLANDS: Basic Income debated for first time in Parliament
[Hilde Latour]
THE HAGUE, NETHERLANDS: Expert Meeting on “Sense (and Nonsense) of a Basic Income”
[Florie Barnhoorn]
Special thanks to Josh Martin, and Cameron McLeod for reviewing this article.
Cover photo:
Meeting of Committee of Social Affairs and Employment – Hilde Latour 19 sep 2016
by Kate McFarland | Sep 22, 2016 | News
A debate about universal basic income was held in the House of Commons of the British Parliament on Wednesday, September 14.
A video of the debate is viewable on the Parliament website (the debate on UBI begins at 16:37), and TheyWorkForYou has a published the transcript.
Ronnie Cowan (“as in cow, as in ‘moo’”), MP from the Scottish National Party, opened the debate. Cowan has advocated for UBI in the past, such as at the SNP’s spring conference.
In his opening remarks, Cowan emphasized that the UK’s current welfare system is not working:
If we were all given a blank sheet of paper and asked to design a welfare system, nobody—but nobody—would come up with the system we have now. They would need thousands of sheets of paper and would end up with a mishmash of abandoned projects, badly implemented and half-hearted ideas and a system so complicated that it lets down those who need it the most.
Throughout the debate, Cowan advanced additional reasons to favor a UBI–as did other supporters. Notably, the discussion was joined by the Green Party’s Caroline Lucas–a long-standing proponent of UBI who, last June, tabled an Early Day Motion calling on the national government to commission and fund research on basic income. Among other concerns,
Caroline Lucas MP
CC BY 3.0 Tanoshimi
Lucas voiced worries about automation and precarity in the labor market:
Well-paid jobs on permanent contracts have dwindled, while short-term, zero-hours contracts and bogus self-employment are rife. Alongside a genuine national living wage, a basic income would provide a vital buffer against this new age of insecurity and an escape route for those caught in the trap between a complex, punitive and quite simply outdated social security system and low-paid, insecure and all too often exploitative employment.
Lucas also pointed out that basic income recognizes the value of unpaid labor:
There is far more work that needs to be done than that which is simply parcelled up into what we call jobs. We only have to look around our local communities to see railings that need painting, older people who need visiting and allotments that people would love to tend, but we cannot necessarily do many of those things—they are in some ways important economic activities—because right now we are penalised for doing so.
Other debate participants included Paul Monaghan (SNP), Eilidh Whiteford (SNP), Geraint Davies (Labour), Kate Green (Labour), Debbie Abrahams (Labour), Julian Knight (Conservative), and Damian Hinds (Conservative).
Whiteford and Abrahams both evinced some attraction to UBI, and expressed their intent to “keep an open mind”. However, they registered skepticism–or at least caution–with respect to some of the details in implementing the policy. For example, Abrahams notes that “[t]o allow for variations in need, UBI would need to be supplemented with additional top-ups, increasing its expense and complexity”, leading to the worries that a UBI might be either too costly to implement or fail to help those with greatest need.
On the opposing side, Knight and, especially, Hinds challenged Cowan on the cost of UBI and the potential for UBI to disincentivize work. Hinds stressed the virtues of the UK’s current system of universal credit in recognizing the value of work (viz., paid employment):
The Government’s approach to welfare has been about recognising the value and importance of work, making work pay and supporting people into work, while protecting the most vulnerable. A universal basic income goes against every aspect of that approach.
Basic Income UK co-ordinator Barb Jacobson welcomed the debate–the first of its kind by MPs in this generation. About critics like Knight and Hinds, she says, “Even though the Tory response was predictably negative, we know there are some MPs on that side interested in it.”
She complained, however, about what she saw as one serious omission:
[It was] a shame the MPs who supported basic income didn’t bring up the high marginal tax rates on current welfare – and on Universal Credit for that matter (was originally supposed to be around 75%, now with cuts more like 85-90%). This is the key reason any ‘benefit trap’ exists. This is something basic income eliminates because people would be taxed only on what they earn on top of it.
The Citizen’s Income Trust, BIEN’s UK affiliate, calls the debate “fair and well-informed”. However, the CIT goes on to point out that the MPs overlooked some of the CIT’s research on basic income schemes for the UK. Damian Hinds cites the CIT as concluding that a basic income would require “huge amounts of additional tax” and still create “many losers”. However, another scheme studied by the CIT “shows that an increase in Income Tax rates of only 3% would be required for a Citizen’s Income of £60 per week, that such a scheme would generate almost no losses among low income households” (as stated in the CIT’s blog post).
The House of Commons Library has published an accompanying Research Briefing. The Research Briefing contains a thorough overview of recent publications on the prospects of a UBI for Britain, including reports published in the last year by the RSA, Compass, and the Fabian Society. Additionally, it provides information about planned basic income experiments in Finland, the Dutch city of Utrecht, and the Canadian province of Ontario.
The Research Briefing clarifies that–despite the current of interest in UBI among British politicians, labor unions, and think tanks–the UK government “has not undertaken any research on Universal Basic Income proposals, and has no current plans to do so”.
More Information:
Video of the Westminster Hall debate on UBI (begins at 16:37)
Transcript of debate
Parliamentary Research Briefing on UBI
Citizen’s Income Trust blog post on the debate
Reviewed by Genevieve Shanahan
Image: “MPs Debate in House of Commons Chamber” CC BY-NC 2.0 UK Parliament
by Guest Contributor | Sep 21, 2016 | Opinion
Evidence indicates that Universal Basic Income (UBI) policies would benefit our society’s least fortunate, decreasing poverty and improving the prospects for long-term income mobility. However, one UBI critic has asserted that a basic income replacing current forms of welfare would make it harder for immigrants to become naturalized citizens of the United States because of political pressures. An excerpt from an interview journalist Megan McArdle gave to PBS News Hour:
A lot of immigrants are low-wage workers. They’re not skilled, a lot of them. They don’t have as much education as most Americans and so they never do get up to the point where they would ever pay enough in taxes to make back that check. Even if you just limited it to their children, the political support for importing people whose children will then be entitled to the same $15,000 a year as your children — I don’t think that would ever be politically viable.
So if you want to have a guaranteed minimum income, you need to shut down, pretty much effectively, shut down immigration, or at least immigration from lower skilled countries…
There are three reasons why McArdle’s conclusion, that UBI would complicate the immigration debate and necessitate an end to immigration, is very incorrect. First, naturalized immigrants are already the recipients of welfare transfers in the status quo; distributing this aid through a UBI will lower administrative costs, be less controlling, and help those in poverty more than existing welfare policies do. Second, the UBI’s political effects on immigration are largely unpredictable, but the reform could be sold to the public in a bipartisan fashion. It is not hard to imagine that UBI would have broad appeal if constituents knew it offered a simplified benefit structure, created clear incentives for legal immigration, and eliminated some of the perverse incentives embedded in current welfare policies.
Welfare policies already exist – and naturalized immigrants already participate in these programs at relatively high rates because immigrants are more likely to be low-income than the average American citizen. This is worth repeating for emphasis: naturalized are already eligible to receive social security benefits, Supplemental Security Income, food stamps, TANF benefits, and benefits from other transfer programs. This fact alone means that UBI, as a phased-in alternative to current welfare policies, would not increase the amount of money transferred to naturalized immigrants.
While it is feasible that welfare transfers to new citizens could be viewed as unpopular, the balanced approach of a UBI could help mitigate these concerns while leaving everyone better off. Policymakers who answer to constituents with negative views on immigration could effectively communicate that a UBI would reduce the total cost of welfare by reducing administrative costs. Policymakers who answer to constituents with positive views on immigration could argue aid would be given to those in need in a better way, a way that empowers new immigrants to make their own choices rather than choices dictated by the government.
Depending on implementation, a UBI policy may slightly increase or decrease aid to the families of illegal immigrants. Although immigrants illegally residing in the U.S. are generally ineligible to receive welfare, illegal immigrants are permitted to apply to receive food stamps on their children’s behalf. A UBI equal to the value of the food stamps the family would have otherwise received should be the preferred policy. Various states already have their own forms of supplementary assistance for illegal immigrants in addition to food stamps: these states could bridge any perceived gaps by offering the same assistance they do now.
Lawful, non-citizen residents, such as students, exchange visitors and foreign workers, are eligible for certain welfare transfers depending on their circumstances. Current laws also require waiting periods and point systems for noncitizens to become eligible for Supplemental Security Income (SSI) transfers. These rules could be maintained to alleviate concerns that noncitizens would take advantage of the UBI: as it stands now, non-citizens receive substantially less welfare transfers than their citizen counterparts. Essentially, a UBI would end up looking very similar to the SSI – the general idea would be to have fewer onerous requirements on how welfare dollars are spent.
The political implications of UBI implementation are nearly impossible to predict, especially in the context of immigration. For example, even though illegal immigration has been falling over the last decade, voter concern is relatively high. Additional demographic changes will likely change the political realities surrounding immigration reform and welfare policies.
It is also unlikely that a UBI would drastically change the rate of naturalization or where non-citizens choose to call home. After all, research shows that welfare spending does not have large effect on immigrants’ decisions on where to live (the biggest factor appears to be economic opportunity). It also appears that citizenship fees are a bigger factor in determining whether immigrants will pursue naturalization than welfare is.
It is clear that UBI would not lead to the cataclysmic outcomes McArdle expects: we would have already seen those consequences with current welfare policies. A UBI would just improve the existing system.
About the author:
James Davis is an undergraduate at Columbia University studying Economics and History.
by Denis Flinn | Sep 19, 2016 | News
The Revenu de base Québec group is hosting several events for International Basic Income Week: September 19-25, 2016 in Québec, Canada.
Starting Monday, September 19, there will be events in both Quebec City and Montreal, with the week culminating in a non-partisan Forum of Ideas highlighting basic income (that we have already written about here). Events include:
Temiscula: September 19 from 5:00pm to 7:30pm,
Conference: “A basic income please”
At: 612 Avenue Principale, Dégelis, Québec
Quebec: September 20 from 7:00pm to 9:00pm,
A cine-talk on the topic of basic income
At: L’Accorderie; 151A, rue Saint-François Est, Québec
Montreal: September 21 at 12:15pm,
Jurgen de Wispelaere lecture: “Basic Income and the Exit Fallacy (or Keeping it Real in Theory and Practice)”
At: University of Montreal
Montreal: September 21 at 6:30pm,
A cine-talk on the topic of basic income
At: 2000 boulevard Saint-Joseph Est, Montreal
Montreal: September 22 at 6:00pm,
A discussion of basic income at Le Sainte Elisabeth pub
At: 1412 Rue Sainte Elisabeth, Montreal
Montreal:
September 23 – 6:00pm to 9:30pm
September 24 – 8:00am to 5:00pm
September 25 – 8:00am to 11:15am
Forum of ideas for Quebec – Various topics
More details on all of these events can be found here or visit the website or Facebook Page for the group.
