Alaska: A Welfare State?

[BeFree]

Seems Alaska gets $22,000 per person from the federal govt. And Alaska will pay you $1G just to move there, and gives each resident 1000's a year.

And all that money comes from the other 49 states.

[Blue_In_AK]

1. An explanation of the Alaska Permanent Fund

for the uninformed.

http://progressivealaska.blogspot.com/2008/09/alaskas-permanent-fund-explained-for.html

-- by Dennis Harris

Phil says that he's had many queries regarding the Alaska Permanent Fund Dividend program. Apparently much misinformation regarding the Dividend is circulating Outside. Some folks seem to think that the payments might increase the prices they pay for gasoline or heating fuel.

The Alaska Permanent Fund Corporation was created by an amendment to the Alaska Constitution in 1976, in order to retain and invest a portion of the State's income from non-renewable resources (gas, oil, and minerals) so that when those resources were exhausted, the income from investing that revenue could be used to finance government activities and programs.

At least 25% of oil, gas, & mineral production taxes and royalties must be deposited in the Fund, and the Legislature has appropriated additional amounts to the Fund's principal from time to time. The fund's value is currently about $35 billion. For details about the Fund's investments, click here. http://www.apfc.org/home/Content/home/index.cfm

The Permanent Fund Dividend program was proposed by the late Governor Jay Hammond and passed by the Alaska Legislature in 1980, in order to ensure that Alaska citizens retained an active interest in the Fund and its growth, and to discourage future Legislatures from spending the principal of the Fund or investing it in risky ventures. Click here for information about the Dividend program. http://www.pfd.state.ak.us/index.aspx

Alaskans who reside in the state for one year or more, and who spend less than 90 days outside Alaska (with exceptions for students, military services members, employees or members of the Congressional delegation,and a few others) are eligible to apply for the annual dividend, which is paid from part of the Fund's earnings (most earnings are retained and re-invested for fund growth and inflation proofing).

The amount of the annual dividend payment varies from year to year, and is based on the Fund's rate of return on investments over the previous five years. The 2008 payment that many Alaskans received by direct deposit to their bank accounts on Friday, September 12, was $2,069.00, the highest dividend paid to date.

Alaskans pay some of the highest gasoline and fuel oil prices in the nation. In many Alaskan rural villages, this fall's fuel oil prices are around $9.00 per gallon, and gasoline prices are up to $8.00 per gallon. In rural areas, gasoline is critical for hunting and fishing, which rural residents depend on as their main food source. Urban areas, especially outside of Anchorage, also pay high fuel prices.

Many Alaskans felt that if our oil brought such high prices, some of that large state revenue surplus should benefit us directly, by subsidizing our purchase of those high priced products produced from our oil.

Because of the impact of fuel costs on Alaskans' cost of living, Governor Palin proposed, and the Alaska legislature recently passed, a one-time "energy rebate" payment to every Dividend recipient of $1,200 that was added to the 2008 Dividend checks. One reason for this was that the State had a very large surplus because of the current high oil prices, mostly from selling State royalty oil --- the State gets 1/8 of all oil pumped from State land, and takes its royalty in oil which is sold on the open spot market.

Neither the dividend payments nor the energy rebate increase the price that non-Alaskans pay for fuel, since dividends are paid from the Fund's investment income, and the rebates are paid from income received from the sale of oil in the open market.

image -the late Gov. Jay Hamond


Posted by Philip Munger at 1:22 AM
2 comments:
Glitter and Doom said...
Is Alaska a welfare state?

http://patentleatherpussycat.wordpress.com/

September 14, 2008 2:12 AM
HarpboyAK said...
Not a welfare state, but a COMMONWEALTH in the fullest sense of the word.

The Constitution of the State of Alaska
Article 8 - Natural Resources
§ 2. General Authority
The legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people.

September 14, 2008 9:46 PM



As for the $22,000 from the federal government, please bear in mind that Alaska has a small population. Federal projects cost what they cost, no matter how many people use them -- i.e., highways, etc., so "per capita" it looks like we're getting a lot, but on an individual basis, it's no more of a benefit than any of the rest of you get with your roads, military expenditures, etc. Also keep in mind that many Alaskans live off the road system in very primitive conditions -- can you say "honey bucket?" Much of the federal money spent here has related to providing basic services, that you folks down there take for granted, to our rural residents.

I will concede that there have been stupid pork projects here -- but I doubt seriously that we are the only state in the union that has stupid pork projects. As for the Permanent Fund, I'm sorry that your state fathers didn't have the foresight to provide such a fund for you. It's not costing you guys anything, and we DO pay federal taxes on it, so you are all benefiting.

[BeFree]

2. $35 billion!

We oughtta grab that and give it to the people down here. If it wasn't for us yall would be Russians.

People don't pay $9 for gas. They pay extra for the transportation. And whatever you say about the 22G, it is still federal welfare. And Palin will just increase those earmarks outta my pocket!

[Blue_In_AK]

6. Hey, talk to your own legislature

and see if they'll set up a permanent fund for you. Surely your state has some resources that it's making money on.

[BeFree]

7. I will

And try to get them to take your 35B and end your 22K per. After all, all we got from you is Palin.

JK.

[Blue_In_AK]

11. Don't blame me for Palin.

That's all John McCain's doing. We'll be more than happy to take her back so we can teach her a few lessons on humility.

Sorry, but you have no legitimate claim to our 35 Billion, just like I don't have a claim to your IRA. If you missed it, this is INVESTMENT income, and the Fund took a big hit last week, just like everybody else.

[ColbertWatcher]

3. Does it also say why other oil-producing states don't get the same sweet deal? n/t

[Blue_In_AK]

5. You'll have to ask the other oil-producing states

why they didn't set one up. As HarpBoy commented on the post, our state constitution was written specifically in such a way that the natural resources would benefit the people of this state:

The Constitution of the State of Alaska
Article 8 - Natural Resources
§ 2. General Authority
The legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people.

The Permanent Fund was an outgrowth of this constitutional provision.


From what I understand, at the time of his death, Jay Hammond was talking with people in the Iraqi government about how they could set up such a fund for the benefit of their people. I personally think it's a great idea, and I wish that all the state had one.

[ColbertWatcher]

9. But why aren't the other states getting a special deal? n/t

[Blue_In_AK]

12. I don't know.

Believe me, I think it would be GREAT if other states had a permanent fund. I don't know why they didn't think of it themselves. Maybe your state governments have been too greedy. We just happened to have some really smart guys in government at the time that the oil started flowing through the Pipeline -- Jay Hammond, Hugh Malone, Dave Rose, among others -- who said, hey, rather than frittering all this money away on a bunch of capital projects or whatever, why don't we invest it and pay dividends to the people of the state. I don't think that's such a bad idea.

[ColbertWatcher]

14. "Maybe your state governments have been too greedy." Excuse me?

Maybe you aren't aware, but you can check other people's profiles by clicking on the icon.

Or maybe you did click on the icon, read my profile and don't understand what the word "California" means.

Or, maybe you don't know what being part of the United States means?

Again, I ask, why don't the other states get Alaska's special deal?

[Blue_In_AK]

16. Haven't you read anything I've written here?

The Alaska Permanent Fund was set up by our legislature and then-Governor Hammond pursuant to the Alaska state constitution in order to provide to the people of Alaska some benefit from the oil wealth that is extracted from our state. It's a STATE matter, not a federal thing. If you have a problem with California and how its wealth is distributed then take it up with your legislature.

Would you rather that Exxon, BP, and Conoco-Phillips take all the profits? They pay royalties to the State of Alaska, the State of Alaska invests that money, and we are paid dividends from the INTEREST on those investments.

Again, I'm sorry that you guys don't have a similar arrangement, but you don't have to get mad at us about it.

[ColbertWatcher]

18. Maybe I'm not making myself clear: why does Alaska get special treatment? n/t

[Blue_In_AK]

19. Maybe I'm not making MYSELF clear.

Alaska has a Constitution. Our constitution says that the resources of the state are to be conserved, managed and developed for the benefit of its residents. After oil started being produced on the North Slope and being transported through the Trans-Alaska Pipeline in the late '70s and early '80s, Alaska's governor and the legislature came up with a plan, pursuant to our constitution, whereby the PEOPLE OF ALASKA (since that's who our state constitution covers) would share in the royalties that the oil companies were paying to Alaska for the privilege of taking our resource and doing whatever they do with it. The royalties are deposited into the Alaska Permanent Fund, and the dividends are paid from the interest.

Once again, this has nothing to do with the federal government. This is Alaska law. We are a resource-rich state. Alaska's state government has chosen to share the wealth with the real people of the state. Other states put their revenues into other things, general funds, capital projects, whatever. This is just what Alaska has chosen to do.

If you're so disturbed about it, of course you are welcome to move up here, spend a couple of winters and collect your dividend, too. Might I suggest Shemya or Anuktuvuk Pass or possibly Akiachak? I hear they're lovely in January.

[ColbertWatcher]

20. No, you made yourself clear. Ends justify the means.

Alaska wrote themselves a chunk of welfare, which is in no way being manipulated by the oil companies.

Everyone knows this; oil companies never exploit anyone.

Hey, don't forget Gramm-Leach-Bliley's written down too.

Wake up!

[Blue_In_AK]

21. Whatever.

As I said, you're welcome to come up and get your share, too. You sound bitter.

[ColbertWatcher]

24. "Whatever" !? You still can't explain why Alaska gets special treatment. (EDIT)

Look I'm done with this.

[Blue_In_AK]

25. Ditto, kiddo.

I'm no economics expert - I explained it the best way I know how. Again, the invitation is always open for you to visit or even move up here. Try it, you might like it.

Can't we just all get along?

[TransitJohn]

8. We have the same sort of fund in Wyoming.

It just doesn't give residents a dividend.
http://www.swfinstitute.org/fund/wyoming.php

[Blue_In_AK]

13. Thank you, Transit.

Does the interest on their investments just go back into the fund? Our dividends are paid strictly out of the interest.

[TransitJohn]

15. No, the interest goes

to the General Fund for those jokers in Cheyenne who call themselves a legislature to throw around. :evilgrin: The principal is untouched.
Actually, they've been really strengthening and positioning the State for the future well....like 3 billion into the University in the last decade, new schools all over the state, the Wyoming Business Ready Grant program to help municipalities build infrastructure to attract new business to diversify out of energy. We've been running budget surpluses over the past decade, which is amazing considering the money they've been spending. We're flush because we're first in coal production (like a quarter of all coal in the USA), and 2nd in natural gas production after Louisiana. And we've always been the least populated state....hell, Alaska has a city with our state's population (roughly speaking).

[Blue_In_AK]

17. There are only 260,000 people in all of Wyoming???

I think that's the population of Anchorage now. As for your fund, it sounds like your government is doing a nice job with it. I think in Alaska they set it up so the "people" would get the dividends because we DON'T trust government to do the right thing. As Ted Stevens, Don Young, Sarah Palin, and the imprisoned state legislators amply demonstrate, that was probably a good instinct.

[TransitJohn]

26. I guess

I'm overestimating the population of Anchorage...I was thinking the whole metro area had a half a million. Our state broke 500,000 in population for the first time 2 years ago. Yes, the State is doing a good job with the money while it's coming in....I just hope they position us well for the future. :hi:

[sattahipdeep]

4. Anchorage residents talk about how they plan to spend their $3,269 checks.

http://community.adn.com/mini_apps/vmix/player.php?ID=2176046&GID=118

[Blue_In_AK]

10. That's pretty funny.

Say what you will about the permanent fund, it is a great boost to our economy every October -- and as the guy going to Vegas points out, a boost to Nevada's economy, as well. :rofl:

I've been catching up on bills with mine and put $2,000 in savings to help pay my federal income tax this year so I don't have to raid my IRA, which is what usually happens. The perils of being self-employed.

[Abugface]

22. What's the problem?

Alaska a welfare state. How about America? We've become a corporate welfare state (they just asked for another $700+ Billion).

[Blue_In_AK]

23. Exactly.

At least the regular people here in Alaska see some benefit.