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Last updated
Sept 15, 1999
Election Results
Save Your PFD
Sept 14, 1999
Who is paying
for YES vote
Table Of Contents
Back to the drawing board. On September 14 we are asked to approve an advisory vote to tax our permanent fund dividend. This is the worst of all possible taxes. It's a regressive head tax that would confiscate at least $360 (some estimates go to $516) from the individual dividend of every man, woman and child.
This terrible tax squeezes $2,160 from a family of six living in Chevak on subsistence, but only $360 from an attorney making a quarter million a year.
Out-of-state workers will pay $0, but the dividend tax takes $720 from fixed income retirees living on a homestead in Willow.
An Anchorage millionaire pays $360; the single waitress with three kids pays $1,440 - that is wrong.
It's your money. The Permanent Fund dividend is not free money, it is your money. You earn it from money deposited in the Permanent Fund that you voted to save and invest.
It's your money because you are the landowner of Prudhoe Bay. The land is yours; government just manages it for you. If you were the landowner in Kansas you would receive 100 percent of the royalty payments. Government gets taxes, but not royalties. The royalty belongs to the individual, the state collects corporate, personal and severance taxes.
Vote Yes -- kiss dividend good-bye? The constitution protects the Permanent Fund, but the dividend can be changed at any time by a simple majority vote of the legislature. A constitutional amendment could have protected even a smaller dividend, but the September 14 vote offers no constitutional protection. This advisory vote could give the green light to start taking your dividend with no guarantee, absolutely no protection, for whatever is left.
How much is enough? Since 1969, Alaskan government collected $22 billion on royalties on your oil and gas. Of your $22 billion, $8.5 went into the Permanent Fund created by a vote of the people. You voted to amend the constitution to require that at least 25 percent of the royalty payments be saved in the principal of the Permanent Fund. The State intercepts (or taxes) 50-75 percent of your royalties and spends it on government services each year. That means $13.5 billion of your royalty payments were taken - that is, taxed -- by government and spent.
And people argue individual Alaskans don't pay taxes!
Since 1969 our government also collected and spent almost $59 billion from traditional taxes on oil and gas development. (Legislative Research Services, March 1999)
The Budget cut to the bone...Say again? We heard the Governor propose a budget with at least 400 additional employees. The legislature cut the Governor's increases, but still state employees increased by more than 150 this year. In Anchorage, compared to last year, the number of state employees is up more than 6 percent (Anchorage Economic Development Corporation). Real reductions in spending this year appear to be about 1 percent of the general fund budget ($22 million out of $2.3 billion), yet at the time we faced a deficit of nearly 35 percent! Obviously not everything has been done that can be done to reduce state spending.
Houston, we have a spending problem. Using traditional taxes - not one-time oil and gas revenue -- it is impossible to fuel the current $2.3 billion general fund budget. To get that kind of money we would need a 25 percent state sales tax or a 19 percent state income tax! That is on top of federal and local taxes. Traditional taxes could never - ever - pay for the current outlandish cost of state government.
A tax-free alternative. Why vote for any new taxes while billions of public dollars go untouched that are currently used for business loan guarantees the Alaska Industrial, Development and Export Authority (AIDEA), subsidies from the Alaska Housing Finance Corporation (AHFC), grants from the Alaska Science and Technology Foundation (ASTF) or the Alaska Railroad (ARRC) - all state-owned entities? We have billions available in the Constitutional Budget Reserve.
New facts. There is no immediate threat requiring this drastic dividend tax…or any new tax. Since the dividend tax was proposed, the price of oil has shot up and the projected deficit shot down. BP's radio ads predict spending $5 billion over five years to find more oil. The production decline may or may not be as severe as earlier projected.
Friends and neighborhoods can disagree. We are a small state, many of us consider members of the legislature friends and all are neighbors. It's easy to criticize politicians, but we should be proud of the men and women who dedicate so much time away from family and careers to serving us.
Admiration for their dedication and public service doesn't mean Alaskans have to agree on everything.
The worst choice. There are many choices that still could be made to address our very real state spending problem. The worst is to take part or all of the individual permanent fund dividend in this way.

Vote NO on September 14 and politely urge our legislative friends to go back to the drawing board.

Respectfully submitted,
Tuckerman Babcock
Co-Chair, Save Your Dividend, Mat-Su
1830 East Parks Highway, PMB 332
Wasilla, AK 99654
907-229-0364 staff
907-746-7634 hm/fax
This editorial in MS Word document
Supporters of Vote


Elected officials
  • Gov. Jay Hammond
  • Sen. Dave Donely
  • Sen. Lyda Green
  • Sen. Rick Halford
  • Sen. Robin Taylor
  • Sen. Jerry Ward
  • Rep Mary Sattler Kapsner
  • Rep Vic Kohring
  • Rep. Bev Masek
  • Rep Scott Ogan
  • Rep Jerry Sanders
  • Doyle Holmes, Assby.
  • Mayor Sarah Palin
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