Dividends provide opportunity to look at state's finances

Posted: Sunday, September 19, 2004

Drum roll, please.

Gov. Frank Murkowski will announce the amount of the this year's Alaska Permanent Fund Dividend on Monday night.

It's one of the most anticipated announcements of the year. How much will Alaskans get to spend or save? Will it be enough to pay some bills or eliminate the credit card debt? Will it be used to take a vacation in some sunny clime in the dark of winter? Will some of it be shared with needy neighbors?

Decisions, decisions, decisions.

Alaskans who have received a dividend every year since 1982 have banked or cashed $23,009.85 worth of dividends with the largest check being almost $2,000 back in 2000. It's worth looking at how much the checks have grown since the 1980s and remembering that back then the checks were more like a surprise gift than an entitlement:

1982: $1,000;

1983: 386.15;

1984: 331.29;

1985: $404;

1986: $556.26;

1987: $708.19;

1988: $826.93;

1989: $873.16;

1990: $952.63;

1991: $931.34;

1992: $915.84;

1993: $949.46;

1994: $983.90;

1995: $990.30;

1996: $1,130.68;

1997: $1,296.54;

1998: $1,540.88;

1999: $1,769.84;

2000: $1,963.86;

2001: $1,850.28;

2002: $1,540.76; and

2003: $1,107.56.

The debates over the Alaska Permanent Fund and its dividend program represent the best and worst of Alaska stewardship. The best, of course, is that some Alaskans had the foresight to realize that the state's oil wealth wouldn't last forever. Oil, after all, is not a renewable resource. These far-sighted Alaskans saw the opportunity to use the state's oil wealth to create a "rainy day account" for some future day when oil revenues, which largely funded state government, would diminish. A few years later, legislators created the dividend program, which distributes a portion of the fund's income to Alaskans. Lawmakers correctly saw that dividends would give Alaskans a vested interest in the permanent fund and a desire to protect it.

That, of course, is the worst of it: Alaskans have come to take that "free" money for granted. The permanent fund has become less about helping the entire state when oil wealth diminishes which it has and more about putting money in each Alaskans' pocket no matter what the state's financial picture looks like.

While debate over using a portion of the fund earnings not the principal to help pay for the cost of state government has cooled since the Legislature adjourned for the session, it is a debate that should not be forgotten during this fall's campaigns for state House and Senate seats.

Alaskans should listen closely when candidates talk about how to pay for the cost of state government and if they see a statewide income tax, a statewide sales tax, use of permanent fund earnings not the principal, not the dividends or a combination of all of the above as being part of a sound financial plan for the state.

Legislators already have the authority to use the earnings of the permanent fund to help pay for the cost of state government. Unfortunately, any mention of "permanent fund" translates into "dividends" in most people's minds, and legislators haven't had the will to travel that road.

With the price of oil more than $40 a barrel, Alaskans aren't likely to hear legislative candidates talking about the state's fiscal crisis. That crisis, however, has not gone away. The state was just lucky enough to get a momentary reprieve. Alaskans need to take advantage of that lucky break to do some serious financial planning. They also need to lose the attitude that the state owes them everything and they owe nothing to the state.

Those forward-thinking Alaskans who created the permanent fund and the dividend program didn't mean for those great programs to be protected at any cost while the quality of life deteriorated throughout the state.

This week's announcement of the amount of this year's dividend checks is a great time for Alaskans to think about the state's financial future, as well as their own. The challenge before individual Alaskans and the state is the same: to invest our financial resources wisely.

Just as Alaskans use their dividend checks for all kinds of purposes, legislators should consider if the time has come to use a portion of the permanent fund earnings to help pay for some of the government services that may not be constitutionally mandated but that Alaskans have come to expect.

We shouldn't wait for the next drop in oil prices to act.

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