Fairbanks Daily News-Miner editorial

The Alaska Permanent Fund has survived the economic downturn with enough vigor that the state can deliver checks of $1,174 to each qualifying Alaskan this year. While this is a tremendous help to many people and stimulates the retail economy, Alaskans should understand the long-standing disagreements about the nature of this annual government entitlement.

Preserving such understanding, if nothing else, might provide space for some intelligent debate in future years.

In the late 1970s and early 1980s, the dividend had not yet metamorphosed into the third rail of Alaska politics. Some politicians actually opposed the idea — and they even were re-elected. How could that be?

It could be because Alaskans and their elected leaders held divergent views about about wisdom of creating the dividend. They still do, but few people talk publicly about them.

The prevailing view casts the dividend as a resident’s cut of the income from development of Alaska’s resources. The idea is that the state holds resources in trust for the individual residents. So royalties and lease fees from sale of these resources, as well as all earnings on that income, must be dedicated to their individual pockets, untapped by government agencies. Despite some obvious flaws in this theory, the permanent fund and dividend often are viewed as its proof.

As a result, precious few of the fund’s earnings have been used for government operations. The earnings mostly have been distributed as dividends or returned to the fund as inflation-proofing. That has worked fine from a practical standpoint. The state has rarely needed the money.

However, there is another way to view the permanent fund’s earnings, a view that is equally conservative in perspective and more in keeping with the fund’s origins.

The fund predates the dividend program by several years. The dividend was promoted later as a way heighten support for the savings account and thereby protect it from ourselves and our legislators.

This reveals, though, that the original purpose of the fund was not to spin off money for individual Alaskans but to spin off revenue for public services as the oil patch dries up.

In other words, to the extent that the state holds resources in trust for Alaskans, it does so not simply to sell them for the benefit of individuals. Rather, the state develops these resources to support core government functions — activities that aren’t easily accomplished through individual action, such as providing for public safety, operating a judicial system, securing public rights of way, managing fish and wildlife, etc.

When the state collects income from the development of its resources, these government functions are legitimate places to spend the money. In fact, one could argue they are the most legitimate. Why should cash payments to individuals, regardless of their income levels, be considered a government’s highest calling? To declare so is the antithesis of conservatism in government.

Certainly our state government spends some money foolishly. But Alaskans should elect people who seek and eliminate such spending. They should not simply declare that the state’s income be passed to individuals so it can be kept from the hands of profligate bureaucrats.

The dividend cost the state of Alaska $760 million this year. That money will help hundreds of thousands of people pay their bills and perhaps indulge in a few extras.

However, Alaskans should count themselves more lucky than entitled.

When we created a state government more than 50 years ago, we did not declare in the Constitution that the distribution of annual checks would be its highest purpose. There may come a day when the governmental functions actually enumerated in that document should have at least equal standing with individual gain.

That day was the one upon which the permanent fund’s founders had their eyes. They hadn’t yet been distracted by the day that arrives annually in early October.