It’s PFD time here in Alaska with the dispersal of $1,022 per person to qualifying Alaskans taking place on Oct. 6. Big screen TVs, cars, furniture sales and all sorts of other deals wait to entice buyers to spend that extra cash quickly. It’s like Christmas in October!
But, it’s not all roses. Controversy surrounds this year’s dividend. It’s been shall we say…heated.
If you are from Alaska, you know the turmoil boiling regarding the payout. If you aren’t here’s a brief summary.
The PFD is not a personal floatation device, although for some, that metaphor may apply. Simply, the Alaska Permanent Fund was established in 1976 with a goal to invest a percentage of oil revenue and other profits, allowing it to grow. A portion of the yearly dividend is split off and given back to Alaskans. The amount varies from year to year based on an average of the last five years.
This year, Alaska (like much of the rest of the USA) is experiencing a significant budget deficit, so our Governor capped the payout at $1,000. If he hadn’t, the payout would have been ~ $2,050 per person. The plan is to use the remainder held back for the state budget.
Alaska has ~$4 billion budget deficit, or ~2/3 of the whole state budget. The shortfall is in large part due to the decline in oil production and price per barrel. Alaska relies heavily on this revenue to fund the state. We don’t have a state income tax, or state sales tax (there are some boroughs with sales tax).
We are on a slippery slide down the North Slope.
What’s the Answer?
I don’t know. But, I worry that cutting the PFD hurts those Alaskans who depend on it as part of their income, especially in the rural areas where the cost of living is much higher.
What I do know is I am sick and tired of politicians gridlocked, wasting money and taxpayer dollars while coming to no viable solution. Take our national debt of ~ $20 trillion. Does anyone in their right mind believe we will ever pay that back? And tell me Washington, do you really not see what will happen to the national economy if this isn’t fixed?
Let me give you a hint….THE COUNTRY’S TENUOUS FINANCIAL BALANCE WILL COLLAPSE!
It’s the fault of both parties in my opinion. Politicians don’t do the work they were elected to do together. Instead, they bicker and fight, going nowhere, while throwing away our hard earned tax dollars! They put a Hawaiian pit pork roast to shame! It’s the same thing here in Alaska.
If I managed our finances like government does, I’d be in jail with banks and the IRS threatening to hang me and sell my children. (No I don’t really believe they could do that but you get the picture.)
We are required to be fiscally responsible, why aren’t our federal and state governments. I’m furious! This is my children’s future!
The Privilege of Living in Alaska
The solution to Alaska’s problems will require adjustments on both sides.
Alaska is notoriously high on the list in government money spent per resident. So cut the budget and address the oil company perks. On top of that, the ~750,000 people who live here will have to contribute in some way for our privilege of living here. And that may mean a state income tax, or sales tax. The trick is to make it fair so as not to punish the most vulnerable.
Alaska’s economy needs to diversify so that it isn’t so reliant on oil. Can we do it? I don’t know. Politicians can’t seem to get away from relying on that revenue. I hope that the path we take as a state leads to prosperity and security for all Alaskans.
I am willing to pay my fair share to live here as long as it is spent responsibly. As for the PFD, I have mixed emotions. Ours will go into savings, and thanks Alaska. However, I’d give it up in a heartbeat for a financially secure state.