Contributed by Bee Rupright
There has been a lot of discussion about our diminishing Permanent Fund Dividend, and not much about the Principle Fund. Of course, we should all be outraged at the taking of our PFD to support an unsustainable State Operations Budget, but the entirety of the current PFD and the Fund Balance and how they work has not been addressed. Right now and since its inception, the state has had access to freely spend. The only exception is the 25 % of the Mineral royalty revenues to be deposited into the Fund Principle. Traditionally, the legislature had deposited more than 25% to increase the Fund. This year, the legislature only put in the required 25%. Yes, that’s right; the free spending goes on as even the Constitutional Budget Reserve is stripped from unpaid “draws”. Of course there are statutes for all that, as there are statutes for our PFD. Statutes are no guarantee.
I’m going to support a Spending Cap and preferably within the constitution. I support the POMV model as it is to be used as a Spending Cap with the end result - to run our operations off that percentage. The percentage to be determined after a sustainable budget plan is adopted. (I believe more budgeting can be done than our current legislative caucus!). The Permeant Fund Dividend will be separate and out of legislative control. I am perplexed that the currently caucus legislature only deposited 25% into the Fund Principle. It is apparent that the growth of government is the only concern, not growing the Principle Balance that their own current statutory POMV and our PFD are tied to. Our Constitutional Budget Reserve should not be easily accessed or borrowed from unless certain emergent conditions existed along with ¾ majority vote with the emergent condition being a substantial drop in the market. This is a strategy to eliminate the up and down fluctuations of the oil and gas industry and create a stable economy. I don’t believe that anyone could say we’ve seen much from the largess of the oil price boom and now - it’s gone. To believe that we can budget within the current parameters of our cash availability is ridiculous. We’ve seen where that leads. We cannot rely on another (oil) pie in the sky to come save us!
The PFD needs to be out of the hands of the legislature. The Permanent Fund Dividend should be made into a trust: The Alaska Permanent Trust. Also, a certain percentage of the Principle earnings will go into the fund and it will grow quickly. This, I believe, would be the best approach. Another idea would be to just put the percentage of the dividend into the constitution. Pretty easy, but the sitting legislatures can’t seem to address this. Remember the PFD is yours- period! It was instituted for the tradeoff of giving up the property rights under your feet and I am adamant about preserving it. To say we just go back to the original and still standing PFD statute is not enough to protect it as it is by statute only and open to interpretation.
Your current legislature only wants to hand you a pittance and has named their plan through statute – a plan that has diminished the PFD greatly and grows an unsustainable operations budget... I foresee unaccountable spending to the max – with no forethought to the future. Haven’t we been here before? Are we not here now? So then what –income tax? Sales tax? Yes, most assuredly and it’s already on the table.
In conclusion, moving to the POMV as the sole source of Operations Income (As a Spending Cap) or any way to set a constitutional limit on operations spending, along with a process to curb free spending and borrowing from cash accounts is curtailed, is a good thing, as long as the PFD is separated from that equation . Then we can begin to invest in our state. This is what needs to happen. Business is what will bring our State up out of this mess, not overgrown government.
But this current caucus legislature’s only proposal to increase income is to tax and take the lion’s share of our PFD’s while awaiting the pie in the sky. I am certain that the current legislature wants Ballot Proposition 1 to pass. This is the way to ensure incredible governmental growth and a cash influx of which we will see nothing again (can anyone say studies?). But we can ensure another crash. This is how 60 billion dollars turns into Zero.
Please vote NO ON BALLOT 1, as it leads to a false bottom.
And do VOTE IN THE PRIMARY August 18th
Thank You,
Bee Rupright
Candidate, State Senate SeatD , Wasilla and Big Lake
