Lawsuit Filed Friday over PFD cut
September 17, 2016
Former State Senate President Rick Halford (R) is well-respected for his role as a political leader in Alaska. Clem Tillion was one of Gov. Jay Hammond's Republican legislative allies when the Alaska Permanent Fund was established in the 1970s. Wielechowski wrote his letter was posted on his FaceBook page in order "to speak directly to you [Alaskans], without the filter of the media or hearsay." "We don’t take the decision to file a lawsuit to protect the PFD lightly, but after weeks of serious consideration and feedback from Alaskans, I feel that we must," wrote Wielechowski. "We’re filing this lawsuit [Friday] because Alaska needs an answer. We need to know who decides the amount of the Dividend, a governor or the legislature? At a time when we are once again being asked to give up our Dividends, I think it’s critical that we look to the courts for resolution to this question now," wrote Wielechowski. Wielechowski wrote, "Hundreds of hours of research leads me to conclude that the Governor does not have the authority to cut Dividends in the way he proposes, and I’ll explain why. The resolution that created the Permanent Fund in 1976 was hotly debated in the legislature. Through many hours of research and listening to recordings of those conversations, it’s clear to me that the constitutional amendment that created the Permanent Fund was crafted to allow the legislature to determine how the income of the Permanent Fund was spent. The legislature enacted a law based on that constitutional directive which said that a transfer of money occurs to pay Dividends to the people of Alaska. Here’s the crux: the Governor cannot veto existing law. No governor can. His veto power extends only to appropriations and bills. The lawsuit we’re filing on behalf of the people of Alaska simply calls on the Permanent Fund Corporation to follow that existing law, and initiate the transfer." Governor Bill Walker responded to the announcement in a prepared statement saying, “As most Alaskans realize, and as stated by the legislature’s own financial advisor, our state is in the midst of the gravest financial crisis in our history. We are in a $3.2 billion deficit now." Walker said, "It is truly unfortunate that our legislature failed to pass a sustainable fiscal plan, like the one we submitted this past year, to protect and grow the permanent fund dividend program. Instead, this continued lack of action will result in the elimination of the PFD program in just a few years." "This year’s PFD is close to the historical average paid to every eligible Alaskan since 1982. It was set at a level that could be sustained as part of a larger fiscal solution - to ensure a PFD program continues for generations to come. The amount that was vetoed remains in the Permanent Fund reserve/savings account for future distributions," said Walker. The Governor said, "I’m disappointed that an incumbent legislator who failed to work towards a solution to our fiscal crisis—a solution that would protect the long-term viability of the PFD—has decided instead to pursue this lawsuit eight weeks prior to his re-election bid. This suit detracts from the real issue: solving Alaska’s fiscal crisis so we can then begin to grow Alaska." "[Friday], a former legislator compared our current situation to that in the 1990s. That’s misleading," said Walker. "In the 1990s, we had approximately 2 million barrels of oil a day going through the Trans Alaska Pipeline System (TAPS). Today, the TAPS throughput is about a half-million barrels a day. That’s a huge difference in the potential for an economic rebound. In the 1990s, we were not facing a $3.2 billion deficit and drawing down on our savings at a rate of $12 million a day. Relying on a 1990s-type rebound is very, very risky." Walker said he will stand by his "difficult but necessary decision - prompted by the legislature’s failure to pass a fiscal plan - to veto part of this year’s dividend appropriation to preserve our PFD program and other financial resources for this and all future generations of Alaskans.” Senator Wielechowski wrote, "There’s no doubt about the severity of the crisis Alaska currently faces. We need new revenue, or to dramatically shrink state government, and we need it within the next year or so. These are facts. But what’s critically important to remember about the Dividend is its spending power. During a fiscal crisis, the last thing we should be doing is pulling $700 million straight out of our economy, and that’s just what cutting the Dividend would do. There are other places we can cut, or raise new revenue that we must explore before we look to our most precious asset, the Permanent Fund. Also realize that paying out a full Dividend doesn’t mean that the legislature, along with the governor, can’t pass a law that allows for a small portion of the income to flow elsewhere. Dividends and protection of the Fund, though, must come first." "The PFD remains the most direct infusion of cash by Alaska into the economy," wrote Wielechowski. "The best part? It’s spent by you, the people of Alaska, how you see fit. You make the decisions. And those decisions tie you to the state and to your government in a way that I think is extremely powerful and, again, special." "Alaskans deserve to know who sets their Dividend." wrote Wielechowski.
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Reporting & Editing by Mary Kauffman, SitNews
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