Any candidate for governor, House, or Senate that says they will provide a full Permanent Fund Dividend (PFD) are not serious candidates and need not apply.
There, I said it. Most other commonsense Alaskans believe the exact same thing. And Republican Bernadette Wilson, I’m looking at you.
There is already a dozen candidates for governor and I haven’t heard any of the others be as open about their views of the PFD as Bernadette. She has specifically said we can have a full PFD through “right sizing government” and “across the board cuts.”
If I heard you wrong Bernadette, please clarify your position…. and be VERY specific on how your math works. The details will set you free.
The budget is about $5.5 billion, plus $2.5 billion for a full PFD. That’s $8 billion. Now show us the revenue side of the equation to make it balance. And I’ll even spot you the percent of market value (POMV) draw of $4 billion plus all other unrestricted general funds (UGF) funds of $2 billion, so you’re 3/4 of the way home. All you have to do is find $2 billion – every year moving forward.
While we’re ripping off this band aid I should clarify a few other items so that both sides can finally have an educated discussion about the PFD moving forward. I no longer care if you insist that reducing the PFD is called a “tax” on Alaskans. You win, it’s a tax, it’s a tax, it’s a tax. Do we all feel better now?
While we’re at it, I also no longer care if you call it socialism, welfare, universal basic income or whether you need to call it a “check from government” verses a “government check” (believe it or not, the “burn the state down and give me my full PFD” crowd truly believes there’s a difference between those two).
Call it whatever you want. It no longer matters. We are way beyond arguing over naming rights. We as Alaskans should now only care about what the math looks like moving forward and where we are financially as a state. I will also point out here, and probably several other times in the column, that a full PFD of about $4,000 would cost $2.5 BILLION.
The entire UGF operating budget (without the actual $1,000 PFD Alaskans will receive this month) is about $5.5 billion. UGF is unrestricted general funds which is funded through the percent of market value (POMV) draw from the Permanent Fund and oil revenues.
Before we move forward let’s set some ground rules. Uttering the terms “right sizing government” or “across the board cuts” to justify a full PFD automatically disqualifies someone from being a legitimate candidate – unless you are willing to show your work. And we’re not going to let you slide by with a rosy, vague statement and then move on.
I want to actually see your spreadsheet that shows how you will pay for government plus a full PFD, and what your revenue sources are. We allowed the current governor to get away with this fairy tale with zero pushback through two elections over the past seven years. I’m pretty sure he won’t break that record in year eight this December.
He basically gave up trying to balance this problem. He has resorted to submitting unbalanced budgets every December which include a full PFD. No new revenues, no serious budget cuts, really no plan at all. His strategy has been to just drain any and all available savings accounts and to hell with the next generation. Fortunately, those in the Legislature can do basic math and never allowed this catastrophic plan to actually get legs.
So let’s look at the actual math problem we face. Legislative Finance has been producing a very informative graph some call the “Ski Slope” graph, which lines up all UGF spending totals by department left to right, largest to smallest.
Eliminating the following departments would save us $1 BILLION in UGF: Transportation, Judiciary (courts), Legislature, Administration, Natural Resources, Law, Fish & Game, Revenue, Governor’s Office, Military & Veterans Affairs, Labor, Environmental Conservation, and Commerce. That is THIRTEEN entire departments and we are still $1.5 BILLION short of paying the full PFD! We’ll categorize this ridiculous concept under “right sizing government”.
After that last paragraph do I really need to do the math on “across the board cuts”? Apparently I do because some candidates say this will also lead to a full PFD.
As I stated above, the entire UGF operating budget is about $5.5 billion. If the 13 departments listed above equal about $1 billion, what makes up the other $4.5 billion? Education, Health & Social Services, Corrections, the University of Alaska and Public Safety and a few small “statewide” expenditure categories. So, instead of eliminating the 13 departments we could do a 20% across the board cut of the entire UGF budget and generate about the same $1 billion in savings.
Can the operating budget be reduced? Absolutely. And I think significantly. I stated in a previous Landmine column that the entire budget has been built up to a ridiculous level over decades using “free money” and without actual participation from Alaskans.
We’ve been very fortunate as a state since oil revenues have paid for the entire budget. Those revenues have fallen off precipitously and backfilling dollar-for-dollar through income and sales taxes would cripple the economy.
The budget must, and will be reduced, voluntarily or involuntarily, but I doubt it will be in the next session heading into an election. I believe the state will have to literally run out of money, including draining the Earnings Reserve Account, the Power Cost Equalization fund, the higher education fund, and the hundreds of millions the Alaska Industrial Development and Export Authority is sitting on before sanity prevails on the spending side of the house. But that’s an entirely different column.
This isn’t directed only at candidates running to be governor. I’m not letting the gentleman that provides a Friday column each week to the Landmine off the hook either. How about showing your math too, and be very specific please. We need $2.5 billion for the full PFD that you have been beating the drum on for years now. And guess what? I agree with you that the PFD issue should have been settled in 2018 when the POMV was put in place but it wasn’t so we must all face reality and deal with it.
Please lay out in detail what sort of combination of oil tax increases, income taxes, and sales taxes will you present in order to extract $2.5 BILLION from Alaskans and companies doing business here so we can just turn around and hand it back out as government checks.
I’ve heard you specifically say the oil companies “have an extra $400 million or $500 million they can contribute.” Is that capital they won’t then invest in Alaska? Details please. I won’t insult him by including the options of “across the board cuts” and “right sizing government” since he should be smart enough to realize those are rounding errors when we are trying to find $2.5 BILLION in the state couch cushions.
I realize I come off as a little gruff but I’m fed up with false statements by politicians leading to false hopes for Alaskans and poor decision making on the state budget. I can’t imagine looking a young couple with two kids in the eye and telling them I will get them $16,000 in PFDs if you just cast your vote for me to be governor knowing that is a lie and not possible. How sad.
We had been given an incredibly long runway over the past decade with all the tools we needed to fix our own mess. We needed to make some tough decisions to bring this fiscal situation in for a soft landing. We failed miserably and future generations will pay dearly for our lack of decision making.
I find it pathetic that some will promise full PFDs knowing that the math doesn’t work. But getting elected is the holy grail and they’ll deal with the consequences later. I don’t remember the specific item but I do recall Bill Clinton doing just that. It seemed like he had only been in office a few days when he addressed the nation by saying, “I’ve worked harder in the last few days than I have in my entire life, but the numbers are worse than I anticipated…” blah, blah, blah.
Is that what we can expect from those promising a full PFD? Do they truly believe a full PFD can be achieved? Or can they do simple math and already know a full PFD is mathematically out of the question? There’s a very simple way to flush them out. Insist that they show their math. If they can’t (or won’t), then you have your answer.
Bruce Tangeman has been an Alaska resident for 34 years and currently calls Anchorage home. He has served in a variety of leadership positions inside and outside of state government, including as Governor Dunleavy’s first Revenue commissioner. He has also served as vice president and CFO of the Alaska Gasline Development Corp., deputy commissioner for Department of Revenue, CFO of Doyon Utilities, and a fiscal and budget officer for legislative and executive branch divisions.
Here’s the math. Done. https://alaskalandmine.com/landmines/brad-keithleys-chart-of-the-week-yeah-and-that-would-be-a-good-thing/
Your linked article doesn’t provide the new revenue or budget cuts to get to $2.5 billion that Bruce called you out on. It just says don’t cut the PFD and refers to a lot of groups saying there is a problem. Do you have actual ideas on how to get to $2.5 billion for full pfd’s?
Exactly, Jack! I think he agrees with something broad, that doesn’t favor a specific group, and isn’t the PFD (which would be more regressive). I’m guessing we’re “getting warmer” with income tax and sales tax. …Brad, do you think your weekly column could include a straightforward “Brad’s Plan”? It feels like we are playing “I spy” with what the solution is.
Any candidate for governor, House, or Senate that uses the words “income tax” or “sales tax” before doing away with the Permanent Fund Dividend (PFD) are not serious candidates and need not apply.
The Ship of State is going to run hard aground when the revenue stream is finally exhausted. Too bad, really, because we still have the resources to stabilize the annual budget and provide a modest Dividend. The first thing to do would be to make the Dividend a tax-exempt or tax-deferred benefit such as a 401k contribution. The second thing is to reduce the maximum draw from the PF at 4% annually with a POMV Constitutional Amendment. Most every financial expert has recommended it. Politically, the voters need to be convinced that there will be a lasting benefit to these… Read more »
Funny you mention Clinton. The last time the US Government had a balanced budget was fiscal years 1998-2001. Prior to that was 1969. So sure, it took him 6 years to get there but he did it. We’ve been operating in the red the past 24 years since.
Five years. Clinton’s first budget was FY94.
Our current national debt is Bin Laden’s greatest triumph.
“…….. it took him 6 years to get there but he did it………”
He didn’t do it. The Republican Congress elected in the 1994 Republican Revolution did it. He had no choice but to sign it. We can thank Newt Gingrich for those balanced budgets.
Ha ha ha ha!
Since when are the Rs interested in balancing the budget?
“Deficits don’t matter” Dick Cheney
If you think any Republican recognizes or looks upon a Cheney as being one of us, you couldn’t be more out of touch as to what the average person of a particular political persuasion thinks or who their icons are these days… try reading things just over the last ten years if you can lol
Speaking of the last 10 years, then, it is impossible to show any effort whatsoever that the Rs are trying to balance the federal budget.
Not going to disagree – congressional majorities and the executive for nearly 30 years for BOTH parties have virtually made no effort to balance the budget, some worse than others, but does it really matter?
My point for you John is that if you’re gonna go after one of the two parties and highlight a quote to point out their hypocrisy, pick an actual and credible figure that someone like me (an authentic Republican) can’t argue with you as much, that’s all, don’t pick a Dick… (pun intended)
Did I mention Cheney? I specifically mentioned Gingrich. Please review AI statement: “During the 104th Congress (1995–1996), a balanced budget was a top Republican priority, led by the “Contract with America”. While the Republican-controlled House of Representatives passed a constitutional amendment requiring a balanced budget, it failed by a single vote in the Senate. House of Representatives passes amendment In January 1995, just weeks into the new Congress, the House passed a constitutional amendment (H.J. Res 1) that aimed to mandate a balanced federal budget. It passed with a bipartisan 300–132 vote, well over the two-thirds majority required for a… Read more »
Knowing full well that his “full” PFD promise was politically impossible, Alaskans elected Mike Dunleavy. TWICE!
So the notion that “math” will suddenly enlighten Alaska’s voters to wise up and reject a candidate who repeats his scam pledge is wildly naive.
Because there might be a distracting transgender shotputter nearby.
I don’t agree that Alaska voters knew “full well” that Dunleavy’s “full” PFD promise was politically impossible. I reckon a great many Alaska voters don’t know jack shit about state government–what the departments and their budgets are–and, instead of educating themselves, prefer to think that greedy politicians stole their PFD.
Agreed. Same result, different paths.
If political visionaries like you and Dan are so good at seeing the forest for the trees, how come the candidates you do support didn’t defeat Dunleavy two times? Could it be that people consider other topics/issues and maybe even read more into the other candidates than you would like to believe? You can perceive the potential for this no?
Because Dunleavy promised them free money he knew he couldn’t deliver.
And Alaskans who are different from Mark Begich supporters and Walker supporters and Gara supporters fall for that.
Right… Dan aren’t you the one who always has to make it a point on each thread that if someone say’s something even slightly snarky, it’s your knee-jerk reaction to accuse of them of avoiding your argument and only being capable of hailing personal attacks, as you deem all persons to the right of your POV as just red-cap wearing, knuckle dragging ogres? I’ve seen you do this consistently on every piece you comment on and receive subsequent push-back on, and it’s tiring. Now you just insinuated again that all Alaskan’s who voted for Dunleavy are idiots who made a… Read more »
This of course assumes that the PFD is government income, which it has never been. The PFD dividends are for the PEOPLE because the mineral wealth of the state belongs to the PEOPLE and not the government. That’s in the state constitution. The government raided it under Walker, but that is illegal, and the fact that nobody has successfully sued the government for the rights of the PEOPLE is a travesty. The government seems to think they can spend like drunken sailors for things we just plain don’t need, so long as they can steal from the PEOPLE to do… Read more »
This of course assumes that the PFD is government income . . . .” Tamra Nygaard Nope. The Permanent Fund is government money, collected from taxpayers. Not yours, the state’s. Mostly tax money from private corporations who contract with the state for the right to exploit the state’s natural resources. The PFD is not the Permanent Fund. The PFD is an annual welfare payment that Alaska’s legislature can but need not pay from the state budget in an amount of the legislature’s choosing to those it deems worthy, if any, subject to governor’s veto and many legal limitations. You apparently… Read more »
That’s cute, it really is. But if you were to read the laws that established the Permanent Fund, you would find that it is based upon the state constitution granting the mineral rights of the state to the citizens of Alaska. Pretty darn sure no courthouses, rail cars, or bike racks were listed in my comment, but I guess you have to be an ass about it and act like I’m some kind of idiot. I do hope it made you feel better about yourself. Now, go lay down by your dish.
Nope.
“The legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people.”
-Alaska Constitution, Art. VIII, Sec. 2
The resources belong to the STATE.
And the legislature’s job including managing those resources for the “benefit of [the state’s] people.”
And it’s the legislature that decides whether that benefit is welfare checks or troopers or schools or geologists or roads or docks or anything else the state could provide for the “benefit of its people.”
So sayeth Alaska’s constitution.
You’re proving my point, below, the whole “steal” motif. Please enumerate those things “we just plain don’t need.”
Bruce writes, “…we’re not going to let you slide by with a rosy, vague statement…” I don’t know who the we are in Bruce’s sentence, because that’s exactly what we, the voters, have done, twice, in response to Dunleavy’s empty full PFD promises. “Right sizing” and “across the board cuts” play into the (unfortunately very common) voter misconception that “they’re all crooks” and “they’re stealing our PFD!” Lack of elected officials’ political courage and leadership isn’t the underlying problem. Voter (willful) ignorance is. If voters understood or better understood state government–including how it serves them–it wouldn’t take political courage to… Read more »
Speedo just fall on the sword & get it over with, is a better way to say that!
Well said, Speedo.
Without lies further down the trail, being second lead DOG smelling the leads behind your right Bruce ! That is to only one fact ,self admission ” I realize I come off as a little gruff but I’m fed up with false statements by politicians leading to false hopes for Alaskans and poor decision making on the state budget.”, So where is or was there any accoutability in your previous positions in Government when you went along with the BS, when you were in control and was within your wheelhouse? Ya another reality check? I would never stay in second… Read more »
Assuming these “full PFD” candidates were even living here when SB21 went into effect, they probably voted twice against its repeal. Twice! Assuming they even voted. Anyone so stupid as to believe they deserve a full payout when they don’t understand the part of Alaska’s Constitution that says Alaska is required to maximize revenue from the sale of natural resources is too dumb to be governor.
Greg Svendsen
The PFD was never meant to be an entitlement. It was meant to support the state government. Can you imagine where we would be if we had never had a PFD and all the money had gone into the fund. It would be like Norway with a fund worth 1 trillion or more and would support government for eternity benefiting all Alaskans not just those of us around during oil production.
“The PFD was never meant to be an entitlement. It was meant to support the state government.”
Citation, please?
How does the pfD support state government?
The pfD is not the Permanent Fund.
I didn’t read the full article. It’s embarrassing to know that people can’t see the potential extreme wealth this state has. Traditional people have to move forward with thinking of the future because of technology. We need people up here with the latest non-invasive mining technology available on the planet to extract the mineral wealth without destroying the environment. There is no reason for the native population to ever need financial help. Alaska belongs to the native people. I believe in the near future we will have the technology to heal the planet but for now we have to deal… Read more »
I appreciate these reflections. I have just one small correction to offer as you mull over possible solutions to our issues. The federal government purchased Alaska from Russia, and a prior generation of Americans paid for it. The feds didn’t confiscate lands from the state of Alaska. Rather, they granted lands to the new state that other Americans had paid for, and returned some of the lands confiscated by Russia to the indigenous people who had lived here for thousands of years. The federal lands here are owned by current taxpayers all over the nation, who continue to pay to… Read more »
Perfectly said.
“Alaska belongs to the native people.”
It definitely does not. Just look around.