HB 209 - Rep. Zack Field's bill to cap and limit the PFD - is a wolf in sheep's clothing, benefiting those in the upper income bracket and non-residents much more than lower-income families
Perhaps I am over simplifying the arguments in this article. Reduced to a simple statement: losing the PFD will have less impact on high income residents because it is a smaller percentage of their total income than it is for those with less income. So, they are less impacted by PFD reductions or loss.
I don’t see that as an argument for not capping the entitlement. From an income point of view it makes it more palatable. Politically, not so much.
The PFD was intended to get Alaskans to pay attention to the state’s financial affairs and the handing of the funds income. It didn’t work. The populace just wants its PFD.
Perhaps the current crisis in State funding due to the effects of climate change and the cuts in Federal programs will prompt a serious discussion of the PFD program - its funding, investment, and distribution to the State and its residents.
I realize that my attitude toward the PFD is grounded in the fact that I had been a resident for years before it was initiated. It isn’t a birthright benefit for me.
Thanks for the comment. Our point is a simple one. Alaska is facing a revenue shortfall. One way to fill the shortfall is by cutting the PFD and diverting the revenue otherwise designated for Alaska families to government. That has the effect of raising the revenue regressively, primarily from middle and lower-income Alaska families, while those in the Top 25% would contribute a trivial share of income, and non-residents nothing.
Another is to maintain the PFD as provided by statute and raise the revenue from all Alaskan families and non-residents through broad-based taxes (either sales or income), which would distribute the impact more evenly among income brackets.
Because of its relatively neutral and lower impact, we (and others) favor the latter. There would be no reason to cap the PFD if it is.
Appreciate the response. I’ve been here pre pipeline and PFD. I appreciate the benefit it provides lower income folks. At the same time I see that the administration of the corpus has failed to meet its purposes which I see as principally to provide a fund which can throw off enough income to grow and finance government operations when necessary.
The dividend was intended to motivate citizens to pay attention to operations of both the gov’t and the fund. Unfortunately, it didn’t.
As the state founders the PFD is a political hot potato - viewed as an entitlement rather than a benefit.
Recent analyses indicate that the fund would have benefitted from using existing investment vehicles rather than creating a state run investment house. An approach which would also have minimized potential graft and opportunism.
A healthy fund could add benefits of various types for the most deserving as the pie could have been larger and sustainable.
Alteration of the existing structure is a major political hot potato unfortunately. As long as we keep dumping money into AIDEA and AGDC the prospects are low of a coherent and sound state policy that will really be of future benefit.
(Written in a parking lot before med app’t so a quick write)
Perhaps I am over simplifying the arguments in this article. Reduced to a simple statement: losing the PFD will have less impact on high income residents because it is a smaller percentage of their total income than it is for those with less income. So, they are less impacted by PFD reductions or loss.
I don’t see that as an argument for not capping the entitlement. From an income point of view it makes it more palatable. Politically, not so much.
The PFD was intended to get Alaskans to pay attention to the state’s financial affairs and the handing of the funds income. It didn’t work. The populace just wants its PFD.
Perhaps the current crisis in State funding due to the effects of climate change and the cuts in Federal programs will prompt a serious discussion of the PFD program - its funding, investment, and distribution to the State and its residents.
I realize that my attitude toward the PFD is grounded in the fact that I had been a resident for years before it was initiated. It isn’t a birthright benefit for me.
Thanks for the comment. Our point is a simple one. Alaska is facing a revenue shortfall. One way to fill the shortfall is by cutting the PFD and diverting the revenue otherwise designated for Alaska families to government. That has the effect of raising the revenue regressively, primarily from middle and lower-income Alaska families, while those in the Top 25% would contribute a trivial share of income, and non-residents nothing.
Another is to maintain the PFD as provided by statute and raise the revenue from all Alaskan families and non-residents through broad-based taxes (either sales or income), which would distribute the impact more evenly among income brackets.
Because of its relatively neutral and lower impact, we (and others) favor the latter. There would be no reason to cap the PFD if it is.
Brad,
Appreciate the response. I’ve been here pre pipeline and PFD. I appreciate the benefit it provides lower income folks. At the same time I see that the administration of the corpus has failed to meet its purposes which I see as principally to provide a fund which can throw off enough income to grow and finance government operations when necessary.
The dividend was intended to motivate citizens to pay attention to operations of both the gov’t and the fund. Unfortunately, it didn’t.
As the state founders the PFD is a political hot potato - viewed as an entitlement rather than a benefit.
Recent analyses indicate that the fund would have benefitted from using existing investment vehicles rather than creating a state run investment house. An approach which would also have minimized potential graft and opportunism.
A healthy fund could add benefits of various types for the most deserving as the pie could have been larger and sustainable.
Alteration of the existing structure is a major political hot potato unfortunately. As long as we keep dumping money into AIDEA and AGDC the prospects are low of a coherent and sound state policy that will really be of future benefit.
(Written in a parking lot before med app’t so a quick write)