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Feds suggest using permanent fund to pay for bypass mail

Posted: November 30, 2011 - 11:25am

A federal official is recommending the state tap the Alaska Permanent Fund to pay some of the costs of living in Alaska, rather than looking to the federal treasury.

The suggestion quickly drew a harsh reaction from some state officials, however.

The unusual recommendation came from the U.S. Postal Service’s Office of the Inspector General, which issued a report Monday saying the federal government should not be funding the $70 million bypass mail program, which subsidizes shipping costs to rural locations.

Instead, Inspector General David Williams said the state had the resources to provide for those communities itself, including building new infrastructure to serve them more efficiently.

The program is typically called “bypass mail,” due to its linkage to the Postal Service, but it more typically involves goods delivered on pallets rather than standard mail.

The inspector general highlighted that fact by not even calling it “mail” in his report.

Continuing the bypass mail subsidy for rural Alaska may even be limiting some development in the state, the report said.

“Alaska Bypass removes an incentive for the state of Alaska to develop infrastructure to connect its rural residents,” according to the inspector general.

The report even offered a suggestion as to where Alaska could get the money to pick up that cost itself.

“The State of Alaska’s permanent fund is currently valued at almost $40 billion and could theoretically be used to pay for the program or improve the state’s ground and air infrastructure for the benefit of all Alaskans,” the report said.

The Alaska Permanent Fund, the state’s oil-fueled savings account, was recent valued at more than $40 billion, but recent market declines have reduced its value to $36.7 billion as of last Friday.

The Alaska Constitution protects the fund’s principal, while earnings are used to beef up the fund and pay the Permanent Fund Dividend to Alaskans each year.

The inspector general’s report did not specify a manner in which the fund would be used to follow his suggestions.

In a footnote in the report, the inspector general noted the Alaska Permanent Fund owns the “upscale” Tyson’s Corner Center mall in the Washington, D.C. area.

Sen. Bert Stedman, R-Sitka, co-chairman of the Senate Finance Committee, called the inspector general’s suggestions “over the top.”

Stedman, whose committee monitors Permanent Fund issues, said the federal government shouldn’t be telling the state what to do with its money.

“I thought it was out of line,” he said. “The state of Alaska’s finances are, quite frankly, irrelevant to the fairness of bypass mail,” Stedman said.

In most places, bypass mail is delivered by air to communities off the road system. In one place, the report noted, a road was built to a bypass mail community, but the program continued to subsidize shipping there using tractor-trailers.

The report also noted Alaskans pay no state income or sales taxes, and have the lowest gasoline tax in the nation.

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justamom 11/30/11 - 05:18 pm

If rural Alaskans wanted to "connected" to the rest of us, they'd live with the rest of us. I'm not willing to fork over my PFD so those who are rural can get a pallet of stuff.

BigRedDog 11/30/11 - 10:18 pm
The change is coming

Sooner or later; Being from the sooner state I think those changes President Obama has been speaking of are here. An wise old buddy of mine used to say "Save your money, hard times are a coming." If this plan goes through to stop paying the bill for bye-pass it's going to kill hundreds of villages. The no road policy to western Alaska is genocide to the culture of our fellow state citizens, Native Alaskans. The need for a road to Bristol Bay on the south and Nome on the north should be as much a focus as our energy policies. I would agree and support Governor Parnell's interest in building a road down the Yukon to the coast and Nome. Then the commerce that would follow that would power the Alaskan economy for several generations. Empowering the rural community reach their much deserved potential. Come on Man your killing our Native People and their culture, genocide via isolation.

akal 12/01/11 - 09:30 am
mail monopoly

if the feds want more money for bypass mail we should be able to use other forms of delivery. the monopoly of first class mail should be removed if the feds wont pay for it .

akintx 12/01/11 - 09:54 am
PDF usage

Though I am for using the PDF for making Alaska better, it should be Alaskan's making that decession not any thing to do with the FEDS.

kenai-king 12/01/11 - 10:55 am
Feds Mail

If the Fed's would want to stay out of it them we need to take back our resources and build roads to these villages. Oh but no we can't do that because the feds have all the land tied up and untouchable what a bunch of crap.

jimlbak 12/01/11 - 11:04 am
It's who you vote for

Noticed a change in the attitude by the Feds since a new President was elected by a minority of actual voters. "Don't vote for me and I will get even." (Chicago Politics) If the Feds stop delivering mail to Rural Alaska they have violated one of their only true mandates. It may be time to dust off the words of Joe Vogler and proceed from there.

marlib 12/01/11 - 11:14 am
Remember the "Bridge to Nowhere"?

The Washington politicos denounced, belittled, mocked, and denied funding for the Ketchikan bridge, and now some muckety-muck expects us to graciously bail out the feds on the bypass issue. While I agree that Washington has a huge financial crisis, it's not up to this state, or any other, to fix the federal deficit.

radiokenai 12/02/11 - 12:33 pm
I 4 an I.....

This is the time to STRIKE at the heart of the obama-nation! Make the bastards a deal, we will cover our portion of the so called by-pass mail...and Washington sign over ANWR back to Alaska!

Otherwise, last time I checked, the USPS was run by the FEDERAL GOVERNMENT...NOT Alaska!

Strike the dragon right in his Achilles heal! You want us to take over your debt, it is going to COST you dearly (like it costs Alaska to take over Federal debts!)


Koma 12/06/11 - 04:10 pm
Stay Vigilant Alaskans

You have a hard enough time keeping state legislators hands off the peoples fund, now the feds have their eyes on it. They'll be more than happy to take it, and tax you for the privilege of them doing so.

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