Time to cap dividends and use fund earnings to help pay for services

Posted: Thursday, January 29, 2004

We find it difficult to believe that some legislators are questioning whether the permanent fund should be used for the purpose for which it was established.

They want none of its earnings directed to state services and all of it to go for Alaska's free-money program. If the liberals had their way, Alaska would impose an income tax to keep the free money flowing from the state's $27 billion bank account. That would be a socialist-style transfer of wealth from one class to another and would break faith with those who voted for the fund in 1976. The liberals see themselves as Robin Hoods, stealing from the rich and giving to the poor. Except their idea of the rich includes virtually all working people.

The fund earnings have for far too long been considered sacrosanct, a financial kitty to be used only for individual

dividend checks. The dividend program is too important to household budgets across Alaska to end altogether, but the time has come to cap the giveaways and be true to those who

established the fund in the first place.

Those who voted in 1976 to set up the fund thought they were creating a rainy day account that would take excess oil revenues out of the hands of politicians of the day and set them aside for future needs. The free-money dividend program was an afterthought supposedly to give individual Alaskans a stake in resource development and motivation to monitor the fund's governance. But that tail has been wagging the dog of state for far too long. The earnings have been used for nothing except individual dividend checks.

By all means, let's continue the dividends in some form. But let's also put the permanent fund back on track as a revenue source for state operations. The money is needed for its original purpose.

But while we're at it, let's ask the University of Alaska to commission a study on what the long-term impacts of the free-money program have been on the state. Alaska needs to know what the dividend giveaway has done to the spirit and values of its citizens, to the extent those can be measured. The state should also try to determine how many people have come here for free money. Who are they, what are they contributing to the state and what problems do they bring?

Gov. Murkowski has summoned a citizen conference at the University of Alaska Fairbanks next month to discuss what should be done with fund earnings. We hope the question of whether to use any part of them for public needs will be taken completely off the table at the outset and discussion be focused instead on whether the free-money program should be continued and at what level.

If the study suggested here is ever carried out, we may find that the dividend program was a bad idea in the first place. Alaskans may then be asking themselves: ''What have we done?''

The Voice of the (Anchorage) Times

Jan. 20

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