by Karl Widerquist | Aug 6, 2015 | News, The Indepentarian
Alaska’s Permanent Fund Dividend (PFD)–the closest policy to Basic Income existing in the world today–could reach over $2000 this year, but it remains under threat as Alaskan politicians seek ways to close the budget deficit.
According to KTUU TV, Bill Popp, the head of the Anchorage Economic Development Corporation predicted that this year’s PFD will reach $2,000. The PFD varies each year because it is financed by an investment fund owned by the state. It is paid each year to every Alaskan U.S. citizen who fills out a form verifying their residency in the state. Last year the PDF was $1884. A payout of $2000 would be close to the record high dividend of $2,069.00 of 2008. It will still be far below 2008’s full payment, which included a $1200 supplement from the state’s budget surplus that year.
Alaska’s Dividend is so popular that recent editorials have suggested linking the PFD application to voter registration to encourage more people to vote. However, it is under attack because declining oil exports coupled with declining oil prices have created a large budget deficit. This budget pressure does not directly affect the PFD because it is financed by its own dedicated investment fund of more than $50 billion. However, politicians have increasingly been talking about redirect money from that fund to the regular state budget to help close the deficit. One recent editorial suggests capping the dividend at $1000 and using the rest of the money for the regular state budget.
For more information see:
Kortnie Horazdovsky, “2015 Permanent Fund Dividend could hit $2000, AEDC says,” KTUU-TV, Jul 29, 2015
Dermot Cole, “Linking voter registration to PFD would create fundamental change.” Alaska Dispatch News, August 2, 2015
Elise Patkotak, “How about this? If you don’t vote, you don’t get a PFD.” Alaska Dispatch News, July 28, 2015.Brian O’Connor, “Sustainable Alaska: Tax package likely necessary to plug $2.7b budget hole.” The Mat-Su Valley Frontiersman, August 1, 2015.
Picture credit CC Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0) Timothy Wildey
by Karl Widerquist | Jul 22, 2015 | News, Opinion, The Indepentarian
Alaska’s small Basic Income, “the Permanent Fund Dividend” (PFD), has recently come under greater political pressure than — perhaps — ever before.
The PFD is a yearly dividend paid out of an investment portfolio, “the Alaska Permanent Fund” (APF), which is financed by accumulated savings from the state’s oil revenue. The fund has a principal of more than $50 billion, and it paid out a dividend of $1884 to each Alaskan in 2014. The dividend is fully funded by the APF. On its own it is financially sound. Barring a major catastrophe, as long as politicians leave the APF alone, it can continue to fund the dividend long after we are all dead.
Politicians will leave the APF alone, or so most Alaskans thought until recently. The PFD has been so popular that it was known as the “third rail of Alaskan politics,” meaning that any politician who touched it died. But political realities might be changing.
Since 1980 the Alaska state budget has been funded almost entirely by oil revenue. Now with both declining oil prices and declining oil production, the state faces a large budget shortfall. Lawmakers eventually agreed to close the deficit without tapping into the APF and PFD by cutting spending and taping into another state savings fund, but several lawmakers, including the state’s governor, Bill Walker, proposed tapping into APF earnings. The phrase “third rail of Alaskan politics” barely made the conversation.
Cuts to the PFD could be coming in the next few years. Discussing the future of the budget, Governor Walker said, “At this point I don’t see a scenario that doesn’t involve some of the earnings from the permanent fund.”
by Karl Widerquist | Jun 30, 2015 | News, The Indepentarian
The government of Macau, a semi-autonomous city in China, has announced that this year’s “Wealth Partaking Scheme” (WPS) will distribute 9,000 Macanese Pataca (about US$1127) to each permanent resident and 5,400 Macanese Pataca (about US$676) for each non-permanent resident.
The only condition is to have a valid or renewable resident identity card delivered by the City of Macau.
The WPS is a Macanese government program that has distributed a yearly dividend to Macanese residents since 2008. A total of 675,696 people will receive the dividend, most of whom (607,465) will receive the full amount. The size of the dividend is the same as in 2014, but the number of recipients has increased by 40,000.
The WPS is essentially a small basic income, similar to the Alaska dividend. It is mean to ensure that all Macanese share the benefits of the region’s economic development to help mitigate the effects of inflation.
Credit picture: CC Kevin Jaako
For more information about the WPS see:
Kam Leong, “Wealth Partaking Scheme Susceptible,” Macau Business Daily, June 19, 2015.
Wikipedia, “Wealth Partaking Scheme,” Wikipedia: the free encyclopedia, accessed June 29, 2015.
Karl Widerquist, “MACAU: Government Distributes Temporary Basic Income,” Basic Income News, August 23, 2014.
A check for the Wealth Partaking Scheme in 2008
by Karl Widerquist | Apr 29, 2015 | Opinion, The Indepentarian
Alaska’s Permanent Fund Dividend is the closest thing to a Basic Income that exists in the world today. It gives every U.S. Citizen who fills out a form verifying Alaska residency a check for a share of the revenue from the Alaska Permanent Fund each year. The fund and dividend—on their own—are on solid financial footing. Left alone, they can continue as long as there is a State of Alaska. But the same can’t be said for the rest of Alaska’s budget. Most of it is financed by revenue from the state’s oil exports. Oil reserves are finite, and therefore, the revenue they provide temporary; and oil exports have been gradually dropping for years. The world oil market is volatile, and prices are down right now leaving the state with a substantial budget deficit, in the order of $3.9-4.0 billion this year and yet.
Alaska Dispatch News
The state has no income or sales tax, making those the obvious sources of revenue for, but Alaskans are notoriously skeptical of personal taxes. The state has budget reserves (also funded out of oil revenue), but at current deficit rates, it could spend through those in a matter of three to five years. If oil prices don’t bounce back or if oil exports continue to decline, this strategy would merely put off the day of reckoning and put the state in a worse financial position when that day comes.
With all this issues, Alaska’s $54 billion Permanent Fund is a tempting target for legislators. The constitution protects the fund’s principal, but not it’s earnings. Almost all of the fund’s earnings have been dedicated to supporting the dividend since the dividend’s inception in 1982. The dividend has been protected by its enormous popularity, but with greater financial pressure on the state budget the political balance might change and the dividend—or its future growth—could be at risk.
Several proposals have been put forward, some involving the introduction of new taxes, some involving borrowing against the state’s funds, some involving slowing the growth of the fund and dividend, and some involve lower dividends at present without necessarily slowing the rate of increase of the fund.
To read some of these proposals, go to:
Scott Goldsmith. “Alaskans, we better wise up before we burn through our savings.” Alaska Dispatch News, April 9, 2015.
Alex DeMarban, “Permanent Fund can lower deficit while checks keep coming, economist says.” Alaska Dispatch News, April 23, 2015.
Alice Rogoff, “Alaska need not suffer; let’s leverage our wealth to thrive.” Alaska Dispatch News, April 11, 2015
Fairbanks Daily News-Miner, “Editorial: Time to talk new revenue: Legislature’s focus on cuts has avoided other half of funding equation.” Fairbanks Daily News-Miner, Sunday, April 12, 2015.
Alaska Business Monthly, “New Bill Creates Up to $2 Billion in State Revenue While Protecting Future Permanent Fund Dividends.” Alaska Business Monthly, April 20, 2015
Picture CC Travis
by Karl Widerquist | Mar 4, 2015 | News, The Indepentarian
The Commons Brooklyn -The Experimental Gourmand
Thirty-one people signed the attendance sheet at the first meeting of group of people attempting to start a political movement for basic income in the United States. Several more people attended without signing, and others followed and contributed to the meeting online. The meeting took place from 6:30 to 9:30pm at the Commons Brooklyn on February 26, 2015, at the close of the Fourteenth North American Basic Income Guarantee (NABIG) Congress. The meeting began with all participants discussing their background and the history that brought them to the basic income movement. The group then split into several small groups, each discussing a different issue. Participants reassembled to bring their discussion to the whole group and to make some decisions.
The group chose not to name a leader or a leadership committee. It did not even pick a name for the new organization at this point. Instead, it created several committees and asked them to perform certain tasks. The group created the following committees:
- One committee will be in charge of legally chartering two groups. The U.S. Basic Income Guarantee (USBIG) Network, which has existed since 1999 without an official legal charter, will become a U.S. nonprofit organization—a so-called 501(c)(3). This means that it will be able to accept tax-deductible donations, but it will not be able to do overtly political work. The second organization (yet to be named) will be chartered as a social welfare organization or a lobbying group with a 501(c)(4) tax designation. This means that it will be able to do overtly political work, but donations to it will not be tax-deductible. The following members have so far joined the committee to charter the two organizations:
Steven Shafarman
CONTACT PERSON: Steven Shafarman <sshafarman@gmail.com>
Ian Ash Schlakman <ian@civsys.it>
Jason Burke Murphy <murphyjason@elms.edu>
Mark Witham <mwitham@basicincomeproject.org>
Eri Noguchi <en16@columbia.edu>
Dan O’Sullivan <danosully@gmail.com>
- A committee was created to organize the next meeting of the unnamed political group. The USBIG Network meets once a year at the NABIG Congress (which alternates each year between the U.S. and Canada), but the political group will meet more often. The committee hopes to organize the next meeting within 3 to 6 months. The committees within the unnamed political group will probably meet earlier via the internet. The following members volunteered to organize the next meeting of the unnamed group:
Mark Witham
CONTACT PERSON: Mark Witham <mwitham@basicincomeproject.org>
Jude Thomas <composerjude@gmail.com>
Diane Pagen <dianepagen@yahoo.com>
Ann Withorn <withorn.ann@gmail.com>
Dorothy Howard <dorohoward@gmail.com>
- The content creation committee is in charge of research, news reporting, social media presence, and media relations.
Jason Burke Murphy
CONTACT PERSON: Jason Burke Murphy <jason.burke.murphy@gmail.com>
Contact for people interested in the NewsFlash and BI News: Karl Widerquist <Karl@Widerquist.com>
Contact for people interested in improving the Basic Income articles on Wikipedia: Dorothy Howard <dorohoward@gmail.com>
Scott Santens <scott@scottsantens.com>
- The regional network committee will work on establishing local chapters of the group in cities and towns across the United States. The contact person for this committee is:
Kristine Osbakken <krissosbakken@gmail.com>
- Liane Gaile <liane.gale@gmail.com> and Ann Withorn <withorn.ann@gmail.com> agreed to be the contact people for the for working groups on women & Basic Income, basic income & the new economy, and basic income as an anti-poverty policy.
The organizers of this new group without a name put out a nationwide call to anyone who wants to get involved. If people would like to join one of the existing committees or propose a new committee, please email the relevant committee contacts and volunteer. If you don’t know which committee to contact, the two groups have two general contact people:
Contacts:
The unnamed political group: Jason Burke Murphy <jason.burke.murphy@gmail.com>
The USBIG Network coordinator: Michael Howard <michael_howard@umit.maine.edu>
The Following people signed the attendance sheet at the meeting:
Ann Withorn (right) and Diane Dujon (left)
Ann Withorn
Buffy Cain
Dan O’Sullivan
Diane Pagen
Dorothy Howard
Felix Coeln
Ian Ash Schlakman
Jason Burke Murphy
Jesse Alexander Myerson
Joel Cabrera
Johannes Ponader
Jude Thomas
Karl Widerquist
Kristine Osbakken
Leah Grace
Liane Gale
Mark Witham
Mary Bricker-Jenkins
Mary Bricker-Jenkins
Michael Bohmeyer
Michael Lewis
Mike Sandler
Mitchel Cohen
Peter Barnes
Ron Rubin
Scott Santens
Scott Simpson
Steven Shafarman
Eduardo Suplicy
Tristan Roberts
Tristan Mantel-Hoffmann
Victor Chudnovsky
The Fourteenth NABIG Congress
by Karl Widerquist | Feb 9, 2015 | News, The Indepentarian
The recent drop in oil prices has had a devastating effect on the Alaska state government’s budget, most of which is derived directly or indirectly from current oil revenues. Alaska’s Permanent Fund Dividend (or PFD—Alaska’s small basic income) is not financed by current oil revenue and so is technically unaffected by fluctuating oil prices, but budgetary pressure from declining oil revenues could cause political pressure to divert revenue from the PFD into the main budget.
The PFD is financed by the Alaska Permanent Fund (APF), a sovereign wealth fund set up in 1976 to make some of Alaska’s oil windfall permanent. The APF is protected by the state’s constitution: the state can spend only the returns to the fund, not the principle. But the PFD does not have similar projection. It was created by an act of the state legislature in 1982, and even with 33 years of precedent, it is vulnerable to legislative decision. The PFD is so popular that it has been called “the Third Rail of Alaskan Politics,” meaning that any legislator who touches it dies. But budgetary pressure could change that political condition.
The recent decline in oil prices on top of a large tax cut the state government gave to the oil companies a few years ago has led to a very large budget deficit—currently projected at about $3.5 billion. Legislators are discussing how to fill the deficit. Some legislators have promised not to divert money slated for the PFD, but some recent editorials have called to divert money from the PDF to the general budget.
May different solutions are being discussed. One legislator has introduced a bill to amend the state’s constitution to permanently protect the PFD. A recent editorial calls for reversing the tax cut for the oil companies. One plan being proposed is to divert all new oil revenues to the APF, then use half of the returns from the APF for the PFD and the other for general revenue. Another plan calls for reintroducing the state’s income tax; the state has been without an income tax for as long as it has had the PFD. The absence of an income tax has been nearly as popular as the PFD. It remains to be seen whether support for the PFD will remain strong in the face of the prospect of reviving the income tax.
Picture credit: CC Ryan McFarland
For more information, see the following articles:
Alex DeMarban, “Alaska Dispatch, Panelists suggest cuts, tapping Permanent Fund earnings to solve Alaska’s fiscal woes.” Alaska Dispatch News, October 5, 2014
Becky Bohrer, “Permanent Fund Dividend eyed for constitutional protection.” Valdez Star, Vol. 27 Edition 2, January 14, 2015
Becky Bohrer, “Lawmaker’s bill aims to guard Alaska Permanent Fund benefit.” Alaska Dispatch News, January 9, 2015
Carey Restino, “It’s time to file for Permanent Fund Dividends, and contemplate changes.” The Bristol Bay Times, January 30th, 2015
Fairbanks Daily News-Miner Editorial Board, “Alaska needs budget leadership: Bold solutions needed to fill revenue hole left by low oil prices.” Fairbanks Daily News-Miner, December 14, 2014
John Havelock, “Alaskans should be willing to pay their share with an income tax.” Alaska Dispatch News, January 26, 2015
Katie Moritz, “Senators: Everything but taxes, PFD on table to fix budget.” Juneau Empire, January 21, 2015
KTVA “Walker administration tries to rein in Alaska’s budget.” KTVA CBS 11 News, December 16, 2014
Merrick Peirce, “Writing on the wall: time to dump SB 21.” Fairbanks Daily News-Miner community perspective, January 11, 2015
Ray Metcalfe, “A formula for securing Alaska’s financial future.” Alaska Dispatch News, January 28, 2015
