PFD Voter Registration Ballot Initiative Gives GOP One More Reason To Kill PFD

I just got an email announcement saying the Permanent Fund Dividend (PFD) voter registration initiative  would be on the August primary ballot in 2016:

"If passed by voters, PFD Voter would synchronize voter registration with the Permanent Fund Dividend application process, reducing bureaucratic paperwork and saving on processing costs. PFD Voter Registration is projected to register as many as 70,000 Alaskans to vote in the first year alone, and would fix out-of-date registration for tens of thousands more." 

But given Republican efforts to suppress voting around the country (see for instance Bill Moyers and Company's Unbeliebable GOP Statements on Voter Suppression  or Al Jazeera's Republicans use vote suppression as electoral strategy or American Prospect's Voter Suppression: How Bad? (Pretty Bad)),
Alaska GOP leaders have new incentive to just kill the PFD program altogether in their antipathy to g  to income taxes and to long term thinking.  That way they could raid the Permanent Fund and make sure it's not easy for Alaskans to register to vote.

Meanwhile, someone has a petition at iPetitions to limit PFD's to people born in Alaska and their Alaska resident spouses and children.

[Sorry, reposting because of Feedburner issues.]

"Alaska is like a billionaire facing a horrific future as a millionaire."

So said Liz Medicine Crow, the President/CEO of First Alaskans Institute at the Fiscal Forum last Saturday.   I was only able to catch a couple of hours in the morning.  And I only had the back of a Moose's Tooth receipt to take notes on.  I'd also note my quotes are rough paraphrases, not exact quotes.  (I think English needs a paraphrase mark in addition to quotation marks.)  This will just be notes on things that caught my attention.  For an overview of the forum, see Devin Kelly's ADN piece.  And I'll do one more on this covering the legislators I saw at the forum. 

John Havelock, Brad Keithly, Liz Medicine Crow, Gary Wilkin (l-r)

Medicine Crow also said a number of things that don't usually get said at forums on money and budgets.  Some examples:  

I assumed that she was referring to the Alaska constitution's directions in Article VII Section 4

"Fish, forests, wildlife, grasslands, and all other replenishable resources belonging to the State shall be utilized, developed, and maintained on the sustained yield principle, subject to preferences among beneficial uses" [emphasis added]

When she pointed out an oft overlooked resource:

"Preserve the resource of our humanity."   

Not a resource that's calculated too often in corporate annual reports or even most government reports, but certainly the most important factor of all.

She politely reminded us all that the terms sourdough* and cheechako* are relative as she gave a traditional Alaska Native introduction which places the speaker into context:

"My parents and grandparents are Tlingit-Haida from Kake.  . .  We've been here for hundreds of generations."

She also politely reminded us that cooperation offers more hope than conflict. 

 "In hard times we come together to make do, not for our own interests, but in the community interests."

And that rather than fight tribal power as the previous administration did, everyone would be better off working together. 

"Respectful government to government relations between tribes and state.  Tribes have access to resources, such as through the Alaska Native Tribal Health Consortium, which is internationally recognized for how efficiently it provides health care. 

Tribes have access to resources as tribes.  Some examples she gave were for justice and corrections.  Let's look at things differently.  We can find savings, not just cuts."

I found Keith Bradley's comment on multiplier effects interesting, but limited.

"Multiplier effect of spending means while PFD is mostly spent in Alaska, things like construction projects send money outside for things like cement and steel." 

The statement seemed to be an argument for why we should keep the Permanent Fund Dividend in spite of our budget problems.  I thought that pointing out how little money stays in the state when we do construction projects was interesting.  I hadn't thought about that.  But it seems that spending on education and health care and social services do keep money in the state.  Did he use construction as his example because he wants to cut the budget and education didn't support that point?  I don't know.


Gary Wilkin put our dire condition, as did Medicine Crow's billionaire statement, into context:

 "We're the only state with a portfolio of $73,000 per resident."

He got a few chuckles with this analogy: 

"PFD is like a self licking ice cream cone."  

I'm still trying to visualize a self licking cone so I can figure out what he meant. 

*For non-Alaskans, sourdoughs are folks who have lived in Alaska a long time. ("A long time" means generally as "as long as I've been here" and in my mind certainly over 20 years.)  Cheechako's are newcomers. 

Alaska State Lottery - Governor [Shania Sommers] Announces Everyone Wins $2072

Screen shot of Shania Sommer announcing PFD amount 2015

Technically, it's not called a lottery.  It's called the Alaska State Permanent Fund Dividend.  PFD for short.  Individuals don't have to put any money down for a ticket.  No numbers are drawn from a hat.  But you can't be a winner unless you fill out an application to demonstrate that you've lived in Alaska the whole previous year, that you aren't a resident of any other state, and that you plan to stay.

The total amount each resident wins (the governor announced that total today)  is calculated by formula (from the PF website):

1. Add Fund Statutory Net Income from the current plus the previous four fiscal years.
2. Multiply by 21%
3. Divide by 2
4. Subtract prior year obligations, expenses and PFD program operations
5. Divide by the number of eligible applicants

The fund comes from monies the state collects from mineral related income.  The state constitution says: 

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

Originally, it was thought that since oil and other minerals extracted from the state were not renewable resources, the wealth generated should not be used up by just one or two generations.  Instead, it should be conserved for the benefit of all future Alaskans.  It was envisioned to eventually serve as a trust fund for Alaska when the oil revenues ran out.  A small percent would be used each year to help fund the state.

But over the years, Alaska residents have come to view it as an entitlement.  Just this weekend one of the speakers at the Fiscal Future Forum talked about using the earnings of the Permanent Fund as the "third rail of Alaska politics." 

The payoff to Alaskans was originally determined by a formula that gave those who'd been in the state the longest, the most money - the payout was to be $50 per year of residency since statehood. But that was found by the US Supreme Court  to violate the guarantees of the Equal Protection Clause of the Fourteenth Amendment.  The law was changed to allow all Alaskans to receive the same amount.  

I did use the word 'win' in the title and many Alaskans view this as a 'win' though, as I said above, one they are entitled to.  

But I would argue that value of the PFD paid out to individuals may well be less than what we could do with all or even just some of the money were it used for needed services like schools or maintenance of state infrastructure.  

Undoubtedly, the PFD helps many Alaskans pay basic expenses.  And there are a number of Alaskans who economically do not need the dividend.  And there are others who spend their checks  on short term pleasures - drinking, an expensive vacation, etc.   Mine will go directly to the new water heater we had to install last week.  

Others have argued - though the exact proof is elusive - that the dividend attracts lower income migrants with large families from other states.  The $1884 per family member we got last year, sounds pretty good to a family of ten living on welfare.  And even with Alaska's higher cost of living it seems to be good enough to keep folks here.  

The lack of a state sales and income tax, plus the PFD means that most families come out ahead.  

It also makes people who demand that the legislature "spend my tax money wisely" sound pretty silly, because the only tax money they might possibly pay would go to local government for their sales or property taxes.

But then there are many ironies in "the last frontier" where people believe themselves to be ruggedly independent, yet we get the PFD and the state gets much more federal tax money than we contribute. It's easy to be indignant when you're ignorant.  

As I'm thinking about this, I bet Alaskans would be willing to add a lottery twist to the PFD.  I bet we'd be willing to lower the average payout if there was a chance to win some really big prize money for a few who are randomly selected.  I bet most Alaskans would give up 10% of their check for the chance to win $100,000.  

[Note:  I had this ready to post when the governor made the announcement, but was busy at the exact moment.  When I checked the video on the governor's  mulitmedia page, I was pleasantly surprised to see a girl talking about her college plans and how the dividend will help with that.  Announcing the PFD is one of the things that Alaska governors love to do because it's lots of free publicity on something everyone is happy to hear about.  Especially this year when the dividend is the highest on record (by $3). 

But this governor gave that moment of glory to  Shania Sommers.  Another sign that Walker is not only an adult, but also someone who is comfortable with who he is and happy to give away his  limelight to someone else.  Great move on his part. 

 

Almost 65,000 Alaskans Have Already Applied For Their Permanent Fund Dividend Checks

It's only January 4, 2012.  The fourth day that Alaskans can apply for their 2012 Permanent Fund Checks. 

That's a little less than 10% of Alaska's residents signed up in less than four days.  Part of the population doesn't procrastinate when it comes to free money from the state.  I wonder who many will sign up during the last four days? 

The oil money that keeps Alaska thriving is one of the reasons that most people - not immediately affected - are relatively complacent about the Kulluk resting in the surf off Kodiak.  Personally (through the PFD and those working for oil related businesses or state jobs funded by oil revenues) and collectively (through oil revenues paying covering most of our state revenues) all Alaskans have a financial stake in those oil dollars.   

Some older posts on different aspects of the Alaska Permanent Fund are here.

Last Week Republicans Thought Taxes Were Evil, Now They Think People Who Don't Pay Taxes Are Evil!

Until last week, all I heard from Republicans was that taxes were evil and should be avoided if at all possible.  For years, Grover Norquist has been twisting Republican congressional arms to sign a taxpayer protection pledge.

Some members of congress major in tax loopholes and when they graduate from congress they get high paying jobs helping the wealthy avoid taxes.  And Romney, we've been told, avoids taxes with the best of them including off-shore accounts in the Caymans and Switzerland.  When you fly over to check on your accounts it's probably tax deductible too.

Yesterday my head spun as it followed the Republican tax philosophy tennis ball being slammed in the other direction.   I learned that Romney disdained the 47% of Americans (actually US households, not people) who didn't pay income taxes.  You'd think he'd admire their ability to legally avoid income taxes, just as he thinks we should admire his ability to avoid taxes.  But no, it turns out he doesn't.  They think they're victims, he said.  Hell, all this time I believed that Republicans thought people who PAID taxes were victims.

He also thinks they're all Democrats or at least they plan to vote for Obama.  If that's true, then why doesn't Romney just concede the election now?  After all, there must be other US tax paying Americans like myself who plan to vote for Obama.  If just 3.1% of us income tax payers voted along with the 47% deadbeats - in the right states of course - Obama would win.

Mitt, I hate to tell you this, but what people say they believe and what they actually do are two different things.   I know because I live in the socialist Red state of Alaska where we follow the Republican Wally Hickel's (may he rest in peace) Owner State philosophy.  We collectively own the oil on the North Slope (and elsewhere) and we collectively get paid dividends on it.

Just yesterday our Republican governor's Revenue Commissioner announced that this year's checks would be  $875[8].    And big families like yours Mitt, five kids, get seven checks!  We're all like shareholders in the state of Alaska. We don't pay state income taxes, we don't pay state sales taxes, and we get a check from our collective ownership of the state's natural resources.  Yes, we're all victims, dependent on the state.  And just like corporate victims whose companies get federal contracts and various tax breaks, we use the money to create jobs.

And we're a red state that will, without a doubt,  vote for you in November Mitt.  I hope you can explain all this to me. 

Click here to see a CBS fact checking and explaining post of the 47% figure here.

Tuesday Sept 21 - Permanent Fund Check Amount Announcement Day

I botched my last PFD post - I didn't read carefully enough about the difference between sending out the old checks that were left over (today Sept. 16) and the checks for 2010 (October 7).

And I couldn't find any information on when the exact amount would be announced.  Today I called the Governor's office in Anchorage and they told me the date the amount will be announced is Tuesday, September 21.

As I said in the previous post, a  July 31 ADN article predicted it would be pretty close to last year's $1,305 - between  $1,250 and $1,320.


I would also note a comment from Anonymous in Ohio, who raised questions that I think are not uncommon from people Outside [Alaska jargon for everywhere not in Alaska.]  So I'm including Anon's comment and my response here.

Anon:
As a resident of Ohio, which sends more money to the federal govt than it receives back in federal funding, I am interested to know why Alaska sits on a fund with $35 Billion in assets, pays its citizens a 3 figure dividend from that fund every year, even when the fund has negative earnings in the prior year, yet gets more than double in federal funding what it sends as tax revenue. Why doesn't Alaska use that $35 B to build infrastructure, improve schools, and provide basic services to the villages? Do Alaskans pay federal tax on their permanent fund dividend? I actually find it rather distasteful to learn Alaska is taking federal funding while divvying up $8M among its residents.

My response to Anon:

Anon from Ohio, answering your questions could take up a few whole posts. But just briefly,
1. The US Government owns 60% of the land in Alaska. So a lot of money that comes to Alaska is related to managing your land here in Alaska. This includes a mountain officially named after a favorite son from your state and which your Congress members refuse to allow to be changed back to the name given by the original Alaskans. (The key opponent, Rep. Regula retired in 2009, so maybe there's hope now.)
2. Alaska has a large military presence and a lot of the federal money goes to that.
3. Alaska only became a state in 1959. Ohio has had over 200 years of statehood and federal help to develop necessary infrastructure. We have lots of catching up to do.

Do we deserve all the money we get from the feds? I'm not sure, but there are unique and justifiable reasons why Alaska gets so much federal money.

Why shouldn't we use the permanent fund now? That's a reasonable question. It was set up on the grounds that the oil was not a renewable resource and that one generation of Alaskans shouldn't squander the wealth and leave nothing for future generations. The idea is that when the oil money runs out, there is a fund that has been saved, which the state can tap to help pay for government. I would call that prudent management.

However, many Alaskans have taken the dividend so for granted, that they would oppose allowing the fund to be tapped to run the government. But as oil revenue runs out, the dividends of the fund should be able to pay for a good portion of our expenses. It's like a trust fund for the state.

Don't get me wrong. You're asking legitimate questions, but I'm guessing, Anon in Ohio, if you lived here you would be collecting your annual check and not want to dip into the principal.

First Permanent Fund Dividend Checks To Go Out Sept. 16

[UPDATE Sept. 16, 2010:  I've put up a new post after calling the Governor's office who said the official announcement will be Tuesday, Sept. 21.]

From the Permanent Fund Dividend site: 

Prior Year Dividends in eligible status by close of business September 10, 2010 will be direct deposited and mailed September 16, 2010.  [Update 10am - Anon 8:40am points out this says "prior year".  I'm not sure why prior year checks would wait until now, I don't have time to check now.]

2010 Dividends and Prior Year applications in eligible status by September 24, 2010 will be direct deposited and mailed October 7, 2010.

As I write this I can't find anything that tells us how much this year's dividend will be.  But the timing of the amount announcement varies. [UPDATE Sept. 16:  Governor's office says the announcement will be Tuesday, Sept. 21.]

The last three check amount announcements were:

•  September 19, 2007   ($1654)
  
  
• September 5, 2008  ($2069 + $1200)
   
• September 23, 2009.  ($1305)

But if some are going to be mailed out on September 16 this year, they are going to have to know the amount pretty quick. 

A July 31 ADN article predicted it would be pretty close to last year's $1,305 - between  $1,250 and $1,320.


The Alaska Permanent Fund Corporation website (different from the PFD site) explains how the amount is calculated:

Each year, the dividend distribution is calculated using a formula set in state law. The formula is based on an average of the Fund’s income over five years in order to produce a more stable flow of dividend amounts from year to year.

How the PFD amount is calculated

1. Add Fund Statutory Net Income from the current plus the previous four fiscal years.
2. Multiply by 21%
3. Divide by 2
4. Subtract prior year obligations, expenses and PFD program operations
5. Divide by the number of eligible applicants

Once the dividend amount has been calculated, the next step is to determine if enough income is available in the earnings reserve account to pay the dividend. While the full amount of the earnings reserve account is available for appropriation, the principal is not. It is possible that, in a given year, the calculation may produce a dividend although the funds may not be available to pay it.

The PF Dividend site has a link to a PDF file that shows the actual calculation for the 2009 check.   I noticed that while

the PF Corporation site says:   "Divide by the number of eligible applicants,"

the PF Dividend site says:"Divide by the estimated number of eligible dividend applicants"

Since they have two different 'eligible status' dates, and the first batch of checks goes out before the second 'eligible status' date, I guess they would have to use an estimate.

Divesting Alaska Funds From Iran

The State Affairs Committee didn't start this morning until 8:15am, which meant I wasn't late. The topic was a bill sponsored by Rep. Gatto.

HB (House Bill) 241 An Act relating to certain investments of the Alaska permanent fund, the state’s retirement systems, the State of Alaska Supplemental Annuity Plan, and the deferred compensation program for state employees in companies that do business in Iran, and restricting those investments; and providing for an effective date.”

[You can get the whole bill itself (It's five pages) here, but as I write, the committee substitute isn't yet available there.  Here are the links to documents related to today's hearing from the State Affairs Committee:

ocument Name	Bill or Subject (if assigned)
06 CPD position paper on Iran.pdf
10 witness bio 2-9-10 David Gottstein.pdf
11 David Gottstein accompanying material.pdf
12 witness bio 2-9-10 Akiva Tor.pdf
13 witness bio 2-9-10 Sarah Steelman.pdf
02 HB0241A.pdf	HB 241
03 explanation of changes HB 241.pdf	HB 241
04 sponsor statement HB 241.pdf	HB 241
05 sectional summary HB 241 Version R.pdf	HB 241
07 background info 1, HB 241.pdf	HB 241
08 background info 2, HB 241.pdf	HB 241
09 background info 3, HB 241.pdf	HB 241
14 HB241-REV-TRS-02-05-10 Iran Divestiture.pdf	HB 241

Introduced by Representative GATTO, Ramras (The capitalized name indicates he is the person who introduced the bill, then any others are co-sponsors who signed on later.)

I've been wondering about the usefulness of these rough notes here on the blog since many of the meetings are recorded by Gavel to Gavel and available online. This one was broadcast live and you can listen to it now here.

I've decided that when I take my notes on my laptop, I might as well post them.  Even though you can listen, it's easier to scan the notes to get a sense of it and decide if you need to get the details by listening to it.

Quick Overview

Basic Premise:  Companies doing business in Iran enable the government to continue to develop nuclear capability to fulfill their threat to wipe out Israel and also to continue to develop weapons - notably IED's - that kill American soldiers in Iraq.  Thus, by investing in those companies, the State of Alaska is assisting in the killing of American soldiers and in Iran's goal to destroy Israel.  The bill calls for the Permanent Fund, State Retirement Funds, etc.

Questions: 
1.    How will the divestment happen?
2.    What will it cost?
3.    Will it make a difference?

Answers:
There are about 20 states that already do this and the Federal government already has something like this in place.  The state will only have to use existing lists of 'scrutinized' companies already identified by the other states and not have to do the research itself.  The bar would be a $20 million investment. 

More Questions:
1.    Are Alaska oil companies on the list?
2.    If we are partners with the oil companies on the list, does that make Alaska a terrorist supporting organization?

It was an interesting discussion and witnesses included the Commissioner of Revenue Pat Galvin, Alaska Permanent Fund Director Michael J. Burns.  Also the former State Treasurer of Missouri, Sarah Steelman. testified by phone about the Missouri experience and the philosophy of terror-free investing.  David Gottstein, Alaska's AIPAC chair, testified by phone from Anchorage about the threat of Iran.



Rough Notes - DISCLAIMER - I typed as fast as I could, there are gaps, and probably mistakes where I couldn't keep up or hear.  Check the Gavel to Gavel tape for more accurate details. 

Opened at 8:15am by Chair Lynn.

Bill sponsored by our good friend and Committee member, co-sponsored by Ramras and Keller.

Gatto: My aide will introduce it

Tom Reiker: Not just a symbolic bill. Iran is diffeent from a hostile country such as Venezuela, Iran is actually sponsoring military action against us in Afganistand and Iraq. A nation we are at least indirectly fighting on the ground. The bill is to make all Americans, not just the soldiers on the ground, safer.

Make a list of scrutinzed companies. $20 Million is the bar for investment in Iran. The funds covered (see above). Department of Revenue makes a list of scrutinzed companies and turns over to the funds. For other funds where our money is co-mingled, we would encourage fund managers to divest. Based on Massachusetts doing a similar bill, and our size, it is estimated we would pull out half billion dollars out of Iran which would decrease their ability to pursue nuclear weapons and military in Iraq.

Provisions significant undertaking to enforce, so we did taylor the bill to piggy back off of lists other governments have compiled, which is why we changed the language to ‘scrutinized companies’ and the same with the $20 million bar, so this is consistent with other governmental.

We have several witnesses we are excited about.

Gatto: Thank you. We had a different bill before us, divestiture from Sudan. That was because genocide was being practiced. That isn’t the case in Iran. It is difficult to know who is elected in Iran??. We do know they are producing nuclear materials. They are awash in oil, so don’t know why they need nuclear. But we know they are arming their allies, and they want to eliminate Israel from the face of the earth. Israel is already talking about boots on the ground. Word is they are producing and will want to sell it and it won’t be to US or Canada. Iran, for all the oil they have, they have to import gasoline. So sanctions against their ability to import things they need.

In earlier legislation, we had difficulty of seperating money going to military, it’s hard for APF to separate those stocks going to iran.

We have to take a good look at those people whose goal is to wipe another country off the face of the earth. We can’t stand by and hope for the best when we have an opportunity to do something.

Lynn: What are the other states and how many?

Tom Reiker: About 21. Missouri was the first, through executive branch. California, Mass, Maryland.

Questions?

Johnson: You indicated on page 2 line ? Is importing gas a direct investment?

Tom Reiker: I don’t believe, need further guidance, that a direct exchange like that, that our influence the kind of thing our bill is targeting…

Johnson: Do we have a list of companies?

Gatto: We do, People will testify.

Johnson: What about oil companies in Alaska on the list? Exxon?

Reiker: I don’t think any oil company in Alaska.

Johnson: I want to see a list.


Pat Galvin: Commissioner of Revenue: Not here representing Permanant Fund or other boards, but for Administration and Dept. of Revenue. We will be responsible for implementing the bill. And the sponsors have drafted the bill i a way that makes it easier to implement than most such bills.

Impact, if any, diversion of funds from companies that otherwise would be appropriate investments.

Seaton: Page 2 starting line 12-21. Commissioner shall update quarterly, shall make reasonable efforts to examine all companies to see if they are scrutinized company. As I read it, you are required to scrutinized. Gives you things you can use, doesn’t say you can’t use others. This is not a significant item?

Galvin: I also landed this morning, and haven’t had a chance to read the CS [Committee Substitute], and my understanding from the sponsor is it is intended to allow the department to utilize existing lists and previously prepared investigatory material. We’ll look at the language to see it doesn’t exceed that.

Seaton: I would like the dept to make that analysis. As I read it it’s more difficult.

Galvin: i would like to comment on behalf of the governor on the general policy carried out through this bill. Generally the governor would be skeptical to mix our investment policy with social or political goals. But he does recognize that on occassion we need to isolate nation states, particularly when there is an attempt to avoid armed conrflcit. The Gov. will look at the bill to determine if it meets those circumstances. I’m not here to say the Gov approves, he will check to see if it is appropriate.

Lynn: Not so much social, as political and possibly national security.

Gatto: I don’t know if it’s a secret to anyone, but a lot of the weapons that show up in Iraq are made in Iran. They are very much involve in a war with our soldiers. if there is anything we can do to prevent the killing and maiming our boys and girls. We don’t know if this will affect our profits. The last thing we should be doing is to support Iran in any way. Our moral obligation.

Burns: Michael Burns, Exec Dir. of Permanent Fund. No testimony prepared. Just here to answer questions.

Lynn: We discussed divestiture in Darfur. Not the same. Any comparison, remarks comparing - is this apple and oranges, or just fruit?

Burns: Just saw this morning. Board has longstanding opposition to social investing. Darfur was a major exception. This is different.

Lynn: Wasn’t there some change you approved when discussing Darfur?

Burns: We did pass a resolution in support of those bills proposed. We did support it, but just narrowly and didn’t change policy for tha specific blll.

Lynn: This, appears more political and national security bill, would you agree?

Burns: Yes sir I do.

Petersen: I notice there is a zero fiscal note. Charges to sell stocks? Possible losses in selling stocks?

Burns: At times we’e looked at trading epenses, The differnce in the cost here, is the Commissioner of Revenue has the montioring responsibility. I don’t know tht we hae anything that rises to the $20million mark. I was surprised to hear the half billion level. I haven’t seen the list.

Gatto: With 21 states already establishing list of companies to divest. Would that not have a downward pressure on those stocks and so it would be wise to divest?

Burns: I don’t know.

Gatto: One would expect that pressures from so many countries to divest, this would be a good time.

Burns: Might would be the operative word.

Galvin:

Seaton: Page 3, line 11, business operations. List oil related activities. Retail sales of gasoline and related products. If you look at sales of one of our major producers going intto that country, what would you have to do to be sure this fuel wouldn’t go into military vehicles. Does that mean any oil company that sold diesel or gasoline would automatically be on this list? You need to get back to us on that.

Galvin: Wil have to gt back to you. My reading of the bill, would not, if a producer would refine a gasoline product that was sold to company outside of Iran which then sold it to Iran, not our job to follow the chain of product. It would be the company tht makes the final sale.

Seaton: If we had a wholly owned subsidiary of one of our refiners, if they sold related products - not sure what that means - say jet fuel, that subsidiary sold that product w/in Iran, without certificant for retail sale only, so I’m trying to figure out, what kind of chain of ownership would you the commissioner be required to look at? If a subsidiary of major oil company, would that throw them onto the list? You’ll need to look into that.

Galvin: Following up that line of inquiry, the intent to which the subsidiary will affect the determination as well.

Seaton: If someone forms a subsidiary, they could do whatever they liked and avoid the intent.

Gatto: I believe SEaton mentioned jet fuel and diesel. Iran has refineries and make those products, but they have more trouble with gasoline.

Seaton: Maybe the commissioer will get back to us - “and related products” what does that mean? While we produce jet fuel in Alaska, we may import it too.

Sarah Steelman by audio - Pleasure to share with you about this important issue. Former state treasurer of Missouri, and started this in Missouri, we were the first to divest. Speaking at request of Rep. Gatto. I’m also in charge of a divestment free fund. I will tell you about what happened in 2005 in Missouri. When I took office it was shocking for me to find out we were funding the people we were fighting. The previous treasurer was using foreign companies to invest the state’s money, which did the oil for food scandal and is still investing in Iran today. I started asking questions about our inevestments. Found we were doing nothing to prevent us from investing in companies investing in iran. We started the first terror free fund. We screened out these companies from our folio. We showed we could make the same return on investment by keeping the same type of portfolio. We then had UBS and other investors.

Set up nations first terrorism free policy for pension fund, and police and fire fighter terror free investment plan. A lot has changed in last five years, but much remains the same. I applaud you for taking this up today. The threat posed by Iran has increased, yet we still invest in Siemens and Nokia who are helping the Iranian government stifle the people.

Pleased that your fund manager isn’t taking a position opposed to this bill. There is defiitely room for debate, but the arguments we heard were wrong, untrue. - States shouldn’t set foreign policy, poor investments, costs too high. I know it is too high NOT to do this. Empowerment Financial Group offers fund for individuals to have terror free investments. No US $ should ever end in the hands of terrorists. Be happy to answer any questions. I’ve listened to your questions earlier about potential oil companies. Petro China signed a deal. French oil company. BP Got out. Royal Dutch Shell was there.

Lynn: Thank you. Questions. Did you miss the snow storm?

Steelman: We got more snow here than you have up there.

Lynn: Juneau has no snow ont he ground.

Steelman: You’re kidding?

Mr. David Gottstein: Thank you for allowing me to testify. Thank you. There has been a lot of thought and detail put in this so you know what we are asking here. I’m also Alaska chair of the AIPAC.

Sobering issue. US and the world under attack from radical islam. Terrorists incidents happening weekly. Radical islam that controls most of the muslim world. Arrests around US and Christmas airplane show we are under siege. All sahre embracing of Jihad against the west. Heart of radical Islamic movement and most dangerous is Iran. Their vast wealth and radical Islam, allows them to build nuclear power. Prospect of nuclear Iran with ability to launch missiles including Europe, with Israel in their sights.

Only good outcome is we get iran to change their behavior. ARsenal includes diplomacy, sanctions, blockades, then military. Sanctions have mixed results. We should use all non-violent means possible before more …

Digress from my prepared remarks to address the issues.

1. Divestiture in Iran package, 1996.
2. Iran refined petroleum ??? whatever fuel

Both passed by US Congress. It makes moot some of the questions asked earlier, because the president has the right to say it is illegal for insurance companies to insure tankers going to Iran. This is aimed at reducing the ability of Iran to raise money through use of their refineries. One day the state would own shares in a company, the next day they would not. It wouldn’t change any other relationship the state had with the company.

Reading… chance to influence positively, Iran’s president aims to wipe israel from the planet and would have serious consequence and middle east would turn into a firestorm. Seldom are you asked to grasp with national issues. Able to join in the ost serious war effort since the fight against Nazism.

provided committee with lists I’ve faxed during the others’ testimony.

Lynn: Thank you very much. I appreciate most of your comments.

Anyone else on line? In the audience? Close public testimony. Committee discussion.

Seaton: I appreciate some of the testimony, but i think in some ways we’re beyond our level of expertise. We’re talking about alqaeda and racical islam. We need to be aware we need to be much more clear, I’m not an expert on these things. Make sure we aren’t indicting all of a religion and we have bill before us and need further definition on the bill.

Lynn: I agree with that, and I think the distinction between radical islam and islam. Not talking about Al qaeda. We are talking about nation survival. What can we do here in Alaska, if we don’t invest in these countries we do one small part.

Johnson: I am concerned and I think Gottstein sums it up. He mentions Shell, One day were doing business and the next they are still doing business with the companies. This may be one of those feel good kind of things. We haen’t een any evidence of any problem or effect. I don’t hold it up, I have doubts we do much good with these feel good bill.

Lynn: National security is very feel good.

Johnson: If I thought it did any good I would support it.

Lynn: Does it do any harm?

Johnson: That’s why I’m not opposed.

Peterson: .. missed it -

Seaton - we have Royal Dutch Shell. If it is fine to do business with these companies, but we can’t buy their stock, but basically be in partnership with them. I’m not sure of the effect. Hope we will get a little more information.

Johnson: SEaton raises interesting issue. Since we are partners with these company, do we qualify as someone who should be on the divestiture list? Are we know bad guys?

Wilson: As I look at the list, it amazes me that 9 of the 36 are from Malaysia and …???
I think we need to think where most of them are from. We are partners with some. I think we need more information just to make sure. I would like to know for sure if there would be ramiication for Alaska because we might have a partnership.

Seaton: Some of this we’ve asked the commissioner to gt back to us. We are looking at in the finance aspects. Commissioner would gt from the Department of Law about subsidiaries. Our partnerships in the wells that these companies have.

Lynn to Galvin: Seaton’s asked these questions. How long would it take to get that information?

Galvin: hard to hear.

Gruenberg: # of us were interested in …. this seems structured the same way. Has your position changed since Darfur. No change on bill, but situation changed.

Lynn: Don’t want to go down that path talking about Darfur.

Mr. Cane: I’d have to talke time to research deeper concerns. A few days at least, depending on depth of questions

Gatto: i think we could research this info to April 20. There is no end to the details we could look up. I count number of GI’s no longer with us. ⅔ killed, not in battle, but by IEDs and these come from Iran. This isnt’ to destroy the country of iran. This is to help save our soldiers. These are manufactured in Iran, They have the labels on them. I wish this bill wiould end Iran’s involvement. it does something to lessen the losses. If people want to investigate, let them. But pass the bill. Later, we can find out it has no effect. So what? It won’t hurt our portfolio. If you find out in your portfolio, some is helping IRAN. Would you not act, even if it meant you would lose a few dollars. I would, I hope you would, I hope the Prmanent fund would. I’m looking beyond money. Go to some of the memorials. Do it. Thank you.

Gatto: It made it somewhat easier ????? If divestiture had no effect, none. Why would BP remove their investments?

Petersen: It might be pretty dangerous for the employees to be working in that environment. In some places, employees taken for ransom. Oil companies may have hard time getting employees to go their and work. It could be political.

Brief at ease.

Lynn: I basically support this bill, but I have some questions, if meets agreement of committee, would like to bring it up next meeting - APOC, SC decision on campaing, if we have time I’d bring it back, if not then next time.

Gatto: OK

Lynn: Close out this hearing. Thrusday, overview on Citizens United overview.

Alaska Permanent Fund Application Time

Between January and March, Alaskans fill out the forms so that come October, the State sends us our Alaska Permanent Fund Dividends (PFD's).   This fund was set up when the State was embarking on our giant oil bonanza.  Gov. Jay Hammond was perhaps the key backer of this idea of establishing a fund by setting aside a percentage of income from our oil revenues.  Here's what the Alaska Permanent Fund Corporation website says:

WHAT IS THE ALASKA PERMANENT FUND?

A dedicated fund owned by the State of Alaska

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

Created by a constitutional amendment

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

Comprised of income-producing investments

The Fund is invested in a diversified portfolio of public and private asset classes. All investments, whether in Alaska or around the world, must be expected to produce income with an acceptable level of risk. The Fund is not invested in projects that are primarily focused on economic or social development.

Used for both savings and spending

The Legislature may spend realized Fund investment earnings. Realized earnings consist of stock dividends, bond interest, real estate rent and the income made or lost by the sale of any of these investment assets. Unrealized earnings - those resulting from the change in market value of assets that are held - cannot be spent. Most of the spending from the Fund has been for dividends to qualified Alaska residents. The Permanent Fund Dividend Division (a separate entity from the APFC) operates the PFD program, which the Legislature established in 1980.

Managed by a state-owned corporation

In 1980, the Legislature established the Alaska Permanent Fund Corporation to manage Fund investments.

The idea was that the oil in the ground belonged to all Alaskans now and in the future and so the revenue generated by the fund shouldn't simply be used by the generation of Alaskans alive when the resouce was 'cashed in.'  A significant portion should be put into a fund that would continue to grow, like an endowment, for future generations.  So, at some point in the future when oil revenues dried up, the fund would be large enough that the income from investments would be able to pay for a significant part of the State's annual budget.

It was also decided that Alaskans should get dividends.  Some people, I suspect, just wanted to get their hands on some money.  Some politicians figured getting money out of the hands of the government and into the hands of the people was just good politics.  And others thought that if the people got a dividend, they would have a stake in the size of the State royalties for the oil, and would have a vested interest in making sure the State didn't get too cozy with the oil companies.  So the Alaska Permanent Fund dividend was born.

It did get held up for a couple of years because the formula for figuring out how much of a dividend each person got was challenged in court (successfully).  Originally it was based on how long someone lived in the state, but the US Supreme Court said that was unconstitutional.  

Now, 33 years after the fund was established, we have about $34 billion dollars in the fund (down from a high of $40 billion before the market crash) and Alaskans - every man, woman, and child who is a resident and files an application - gets a dividend from this fund.  The October 2009 checks were $1305 per recipient.

So, Sunday, my wife and I got onto the computer and went to the Permanent Fund Dividend Site and filled out the online application.   At the end of the process we got the following:

2010 Adult PFD Online Signature Page

[ _ ]

 

Print, sign and mail this form to: Alaska Department of Revenue Permanent Fund Dividend Division PO BOX 110462 Juneau, Alaska 99811-0462

Applicant Information
Name:	XXXXXXXX
SSN:	XXXXXXX
DOB:	XXXXXXXX
Confirmation Number:	XXXXXXXX
Filing Date/Time:	XXXXXXXXX

Read the Following Statements and Sign Below

I certify that:

I am now and intend to remain an Alaska resident indefinitely. I was an Alaska resident for all of 2009 . I have not claimed residency in another state. I was in the state of Alaska for at least 72 consecutive hours in 2008 or 2009 .

I understand that if what I say is not true, it is a criminal offense and if I am convicted, in addition to any criminal penalties:

I will lose this and all future dividends. I will be required to pay back all dividends I have been paid.

I understand that if I deliberately misrepresent or recklessly disregard a fact, I am liable for civil penalties:

I could lose this dividend and my next five dividends. I may have to pay a fine of up to $3,000.

Release of Information: I authorize the Alaska Department of Revenue to obtain confidential information necessary to verify my eligibility. I authorize the release of confidential records necessary to verify my eligibility from any public agency including Social Security Administration; Internal Revenue Service; Alaska Department of Health and Social Services, Division of Public Assistance, and Office of Children's Services. I agree that a copy of this authorization is as valid as the original.

I certify that the information I am supplying on and with this form is true and correct.

Your Signature		Date:
By submitting this application with or without signature I am consenting to registration with the U.S. Selective Service System, if so required by law.

04XXX



We could have chosen to do it all online with an electronic signature, but we still like paper and we need to send in some more information as well, so we did the one where the information is now filed online, but we have to sign these forms and mail them in.

Although the original intent was to eventually be able to use the earnings on the fund to pay for state government, people have gotten so used to getting their checks in October that they now think of them as an entitlement.  We're still getting enough money from oil revenues (it was shaky when oil went down below $10 a barrel, but Alaskans are smiling with $70 and $80 per barrel prices) that we don't need to use the earnings yet to run government.  But when we get to that point, I suspect there's going to be a big, nasty fight. 

Two  state legislators have already begun to address this (from the Anchorage Daily News Jan 5, 2009):

Sen. Hollis French and Rep. Harry Crawford want to guarantee Permanent Fund dividend checks in the state Constitution, saying if the dividend isn’t protected the Legislature will eventually use the money to pay for state government spending.

“There are some who would spend the dividend on government, and I think those voices are going to rise in the next few years as budget pressures come on the state of Alaska. Keep in mind that the dividend has sponsored college educations - just ask my son - it’s built homes, paid for medical bills, it’s an enormous part of the Alaskan economy,” said French, who is running for governor in the fall election.

French and Crawford, both Democrats from Anchorage, said today they’ll introduce a resolution to enshrine the dividend. Such a constitutional amendment needs a two-thirds vote in the House and Senate and then a statewide public vote to pass. That is a huge hurdle.

Both these men are running for Statewide office (Governor and US House) next November, so one has to assume this has to do with that election.   

Independent, Self Reliant Alaskans and other myths

Sometimes I just can't help myself, and my wife is gone so she can't restrain me.

My apologies to JC because her letter isn't different from a lot of others. This is from today's letters to the Anchorage Daily News.

Alaska has long been the last bastion of individual self-reliance and independent thought in the entire United States. The Daily News endorsement of the man who is the very antithesis of those concepts is exceedingly disappointing. President-elect Obama wants the general populace to become more dependent on government for their livelihood, housing, education and health care. All of which, naturally, will give the government more control over what they do, where they live, how they are educated and what quality of care they will receive.

I look forward to the next election, when this trend toward becoming a nation of grown-up-infants can be turned back and we can continue to become a nation of mature, independent, innovative, motivated and free adults.

-- JC

Homer

The opening sentence really got to me:

Alaska has long been the last bastion of individual self-reliance and independent thought in the entire United States.

The last time Alaska was truly a bastion of individual self-reliance was when Alaskan Natives were living off the land - whether Tlingits in Southeast, Yup'ik and Inupiaq, Athabaskans, Alutiiqs, and all the other Alaskan Native peoples - before the Russians came.

Since the time Russians, and then non-Native Americans, arrived, Alaska has basically been a colony of outside interests. The Russians enslaved Aleuts and others to kill seals and otters to send the furs back to Russia.

The missionaries came to Christianize the Alaska Natives, exploiting the devastation caused by the diseases they brought to the indigenous peoples to 'prove' that the old ways were evil and that the Christian ways were good. Most did their best to ban the local languages and the practice of local traditions. They lived off of contributions from churchgoers throughout the US and the hunting and fishing skills of their congregants.

Then there was the gold. The lifeline was the supplies coming up from Seattle.

Copper, same thing.

Fish. Same thing.

Military - the most successful cooperative living experiment in US history, where everyone sacrifices, income, personal freedoms and choices - location, health care, housing, education, even sacrificing life - for the good of the whole.

Oil, back to resource exploitation by Outsiders (we've all heard repeatedly what kinds of profits the oil companies have made the last few years) and many of the people working up here have come up from Outside, often to leave after making (or not) their fortune.

Federal spending is the largest single source of Alaskans jobs.
[As I understand it, these are the five largest sectors in the Alaska economy and the jobs from oil include jobs paid for by the spending of the PFD checks. Slide from ISER Powerpoint.]

Our self-reliance and independent living comes from receiving (in 2004) the second largest amount of federal expenditures in ratio to tax burden of any state (New Mexico beat us) and from our collective ownership of the oil in the North Slope.

[Map from the Tax Foundation. Double click to enlarge it]

This is a long way from the Alaskan Natives who really lived off the land without supply ships, or even our romantic image of non-Native trappers living in little cabins in the middle of nowhere surviving by their wilderness skills and often their shipped in liquor. Instead we get our Permanent Fund checks, drive our gas guzzling cars and recreational vehicles of all kinds paid for by jobs funded either by the federal government or through using up Alaska's natural resources - more responsibly than in the past only because environmentalists have gotten in a few laws that regulate some of the industries.

President-elect Obama wants the general populace to become more dependent on government for their livelihood, housing, education and health care.

Excuse me. I believe that when Democrat Clinton left office in 2001 our economy was doing well and we had a huge surplus erasing the deficit left by Republican President George Bush I. And as the Bush 2 administration leaves office our economy is in its worst shape since the Depression in the 1930's and we are reeling in debt.

JC, the emperor has no clothes. I'm not sure which world you are living in or who's been telling you what to believe. From my perspective you've bought into the Orwellian Newspeak of conservative attack talk radio - Black is White, War is Peace, Republicans are fiscally responsible, Democrats are not. The words are good, but they are totally disconnected from facts. Is that what you meant by "independent thought"? That it was independent from facts?

What the Bush administration teaches us is that the market is NOT the answer to all our problems. Government may well have grown fat by the 1970's when the tax revolt began, but people had jobs, were living better than their parents, the physical infrastructure of the US (roads, bridges, rail lines, water systems, etc.) was kept in reasonable repair, kids graduated from high school with a reasonable education in most places. Government is NOT the answer to all our problems, but without a strong government, private companies grow larger and more powerful and offer a threat even greater than government.

It's conservative Republicans who have concluded that the market is going to collapse without the help of massive government spending. Or, an even more sinister interpretation, as the Bush administration winds down, they see this as their last chance, for a while, to raid the government coffers.

We need both the government and the market to perform what they each perform best. And in an informed democracy, people can keep their government accountable. But in a brainwashed population that believes myths like "the self-reliant and independent Alaskan" and the "Obama who is about to enslave Americans with big government," we'll do things like elect convicted felons to represent us in the false hope that the money spigot from Washington will continue and we won't have to actually be self-reliant and independent.


Sorry, my wife is out of town and not here to keep me from hyper-ventilating when I read letters like this. Fortunately, enough people in the US have seen through the hype of the last eight years.

JC, I know that the ADN doesn't give you too many words to make your points with, but how about a few references to actual facts that cause you to make the generalizations you make.