Permanent Fund dividend is yours. Demand its constitutional protection.

The Legislature has reconvened. Alaskans are wary.  Our Permanent Fund is under attack by the Walker administration and legislators who want your money for government rather than to pay your full dividend. The late Gov. Jay Hammond insisted on the dividend. Gov. Wally Hickel supported the dividend and fought for it. A dividend based upon earnings connects Alaskans to the fund and protects it.

Current Alaska statutes are clear. From earnings of the $65 billion fund, pay dividends from 50 percent of the five-year average of earnings after inflation-proofing. The other 50 percent can be spent on government. As an alternative, some want a "percentage of market value" approach. Current POMV proposals sets the payout to government at 5.25 percent, regardless of earnings. If earnings falter, the principal of the fund is at risk.

Why do Alaskans get a dividend each year? It is not a government handout. It is not free money. It is not a violation of conservative principles. It is not to attract every ne'er do well to join us as residents. For 37 years, the Alaska Permanent Fund has earned money and paid a portion of investment earnings to the owners, you, the Alaskan people. Every man, woman and child who lived here more than one year qualified to be paid a portion of their earnings. It is your money, not the government's. The state is just your bookkeeper.

Gov. Walker vetoed half the dividend two years ago. He demanded legislators cut the dividend to $1,100 last year, and they did. This year, he dictates $1,200, less than half what is statutorily required. Deciding a lawsuit, the Supreme Court ruled that there are no consequences when the a governor and Legislature violate their own statute. So the people must act.

The solution to stop PFD raids is to provide protection for the dividend through a constitutional amendment. Dividends should be paid only from fund earnings.  In 1976, Alaskans voted constitutional protection of the principal of the fund.  Now we need to finish the job and protect the earnings reserve and our dividends. Senate Joint Resolution 1 must pass by two-thirds vote. Call your legislator and find out if they are a friend or foe of your dividend. Until Gov. Walker is retired as Alaska's imperial sovereign, he will oppose protection. The court gave the governor and Legislature open access to your Permanent Fund dividend. Big spenders are protecting government funding at your expense.

[Supreme Court upholds Gov. Walker's veto of half of Permanent Fund dividend]

The Alaska Permanent Fund is a trust. It has similar fiduciary responsibilities to banks. Investments are not the property of the state or corporation. The people's savings grow through royalty contributions and prudent investments. Last fiscal year's earnings were $6.8 billion. FY 2019 year to date are $4.8 billion. Big spenders, however, are redefining the meaning of deficit to exclude Permanent Fund earnings. They want it all for government.

Investopedia.com defines a dividend as "a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders." A dividend is paid by every enterprise that wants happy shareholders. The governor and Legislature are accountable to Permanent Fund shareholders. The next election is their annual shareholders meeting. Will you give your proxy to someone who is cutting your grandchildren's Permanent Fund dividend?

If Microsoft shareholders had their dividends cut in half, management would either correct earnings or be fired at the next shareholders meeting. Exxon directors would be discharged by shareholders if an arbitrary cut was made.  Same for Arctic Slope Regional Corp. or Cook Inlet Region Inc. Earning enterprises meet budgets for shareholders. POMV entities do not. Alaskans are the shareholders of the Alaska Permanent Fund. Permanent Fund Defenders demands restoration of past dividend cuts and full payment of the FY 2019 dividend, just like the statute requires.

Gov. Walker's and the Legislature's dividend cuts have driven Alaska's recession deeper. The cuts are the most regressive possible tax on Alaskans. Cutting cash for you, the consumer (Alaska's economy, like that of the rest of the United States, runs on about 70 percent consumer spending), harms the private economy and hurts rural people who need it most. These dividend cuts were not spent on education or public safety. People's dividends were just left in reserves, earning a pittance.

Want to end the recession? Give Alaskan consumers the dividend their fund earned.

[Dividend debate has gotten thornier]

Our Permanent Fund is made up of $15.3 billion in earnings reserves and about $50 billion in principal, totaling $65 billion. We have the financial strength to handle the budget without cutting people's dividend. The entire Alaska Permanent Fund will only be protected when the people of Alaska require it.  Only a constitutional amendment can provide that protection.

Jim Crawford is the president of Permanent Fund Defenders, pfdak.com, an Alaska educational nonprofit corporation based in Eagle River.  Jim is a third generation, lifelong Alaskan who co-chaired the Alaskans Just Say No campaign to stop the raid on the Permanent Fund in 1999.  He also served Gov. Jay Hammond as a member of the Investment Advisory Committee which formed the investment and corporate strategy of the Alaska Permanent Fund Corporation in 1975.

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