SitNews - Stories in the News - Ketchikan, Alaska

Ketchikan Borough Assembly Considers Urging State to Include Permanent Fund in Fiscal Plan



October 03, 2015
Saturday PM

(SitNews) Ketchikan, Alaska - As Permanent Fund Dividends are being distributed to Alaskans in Ketchikan and around the state this week, the Ketchikan Borough Assembly will consider a resolution urging the State of Alaska to implement a long-range fiscal plan which will include the utilization of Permanent Fund earnings. This resolution is just one of many items on the Borough Assembly's agenda to be discussed Monday, October 5, 2015.

At the current pace of spending, the State is anticipated to drain the Constitutional Budget Reserve and Statutory Budget Reserve account in the years to come. Three primary sources of revenue have been discussed to help bridge the fiscal gap: tapping Permanent Fund earnings, a statewide sales tax and/or an income tax. The Ketchikan Assembly will consider in new business Resolution 2619 which if passed, will encourage the State of Alaska to implement a long-range fiscal plan which, among other things, utilizes Permanent Fund earnings and cuts State spending.

jpg Ketchikan Borough Assembly Considers Urging State to Include Permanent Fund in Fiscal Plan

Borough Assembly Chambers, 1900 First Avenue, Suite 144 (WhiteCliff Building).
Courtesy Google Maps...

A position paper from former Fairbanks Senator Gary Wilken describing the impacts of each fiscal solution on citizens was provided for consideration as well as a document on economic considerations with revenue options from the Alaska Department of Labor and Workforce Development.

According to Sen. Wilken's "Everyone Helps A Little" fiscal plan, $1 billion can be raised for the state's General Fund by:

  • asking middle class working Alaskans to pay $1,700 a year in an income tax, or
  • asking all Alaskans and visitors to pay a sales tax costing $1,990 a year, or
  • the Legislature can draw $1 billion from the Permanent Fund Earning account (ERA) at a cost to every Alaskan of less than $100 the first year and a total cost, over five years, of $172.

According to KGB's Resolution 2619, failure to develop a long-term plan to deal with the fiscal challenges will have serious ramifications for the Alaska economy and is evidenced by the decision by Standard & Poor to lower Alaska's credit outlook from "stable" to "negative" in August. Moody's Investors Service revised its outlook for Alaska in December 2014 from "stable" to reflect a "negative" outlook also.

Alaska House Rules Chairman Craig Johnson (R-Anchorage) said, “Alaska is an owner state, and the dividend represents each Alaskan’s personal stake in the management of our resource wealth." Johnson said the PFD creates an “ownership” interest that helps connect Alaskans to the Permanent Fund and keeps politicians from raiding it.

Representative Johnson said, “Like shareholders in a corporation, Alaskans through the dividend have a stake in what happens to the Permanent Fund.” As a result, Johnson said, politicians are very reluctant to tamper with it. “Anyone thinking about raiding the Permanent Fund knows they’ll have to answer to Alaskans.”

Johnson added that the PFD has become a major economic driver for local economies. “All you have to do is look around,” Johnson said as the PFD is now being distributed. “Stores and restaurants are crowded, people are shopping, fixing their homes, and paying for their children’s education. The economic impact and rollover benefit to our economy and for small businesses is tremendous.”

Johnson stressed that touching the Permanent Fund should be a “last resort” and vowed to protect it. “I don’t support using any portion of the Permanent Fund for government right now. We need to get our fiscal house in order first and make sure all government spending programs have been carefully scrutinized.”

Alaska Senator Bill Wielechowski (D-Anchorage) has again urged the Senate Republican Majority to quickly take up and pass a resolution aimed at enshrining the Permanent Fund Dividend into the Alaska Constitution. Senator Wielechowski filed this resolution back in April 2013. It was not heard in 2013 or 2014. He again filed it in January 2015, yet has still not received a single hearing.

Currently, language in the Alaska Constitution does not define how the Permanent Fund Dividend shall be calculated, nor does it protect the funds eligible for distribution to the Alaskan people from being spent by the Legislature. Senate Joint Resolution 1, pre-filed by Senator Wielechowski on Jan. 21, 2015, would amend the Alaska Constitution to ensure the annual dividends Alaskan families rely on are protected for generations to come. Although a formal hearing request was submitted to the Senate State Affairs Committee on Feb. 3, SJR1 has yet to receive a hearing.

Recognizing Gov. Jay Hammond’s ultimate goal for the Fund’s creation was to ensure every Alaskan benefited from co-owned resource wealth through a dividend program, Senator Wielechowski believes it’s time this is reflected in our Constitution. As with any constitutional amendment, should this resolution pass, the question would be put on the ballot of the next general election for the public to decide.

“Alaskans have come to rely on the Permanent Fund as a way to pay for high energy costs and to make ends meet," said Sen. Wielechowski. "We always hear politicians talk about how they will protect the Permanent Fund. Here's a chance for them to prove it. Let's give the people of Alaska an opportunity to vote to put the PFD in the Constitution - so that our grandkids and their grandkids can be guaranteed to share in the benefits of our incredible oil and gas resources."

In 1976, as the Alaska pipeline construction neared completion, Alaska voters approved a constitutional amendment to establish a dedicated fund owned by the state: the Alaska Permanent Fund.

In 1980, the First Permanent Fund Dividend legislation was enacted establishing a program giving every adult Alaska resident $50 for every year of residency since statehood in 1959 and also established a dividend Fund. Payment of dividends were stayed under litigation (Zobel v Williams) challenging the constitutionality of the program. In 1982, the U.S Supreme Court ruled the 1980 legislation unconstitutional. In response to the litigation, the Alaska legislature passed legislation authorizing equal dividend payments to all six-month residents. The first dividend amount was $1,000. The first dividend checks were distributed June 14, 1982.

The established fund placed at least 25 percent of all mineral lease rentals, royalties, royalty sales proceeds, federal mineral revenue-sharing payments and bonuses received by the state in a permanent fund, the principal of "which may only be used for income-producing investments".

The Alaska Constitution states that the Fund's principal cannot be spent and the dividend can only be paid from Fund earnings allowing only five percent of the Fund's total market value to be paid out each year as PFD.

At a market value of $51 billion, the fund has been successful over the years because is has not been used as an economic development bank.

The Ketchikan Borough Assembly will meet in the Borough Assembly Chambers, 1900 First Avenue, Suite 144 (WhiteCliff Building). The meeting is scheduled to begin at 5:30 PM. The public is invited to attend.




On the Web:

October 5, 2015 Ketchikan Borough Assembly Meeting
Agenda & Information Packets

Gary Wilken - "Everyone Helps A Little" fiscal plan

Economic Considerations with Revenue Options


Source of News:

Ketchikan Gateway Borough

Office of Senator Bill Wielechowski


Publish A Letter in SitNews

Contact the Editor

SitNews ©2015
Stories In The News
Ketchikan, Alaska

 Articles & photographs that appear in SitNews may be protected by copyright and may not be reprinted without written permission from and payment of any required fees to the proper sources.

E-mail your news & photos to

Photographers choosing to submit photographs for publication to SitNews are in doing so granting their permission for publication and for archiving. SitNews does not sell photographs. All requests for purchasing a photograph will be emailed to the photographer.