A constitutional dividend?
from The Anchorage PRESS: When the question of whether to put the Permanent Fund—the money collected from oil and gas revenues and invested in stocks—into Alaska’s constitution was put to voters, the 1976 Election Pamphlet stated, “Today as the result of anticipated oil and gas revenues, Alaska stands on the brink of unprecedented prosperity. No one, but no one, argues that these non-renewable resources will last but for a few decades. Similarly, no one should fail to recognize that in those years ahead the cost of state government will continue to spiral upwards. Now is the time to ask ourselves the question: When the oil and gas is depleted, where will the funds to feed our giant government come from? The answer: the Permanent Fund.”
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If oil and gas revenues decline as expected in the next few years, state government will have to look elsewhere to fund itself; using income from the Permanent Fund is one idea that’s been discussed, as well as a state income tax. French and Crawford want to take the Permanent Fund dividends out of that discussion.
“Think how this works for an upper income person,” French said later that afternoon. “Faced with a shortfall, someone proposes an income tax, let’s say 5 percent. You’re going to pay 5 percent on your income of $100,000, so you’ll pay $5,000. Well, why not just take my dividend of $1,500, take it from everybody, and take care of the problem? Well, it seems like a good idea until the person making $10,000 a year is also giving up a $1,500 dividend. It’s a kick in the head to that person; it’s a trip to Hawaii for the first person.”
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