Is the Permanent Fund still the third rail of Alaska politics?

Published: May. 11, 2018 at 3:58 PM AKDT
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The Permanent Fund used to be called the “third rail” of Alaska politics — touch it and you’re dead, or at least retired from office by the voters.

But is that still true?

This year, for the first time, the Legislature is using Permanent Fund earnings to pay nearly $2 billion toward the expenses of state government. At the same time, Gov. Bill Walker and the Legislature have paid lower dividends for three years running than the dividend calculation law would mandate. And the Legislature just passed Senate Bill 26, which would allow lawmakers to take 5.25 percent of the Permanent Fund from its earnings reserve for state expenses and the dividend for three years, then five percent after that.

And almost none of the lawmakers are acting like they received a shock from the third rail.

Just 20 years ago, in 1999, more than 83 percent of Alaska voters rejected using the Permanent Fund for state government in an advisory ballot measure. The state economy looked grim too when the advisory vote was approved.

The statewide organization Permanent Fund Defenders hopes to rekindle that spirit among voters. One of its leaders, Juneau attorney Joe Geldhof, was an Anchorage Thursday and said Alaskans should elect legislators who would put a constitutional amendment on the ballot which would require the state to pay dividends.

“The current politicians have shown they are unable and unwilling to follow existing law that requires (dividend) distribution,” Geldhof said. “They’ve found workarounds through the budget process to not pay what the statute says. The only way we can prevent them from jimmying the Permanent Fund dividend to every Alaskan is to put it in the Constitution.”

Sen. Bill Wielechowski, D-Anchorage, has tried to pass a dividend amendment, but the state Senate wouldn’t move it.

The state’s founders made it difficult to approve an amendment. It first must win support of two-thirds of the 40-member House and 20-member Senate, then be approved by a majority of voters. A constitutional convention can also amend the constitution, but a convention would open up other issues as well.

Geldhof says it’s time for voters to hold elected officials accountable.

“The people who actually vote have got to say to the politicians, ‘If you don’t agree to put the Permanent Fund dividend in the Constitution, you are facing an existential political threat' — by which I mean, 'I’m not ever going to vote for you again.' ”

Legislators, though, say they are acting responsibly. With oil prices and production down from historic highs, oil taxes won’t pay for state government like they used to, and another source of money is needed.

The Senate has rejected taxes proposed by the House, and both bodies and Gov. Walker have cut expenses from their high points.

The Permanent Fund isn’t a sacred cow, they say, and was designed to store the state’s oil and mineral wealth as cash for a time when taxes wouldn’t cover expenses. And the principal of the fund is already protected in the Constitution, they note — they’re just spending investment earnings as the law allows.