by Claire Bott | Apr 7, 2018 | News
Alaska’s House of Representatives has passed a bill which sets the state’s annual PFD (Permanent Fund Dividend) at approximately $1,600 per person next year, an amount which has been confirmed after a hard-fought legislative battle over the size of the payment.
The PFD, which is funded largely out of oil revenues, has been reduced for the past couple of years due to low oil prices. In 2016, the payment, which had previously risen to about $2000 in 2015, was cut to approximately $1000.
In late March of this year, the Alaskan House of Representatives voted 21-19 to provide a dividend of about $2,700 per person, but after much debate this was reduced to the current figure of $1,600.
The bill will now go to Alaska’s Senate for further consideration.
Edited by: Dawn Howard
by Karl Widerquist | Feb 28, 2018 | Opinion, The Indepentarian
This essay was originally published in the USBIG NewsFlash in November 2008.
Most people will be surprised to learn that the Republican Vice-Presidential nominee and the Democratic Presidential nominee have both endorsed the basic income guarantee (BIG). In one form or another both support policies to guarantee a small government-provided income for everyone. As reported in the USBIG Newsletter earlier this year, Obama has voiced support for reducing carbon emissions with the cap-and-dividend strategy, which includes a small BIG.
Sarah Palin, like most Alaskan politicians, supports the Alaska Permanent Fund (APF). Existing rules caused the APF dividend to reach a new high of $2,069 this year. That much had nothing to do with Palin. But, whatever else you might think of her, she deserves credit for adding $1200 more to this year’s dividend (see the story above and another in issue 49). She proposed it to the legislature and pushed it through, resisting counter proposals to reduce the supplement to $1000 or $250.
Most people who learned about Palin at the Republican National Convention in August would probably be surprised to learn that such a hard-line conservative supports handing out $16,345 checks to even the poorest families. Actually, families the size of Palin’s will receive $19,416—no conditions imposed besides residency, no judgments made.
The support of politicians like Palin’s provides evidence against the belief that BIG is some kind of leftist utopian fantasy with no political viability. In the one place BIG exists it is one of the most popular government programs and it is endorsed by people across the political spectrum.
The APF has not become an issue in the campaign, and I doubt she has Palin plans to introduce a similar plan at the national level, but when the issue has come up, Palin has taken credit for it as a conservative policy. In an interview on the Fox News Network, Sean Hannity confirmed that Palin increased the Alaska dividend by $1200 this year. Hannity comment, “I have to move to Alaska. New York taxes are killing me.”
Sounding like some kind of progressive-era land reformer, Palin replied, “What we’re doing up there is returning a share of resource development dollars back to the people who own the resources. And our constitution up there mandates that as you develop resources it’s to be for the maximum benefit of the people, not the corporations, not the government, but the people of Alaska.”
Tim Graham, writing for the conservative website Newsbuster.com criticized NPR’s Terry Gross for asking questioning that implied opposition to the APF in an interview with Alaska public broadcasting host, Michael Carey. Graham writes, “Gross walked Carey through the idea that it’s not hard for Palin to be popular in Alaska when she’s handing every family a $1200 check from all the oil business. She then elbowed Carey about how that money could have been better ‘invested’ (as Obama would say) in government programs.’ Suddenly conservatives are ridiculing people they assume do not support unconditional grants.
Palin justified a tax increase on the oil companies to support higher BIG on the PBS Now program before she was nominated for vice-president. “This is a big darn deal for Alaska. That non-renewable resource, of course, is so valuable …. And of course [the oil companies] they’re fighting us every step of the way when we say, ‘Well we wanna make sure, especially as it’s being sold for a premium, that we’re receiving appropriate value.’ … The oil companies don’t own the resources. They have leases and the right to develop our resources for us. And we share a value, we’re partners there, because they do the producing for us. But we own the resources.”
It is tempting to dismiss all of this conservative praise for BIG as election year insincerity. No doubt if a democratic candidate had handed out an unconditional grant of $3,269 to every citizen of their state, many conservatives would jump on it as socialist class war. Indeed some of Obama’s tax credit proposals, which are not nearly as far reaching as the APF have received just this treatment.
Speaking at a recent rally in Virginia, McCain took issue with Obama’s refundable tax credits saying, his tax plan “is not a tax cut; it’s just another government giveaway …. I won’t let that happen to you. You’re paying enough taxes. … Obama raises taxes on seniors, hardworking families to give ‘welfare’ to those who pay none.” McCain often invokes Joe the Plumber to label such policies as “socialism.” Ruth Marcus noted that only minutes later John McCain touted his own “refundable tax credit” and that McCain vilifies Obama for wanting to reverse the Bush tax cuts McCain voted against. I have little doubt that McCain would give the APF the same treatment if his opponent rather than his running mate had expanded it.
Politicians who call themselves strait-talkers and don’t talk straight are nothing new, and they exist in all parties. But this doesn’t meant that we can dismiss all conservative support for the APF as insincere. There are limits to what people will accept even from leader of their own party. Many conservatives would not accept, for example, a leader who had proposed public funding to help rape victims obtain abortions, but they will support a leader who endorses $16,345 in no-questions-asked grants to every family of five.
The lesson here is that the APF is a model ready for export. Readers of this newsletter will know that governments in places as diverse as Alberta, Brazil, Iraq, Libya, and Mongolia have recently thought seriously about imitating the Alaska model.
Some might be tempted to think that the APF isn’t a true BIG and it isn’t motivated to help the poor. Not so: Jay Hammond, the Republican governor of Alaska who created the APF, came all the way to Washington, DC to speak at the U.S. Basic Income Guarantee Network conference in 2004. He told me that his intention was to create a BIG to help everyone—most especially the disadvantaged. If he had his way the APF fund would now be producing dividends 4 to 8 times the current individual level of $2,069.
Others might dismiss the Alaska model saying that it is a unique case because Alaska has so much oil wealth. Again, not so: Alaska ranks only sixth in U.S. states in terms of per capita GDP, with an average income just over $43,000 in 2006, more than $15,000 per year less than number-one Delaware, and only $6,000 per year ahead of the national average. Any other state or the federal government can afford to do what Alaska has done.
Alaska has oil wealth; other states have mining, fishing, hydroelectric, or real estate wealth. Governments give away resources to corporations all the time. The U.S. government recently gave away a large chunk of the broadcast spectrum to HDTV broadcasters at no charge. Offshore oil drilling will soon be expanded on three coasts. Everyone who emits green house gases and other pollutants into the atmosphere takes something we all value and—so far—pays nothing.
What was different about the Alaskan situation was that Jay Hammond was there to take advantage of the opportunity. With the Alaska model in place, it will be just a little easier for next person at the next opportunity.
-Karl Widerquist, Reading, UK, October 23, 2008
For the Newsbusters article go to:
https://newsbusters.org/blogs/tim-graham/2008/10/19/snobby-airs-nprs-terry-gross-goes-after-palins-extreme-religious-views
For the Hannity Interview go to:
https://www.foxnews.com/story/0,2933,424346,00.html
For the Now program report go to:
https://www.pbs.org/now/shows/347/index.html
[The quoted exchange occurs about 18 to 20 minutes into a 25-minute report titled “Alaska: The Senator and the Oil Man.”] (Thanks to Paul A. Martin)
For U.S. GDP figures by state go to:
https://www.ssti.org/Digest/Tables/062007t.htm
Ruth Marcus’s editorial on McCain is online at:
https://www.realclearpolitics.com/articles/2008/10/mccains_campaign_is_both_unciv.html
by Claire Bott | Feb 25, 2018 | News
Alaska’s provision of regular, unconditional income to its inhabitants has had no overall effect on employment, a recent study has found.
The Permanent Fund Dividend (PFD), provided by the Alaskan government to all citizens who apply for it, currently stands at approximately $2000 per person per year. The authors of the study have indicated that, although this seems a small amount, the fact that it is applied regardless of age means that a two-parent family with two children could claim $8000 per year, which is considerably more substantial.
The study was carried out by Associate Professor Damon Jones of the University of Chicago’s Harris School of Public Policy, and Assistant Professor Ioana Marinescu of the University of Pennsylvania School of Social Policy and Practice. Jones is a Faculty Research Fellow at the National Bureau of Economic Research, while Marinescu has had her research published in a number of peer-reviewed journals.
Claims have previously been made that the provision of a universal basic income such as the PFD would tend to discourage participation in the workforce. However, the studies which seemed to support this have been based on situations where the money provided was given only to a small group of people. Jones and Marinescu posited that, in a situation where unconditional funds are provided to a large population, effects on employment could differ.
The study did in fact find that there was no overall decrease either in employment or in overall hours worked. The authors suggest that one reason for this could be that the PFD recipients, in spending their additional funds, are indirectly increasing the need for extra employees to provide goods and services to them.
The only significant change found by the study was a 17% increase in part-time work. Given that a greater percentage of women than men appeared to be taking up part-time work, it is possible that this change may have been, at least in part, the result of women using the extra funds to provide childcare, without which they would have been unable to remain part of the workforce.
The study was reported in a number of news outlets, including the New Yorker.
Alaska’s Permanent Fund originated in the 1970s, with a sudden influx of money due to revenue from newly exploited Alaskan oil reserves. Following concerns that a corresponding increase in government spending could be unsustainable should the amount of oil revenue decrease, the Permanent Fund was established, receiving 25% of “all mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments and bonuses received by the State”, according to the wording of the relevant amendment to the Alaskan constitution.
The Permanent Fund Dividend was first provided in 1982, when it was only a few hundred dollars per person. It has since increased at an approximate rate of $500 per decade.
Edited by: Dawn Howard
by Karl Widerquist | Jan 24, 2018 | Opinion, The Indepentarian
This essay was originally published in the USBIG NewsFlash in November 2007.
Public awareness of BIG took a small step forward this summer when the Simpsons Movie made a joke about it. Homer and his family are greeted at the Alaskan border by an official who says, “Welcome to Alaska. Her ares a thousand dollars. We pay everyone in Alaska to let us destroy the environment.” It’s not the most flattering joke, but it makes a fair point about the oil-based dividend. Although taxes on the extraction of fossil fuels might be a good way to give firms an incentive not to over-exploit them, and although a BIG might be a good thing to do with those revenues for many reasons, a resource-linked BIG might make people more willing to accept environmentally damaging resource exploitation—thus partially counter-acting the exploitation-discouraging effects of the taxes. This is underlying moral behind the Simpsons’ joke, but it was funnier when they said it.
12.5% of state oil taxes go into the APF, which is invested in stocks and bonds. A portion of the returns on the fund are distributed to Alaskans each year. Of course, the Alaskan government does not pay people when they arrive in the state; Individuals must be residents in the state for a full year to be eligible for to receive dividends from the Alaska Permanent Fund (APF). But this is fairly within the confines of the writers’ license for a cartoon.
In one way the cartoon significantly understates the generosity of the APF Dividend. The APF gives the same dividend to every man, woman, and child in the state. Because of recent increases in the stock market to nearly 40 billion dollars, the principal of the APF grew by more than 17.1% for the fiscal year, according to Scripps Howard News Service. Because of this and recent years’ gains, the APF Dividend went up significantly again this year. APF checks this October and November were for $1,654, according to the Juneau Empire. The Simpsons arrived in Alaska with a family of five, and so the border guard could well have said, “Welcome to Alaska. Here’s $8,270.” In other words, the actual figure is eight times more generous the figure mentioned in the movie.
According to the Associated Press, “for many residents, the check is no joke. It means getting caught up on bills and supplementing income that for some is a week-to-week living in Alaska, where the cost of living is high in part because of its distance from shipping centers in the Lower 48 states.” People who have lived in Alaska since the first Dividends went out in 1982 have received a lifetime total of $27,536 in APF Dividends.
It is doubtful that mention in the Simpsons Movie will spark a campaign for a National Permanent Fund based on resource use throughout the United States. However, Albertans have been eyeing the APF with envy for years. Alberta is a Canadian Province a few hundred miles southeast of Alaska. Alberta has also had large oil revenues, but it lacks a mechanism like the APF to ensure that all Albertans benefit from them.
Allan A. Warrack, of the University of Alberta, writing in The Edmonton Journal on October 15, 2007, called for an Alaska-style dividend for Alberta. The province has a fund based on oil revenues, called the Heritage Fund, which was set up for similar reasons as the APF—to smooth out the province’s gains from the boom-and-bust oil industry. But there is one important difference. The Heritage Fund pays no dividends to individuals. Its earning go solely into the province’s general revenues. According to Warrack, this fact has caused Albertans to take much less interest in their fund than Alaskans. Much less has been invested in the Heritage Fund than in the APF, and Warrack argues, it has been less well managed. Warrack writes, “For about a quarter-century, the Alberta Heritage Fund was static in nominal value, [and] fell in purchasing power due to inflation.” The APF has steadily increased in both real and nominal value.
Warrack mentions that Alberta actually had a social dividend in the 1930s, under the government of the Social Credit party. Although it was short lived, the dividend was popular. Alberta tried it again with a one-time payment in 2005. Warrack writes, “Some right-leaning citizens viewed the government cash payments favourably because it meant there would be ‘less for the government to waste.’ Some left-leaning citizens favoured the payments on grounds of social equity—equal payment amounts meant the needy would get the same amount as the rich, though the value to the needy would be much higher. Still others said: ‘Just gimme the dough!’” Perhaps someday the joke will be, “Welcome to Alberta. Here’s 10,000 Canadian Dollars, eh?”
But even as Albertans envy the Alaska Dividend, Alaska lawmakers are coming under increasing pressure to divert dividend funds into general state spending. Each U.S. state receives a significant amount of funding from the U.S. Federal government based partly on the perceived needs of the state. According to Hal Spence, writing for the Peninsula Clarion and Morris News Service-Alaska, Federal lawmakers are reluctant to give money to the Alaska, when they perceive that it can afford to give large amounts of money away to residents each year. Spence believes this pressure will grow as the APF increases.
Warrack’s editorial can be found online at: https://www.cwf.ca/V2/cnt/commentaries_200710120811.php.
Information on the APF can be found on line at:
Home
Hal Spence’s story is on line at:
https://www.alaskajournal.com/stories/081907/hom_20070819001.shtml
And he can be reached at hspence@ptialaska.net.
-Karl Widerquist, Oxford, UK, November 1, 2007
