Hickel would use PFD dividend to heal state budget

Posted: Wednesday, July 30, 2003

JUNEAU (AP) Former Gov. Walter J. Hickel has a plan for dealing with the state's budget crisis.

If Hickel had his way, he'd use money from the Permanent fund dividend to create a community dividend. Hickel, founder of Institute of the North, an Anchorage-based organization that explores Alaska public policy, said the community dividend would take half the money used to pay the dividend and distribute it to cities.

Hickel said he objects to a dividend that has no benefit to the state. The state has paid out about $6 billion in personal dividends since cutting the first checks in 1982, he said.

''Just think of what half of that would have done for the state of Alaska,'' Hickel said. ''... What does the dividend do for the state now? They buy a ticket to Maui or to whatever they want to do.''

The community dividend could be used at the discretion of local governments, or residents could vote on what projects to fund, he said.

Fay Von Gemmingen, an Anchorage Assembly member and president of the Alaska Municipal League, said budget cuts to municipalities this year by Gov. Frank Murkowski have left many cities searching for other revenue alternatives.

''The cities are in bad shape, and we need the moneys that we get from the state from the revenue sharing/safe cities fund,'' she said. ''That helps us pay for our police and our fire, our health and our roads, all these things that are direct services to the people in our cities.''

Altogether, the cuts totaled $37 million in savings to the state, but left municipalities to fill the shortfall.

In June, Murkowski announced the state will distribute $14.7 million in federal money to communities to help mitigate the impacts of the cuts. But there is no guarantee that the money will be available in future years.

Like Von Gemmingen, Juneau Mayor Sally Smith said she thinks the community dividend is a good concept. But Smith said she isn't sure how much of the personal dividend would need to be used to cover municipal shortfalls.

Smith said the idea wasn't a ''grab for peoples' dividends,'' but ''part of the dialogue for finding a solution to the state's fiscal situation.''

A community dividend proposal by Democratic Rep. Carl Moses of Unalaska was passed by the state House of Representatives in 2002 on a vote of 30-9 vote. But the bill died in the Senate.

Moses did not introduce the bill in this year's legislative session.

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