Alaska's Oil Dividend Wins Vote, Remains Intact
Geoist Economic Policy Was In Danger
| Did you know that the Citizens Dividend in Alaska was put to a vote last month? Private oil companies wanted a larger share of the natural resource value that currently goes to every Alaska citizen as an annual dividend. The companies and their cronies promoted a plan to cut the dividend. Despite heavy spending by the monopolists, and phrasing it so that a "yes" vote would slash the dividend, the plan was rejected by an overwhelming majority on September 14. The "Permanent Fund Dividend" (PFD) is alive and well. Here, slightly edited, is some pre-vote commentary by a dividend supporter. |
Slashing the Dividend Would Harm Equity and Economics in Local Communities
by Niilo Koponen
One of the strongest social policy indictments made against US state governments is the unacceptable condition of children who are born into and grow up in absolute poverty. Alaska is THE exception to that rule.
Every Alaskan child shares equally with every other Alaskan (rich or poor, young or old) in the income produced by the sale of Alaska's oil and other mineral resources. Though great disparities of wealth exist (survey figures have shown that about 11 percent of Anchorage residents have incomes in excess of $100,000 annually), no Alaskan is completely destitute and the state's income distribution is more democratic (and middle income) than most of the other states.
The dividend is not large, but since it is not dribbled out in small amounts like welfare or unemployment checks, it can contribute to major purchases, such as a second-hand car to provide transportation to work/repair a house/pay medical bills/education and/or job training. It also does not require a demeaning means test or endless interaction with any bureaucracy, public or private. For middle income folks, it may provide the opportunity to visit a vacation spot Outside (provided, of course, that you can also afford the hotel and other costs involved). But that itself provides airlines with the incentive to expand services to Alaska (and the jobs that that creates).
Poor people spend their money locally. Almost all of the PFD dollars represent income to local merchants, wages to their employees and increased seasonal employment. What will the impact of the proposed PFD cut be -- both in the first instance and in the long run -- if a "YES" vote is seen as approving the use of the PF income stream for the general budget of the state? Legislative Research reports indicate that if the proposed cut is made in next years PFDividend, there will be in excess of $100 million LESS money in circulation in Anchorage alone, during the busiest shopping season of the year! The Fairbanks market (where there are vacant store buildings already) will see about forty million dollars less available to be spent by potential customers. Juneau merchants will find their customers to be about $17 million dollars poorer -- and that much less likely to spend.
The effect of the PFD cut would be sharply deflationary, decreasing employment in the private sector and forcing many smaller, locally owned and operated businesses into bankruptcy. It would be most unpleasant to watch someone commit "hari-kari" but it now appears this may occur. In supporting the "VOTE YES" machine, local Chambers of Commerce, solicitous of the "feelings" of transnational corporations, seem intent on polishing their knives and exposing their bellies.
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Thanks to Dae Miles and Douglas Yates for passing this news along.
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