Is The Permanent Fund Dividend Constitutional?

The permanent fund dividend (PFD) appropriations unconditionally give away state assets raising serious constitutional questions whether providing for an annual wealth distribution payment to every eligible adult and child in the state is a proper function of government.

The Alaska constitution provides that “[a]ll government … is instituted solely for the good of the people as a whole.” The PFD appropriations, however, have the diametrically opposite intention and effect. These legislative wealth payments are to be used solely by individuals without regard to the common good or to any underlying governmental purpose. These appropriations are distinguishable from appropriations to provide for the public welfare which is a governmental purpose under the Alaska constitution.

Abraham Lincoln understood this difference when he said “[t]he legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do for themselves – in their separate and individual capacities.”

As Lincoln said, we join together as a government to accomplish what best can be done collectively such as public safety, education, transportation, and public health. Our role as citizens, therefore, should be to remain focused on our citizenship obligations to the common good and not on self-interest. To do otherwise would be contrary to Alaska’s constitution which provides that “all persons have corresponding obligations to the people and to the State.”

As citizens, we must recognize that every PFD check is an appropriation for purely private financial gain and every check represents that much less for constitutionally-mandated public services and future generations. For example, during the announcement of the amount of the PFD in 2015, it was noted the state was paying more in PFD checks than it was for the education of young Alaskans.

The Alaska constitution also provides: “The legislature shall provide for the utilization … of all natural resources belonging to the state … for the maximum benefit of its people.” The PFD appropriations, however, have transmuted over $21 billion belonging collectively to the people into personal wealth payments. Revenues that were constitutionally intended to be for the good of us all have been individualized so they no longer are utilized, or even available, for the maximum benefit of the people or for future generations. Indeed, some support the annual privatization of these state assets to prevent them from being utilized for public purposes.

Further, Alaska’s constitution requires that there shall be “[n]o … appropriation of public money … except for a public purpose.” Thirty-seven years ago, the Alaska Supreme Court, after noting “the question is a close one”, upheld the permanent fund income distribution statute (which since has significantly changed) in a 3-2 decision on other grounds. However, as noted by Justice Burke in a concurring opinion, the public purpose requirement was “largely ignored both by the parties and my colleagues on the bench.” Justice Burke also stated he had “serious reservations about certain aspects of the permanent fund dividend distribution plan” and “it appears questionable to me whether the plan satisfies the ‘public purpose’ requirement of …the state constitution.”

He wrote: “[a] strong argument can be made that the plan is one that amounts to ‘the giving away of public assets without any corresponding discernable benefit,’ and that it, therefore, should be struck down.”

Black’s Law Dictionary defines a “public purpose” as “an action by or at the direction of a government for the benefit of the community as a whole.” The Alaska Supreme Court recognizes that “changing conditions create changing public needs” and “[w]hether a public purpose is being served must be decided as each case arises and in the light of the particular facts and circumstances of each case.”

Significantly, the court recognized that for the public purpose provision to be met, the appropriation must relate to public needs. One is hard pressed to say that appropriating unconditional annual wealth distribution payments to adults and children to spend (or not spend) however, whenever, and wherever they want relates to public needs.

For the common good, and for future generations, the time is now for Alaskans to pull together and end the Permanent Fund Dividend Program.

Chip Wagoner
Juneau, AK
Chip Wagoner is a 48 year Alaskan resident and graduate of the University of Alaska.

How You Can Grow Your Social Security Benefits Beyond Retirement Age

For more and more Americans, reaching retirement age no longer means the end of an active working life. Many people are choosing to work past the age of 65, according to the Department of Labor’s Bureau of Labor Statistics.

If you’re willing and able, maintaining gainful employment later in life could go a long way toward ensuring a secure future for you and your family. Besides providing you with additional income to pay your bills, extending your employment or working for yourself could boost your lifetime Social Security benefits.

Here’s how:

Waiting to claim your Social Security retirement benefits could grow them by up to 32 percent. Through delayed retirement credits, your monthly benefit amount increases by about eight percent for each year you wait between your full retirement age and 70. Full retirement age is between 65 and 67, depending on when you were born. To learn more about delayed retirement credits, please visit www.socialsecurity.gov/planners/retire/delayret.html.

You get credits on your earnings record for each year of additional work income. Once you start receiving retirement benefits, we’ll automatically review your earnings record each year to determine if you’re entitled to an adjustment. When we calculate your retirement benefit amount, we use your best 35 years of earnings. We’ll increase your benefit amount if your new year of earnings is higher than one of the years we used to calculate your initial benefit amount. To see how we calculate your benefits, visit www.socialsecurity.gov/pubs/EN-05-10070.pdf.

An increased benefit amount for yourself could mean more support for your family, too, through Social Security spousal benefits, child benefits, and survivor benefits.

We also encourage you to set up your own my Social Security account so you can verify your lifetime earnings record, check the status of an application for benefits, and manage them after you’re receiving them. You can create your personal my Social Security account today at www.socialsecurity.gov/myaccount.

Social Security is committed to helping you prepare for a secure today and tomorrow for you, your family, and future family. You can access all of our retirement resources at www.socialsecurity.gov/planners/retire.

Robin Schmidt
Social Security Administration
Alaska Public Affairs Specialist

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