The Permanent Fund, including the Earnings Reserve Account (ER), does NOT belong to Governor Walker, the Sovereign State, the Legislature or any individual, UNTIL it is legally appropriated by the legislature as a PFD.
Before the PFD check is written, the ER money belongs to the “people” of Alaska as defined in Article 1, Section 2 of the constitution. (The spending and purpose of the permanent fund is restricted in Article 9, Section 15.)
- An Individual investor normally “owns” his or her investment (in this case the PF corpus) as well as any return on their investment (profit or loss). This common sense is also true of the ER.
- The Investment manager (in this case ultimately the legislature) does not have the option of spending the investment returns without
- the permission of the owner… no matter how badly they may want to, …no matter what they may ‘need’, or no matter what wonderful thing could be done with the money. This common sense is arguably also true of the ER.
Arguably*, all or part of the investment earnings (ER) cannot simply be taken without the specific consent of informed people of Alaska. Nothing but a vote of informed Alaskans should authorize legislative appropriation of this money.
To avoid a political debate, those who benefit most directly from sovereign spending have used smoke and mirrors to convince many Alaskans they have not been paying a fair share of taxes and should therefore allow them to siphon revenue from the ER in lieu of taxes. This ignores the fact that Alaskan’s natural resources have underwritten more than 80 Billion over the past 40 years.
The goal is to allow for all or part of $8+ Billion in the ER to be deemed “Unrestricted” so the money can be vulnerable to influenced by ‘heavyweight’ spending advocates. We are told it is time to:
- “Restructure the Permanent Fund”,
- “Cap the PFD”, or even
- “Preserve” (or “Protect”) the PFD. (…drain some gas out of your gas tank so you can travel farther!!??)
These sound bites may represent some noble elements, but they all have one ignoble thing in common; the siphoning of a portion of the ER to be spent as unrestricted general funding, something legislatures have largely avoided over the history of the PF.
Siphoning money from the ER into the general fund is a very bad idea – it demeans the value of individual ownership and responsibility and further erodes Alaskan’s sense of ownership of the natural resources and the government they have been funding.
* I use the term “arguably” because there are clearly those who disagree. I am not an attorney but am appealing for application of plain language of the constitution and the implied intent of Alaskan forefathers and the laws they put in place (by previous legislators and governors), to provide a real return (the PFD) to Alaskans to parallel sustainable programs, infrastructure, and services that are paid for with the other 75% of returns from natural resources.
It is sobering to realize that the argument must be made in blogs like this instead of in a proper court of law. Keep in mind the “people” have no designated attorney to make this argument! The Alaska Attorney General is appointed by, and serves at the pleasure of, the Governor who apparently disagrees. If this ever goes to court, we would have a shocking conflict of interest issue to deal with.