When oil was discovered on Alaska’s North Slope in 1969 Alaska was a new, undeveloped state with a $112 million budget. That changed overnight with the oil boom and $900 million in oil lease sales and soon that was all spent. Alaskans became extremely concerned that more oil wealth would be wasted. The Permanent Fund was proposed to save wealth and build it for future generations. About a third of Alaskans were against a savings account and voted to spend the money on state development. In 1976, after a statewide discussion and public vote, the Permanent Fund was established as a dedicated Fund by a Constitutional Amendment that directed at least 25% of oil revenue into the Fund.
In 1982 the dividend program was started so that Alaskans will benefit equally from their resources owned collectively in the Commons. This PFD is also a strong protection for the Permanent Fund. The PFD gives a personal stake to Alaskans in how the Fund is managed and inspires Alaskans to take a personal interest in the Fund. It is connected to the Fund’s investment earnings reserve, so that people notice by the size of the PFD if the Fund is mismanaged and whether the Legislature is spending it without their permission. The PFD is a big reason why the Fund has grown to $56 billion and not spent down by government.
The Permanent Fund principal is protected and can’t be spent without a Constitutional Amendment that is difficult to pass. It’s invested by the Permanent Fund Corporation. By law, the earnings are used for dividends and can be used for government spending. The Legislature has invested extra money in the Fund yearly to make up for inflation, and that’s another reason for its growth.
The PFD is not guaranteed by our Alaska Constitution except in claiming our right to benefit from resources and approval on what the Legislature spends. So now, we are in a dangerous time where false ads, Legislators who don’t put the public interest first, and voters who lack of understanding are weakening Alaskans’ ability to defend our Fund and dividend. The Governor and Legislators are now proposing changes to the Fund and PFD that should only be allowed by informed consent by the voters. Alaskans must demand other options than restructuring the Fund and capping the PFD to pay for government and hidden business dividends. A Constitutional amendment guaranteeing the PFD is the only way to secure the Peoples’ share of resource wealth for all Alaskans.