Alaska Permanent Fund Defenders campaign to save the Dividend

by | Jul 21, 2021 | Featured, News

Alaska Mountain Fireweed

The Alaska Permanent Fund was started in 1982 to make sure Alaskans directly benefit from its resources in the wake of its oil boom in the 1970s. Part of the proceeds from investments of the principle, which is held in trust for the state and invested by an independent board, is shared yearly with all Alaskan citizens as the Permanent Fund Dividend (PFD). This is as close to a basic income by BIEN’s definition as has been achieved world-wide. It is paid equally to each individual regardless of age or financial status, without means tests or other conditions and regularly every year, although the amount differs depending on how the APF’s investments do over a five year period. It has inspired campaigns in many other countries, including Mongolia, South Africa and Goa, to share the profits from resource use as a basic income or dividend to all citizens. The PDF is under particular threat at the moment as a result of recent deficits in the State’s budget, which some legislators want to plug by taking the dividend payments away entirely.

BIEN News interviewed a board member from the Permanent Fund Defenders about the situation. Joe Geldhoff, a lawyer in Juneau, the capital of Alaska, said that “while it is in our constitution that Alaskan citizens should benefit from the state’s resources, the dividend itself is only in legislation.” The PFD allocation for Alaskan citizens needs to be approved by the state legislature every year. For the first thirty years it was paid equally from a fixed 25% share of the fund’s average profits over five years. In the past six years state politicians have whittled down the amount of dividend paid, “despite big promises at election time, which are often unrealistic.” There are worries that there might be no dividend paid out this year, despite the Fund making a profit of some $18.6 million, and large Federal subsidies to the state, especially since the Covid crisis. The PFD competes with state services and projects for priority, since the state government levies neither income nor sales taxes to cover its own spending, which also comes from Permanent Fund proceeds. “This should be a lesson for people advocating basic income schemes all over the world,” Mr Geldhoff said.

The Defenders want the eariler formula from Permanent Fund investments restored to the dividend, and enshrined in the State constitution to protect it from other budget demands and political maneuvering. Mr Geldhoff said that the current special session will be deciding this year’s dividend allocation, and may not pay it at all. The legislature may also consider a constitutional amendment to protect it and restore the original formula which, if approved, would then go out to be voted on by all state citizens. He expressed the worry, however, that there “aren’t enough adults” amongst state politicians, and that they could be too divided to see the latter option through.

“Young people have become very cynical about the political process,” Mr Geldhoff said, so the Defenders are working to educate all Alaskans about the role the dividend has played in “lifting people out of poverty, supporting private enterprise and combatting income inequality” and how they can get involved with saving it. He said that while those with higher salaries in the state’s large public sector have tended to save their dividend to send their children to university, the dividend has enabled people in rural areas with little cash to maintain and buy equipment for subsistence farming, hunting and fishing. Women in particular have used their dividend to get away from relationships which have gone bad, and to train for better jobs. “It’s really about whether you trust citizens to spend the money well or the politicians who tend to give contracts to their cronies,” he said. “This is our common wealth from which we all should have a direct share.”

A recording of our interview with Joe Geldhoff will be available soon. In the meantime people can support the all-volunteer Permanent Fund Defenders in getting their message out to Alaskans on their GoFundMe page. More information about their campaign and the history of the PFD can be found on their website, and the latest news can be followed on their Facebook page.

United States: More on the fiscal crisis in Alaska

United States: More on the fiscal crisis in Alaska

by | Jul 30, 2019 | News

It seems that the Alaskan tax policy is being too generous with oil companies. On top of the fact that there is no income or value-added tax (VAT) in Alaska, every year oil companies operating in Alaska are granted wealthy tax credits, this year amounting to $1.2 billion. That is roughly the amount of the state’s deficit, for the reduction of which governor Mike Dunleavy now has a plan to slash $440 million, as reported before.

Under the referred plan, features a 40% cut in the University of Alaska funding, a $58 million reduction to the state’s Medicaid program, and considerable slashes to several social security programs. That or the Alaska Permanent Fund (APF) gets cut in half. The professed need to perform these draconian cuts flies in the face of the inexistent tax policy in Alaska, a clear ultra-liberal state of affairs which mainly benefits oil companies operating in the State.

State Senator Bill Wielechowski, a long-time APF defender has recently introduced a bill aimed to eliminating the unjustified tax credits to oil companies, but hasn’t got much support until now. One reason for this is that, traditionally, Alaskans are pretty averse to taxation, no matter who or what is targeted by it. However, scrapping these enormous tax cuts and introducing income and consumption taxes could be, in the long term, the only viable road to provide middle-class and lower income Alaskans the social security spending they need, and the APF unconditional payment they deserve.

More information at:

Tim Higginbotham, “Don’t Blame the Alaska Permanent Fund Dividend”, People’s Policy Project, July 18th 2019

André Coelho, “United States: Alaska’s desperate governor considers massive cuts to university budget to keep Dividend”, Basic Income News, July 9th 2019

United States: Alaska’s desperate governor considers massive cuts to university budget to keep Dividend

United States: Alaska’s desperate governor considers massive cuts to university budget to keep Dividend

by | Jul 9, 2019 | News

Mike Dunleavy, sitting on top of an oversized Alaska Permanent Fund Dividend check. Picture credit to: Anchorage Daily News.

Basic income yes, but not at any cost. The alarm comes from Alaska, where governor Mike Dunleavy has announced cutting his 2020 state budget by as much as $410 million, one-third of which will fall upon the University of Alaska. To the University, that represents 41 percent of its own annual budget, which means that, if applied, these cuts would render the state’s university unrecognizable. Dunleavy calls this move a “policy choice” linked to his professed promise to increase the Permanent Fund dividend Alaskans benefit each year.

Arguably, consequences for the Alaskan economy, and particularly for the state university, would be devastating.

The University President, James R. Johnsen, has stated that this “will strike an institutional and reputational blow from which we may likely never recover.” And the implications for the wider Alaskan economy and even throughout the world may be far reaching since research has shown that investing in universities has considerable positive effects on the economy, and also because the University of Alaska is a core centre of research for Arctic issues. This is particularly important these days, in the middle of a climate crisis).

These budget cuts from Dunleavy’s Office are, however, rooted in a deeper rationale and tradition. That is because politics in Alaska of late have been largely tied to oil money, and the collection of taxes has been scarce, or nonexistent.

Michael Howard, professor at the University of Maine and specialist in basic income related policies, has stated on Facebook:

“A better framing of the problem in Alaska would include Alaska’s lack of an income tax, reliance on oil revenue to fund state government, and the steady decline of the oil revenue. Alaskans don’t have to abandon the dividend in order to fund the University. They just need to pay income taxes like people in most other [US] states. However, this story does vividly illustrate that universal cash payments in practice always need to be evaluated in comparison to the competing policies for government spending and the budget constraints. Slashing the university budget by 41% ought not to be an option.”

More information at:

Cas Mudde, “Alaska’s governor is trying to destroy its universities. The state may never recover”, The Guardian, July 6th 2019