|
What Happened to the PFD?
Many Alaskans are asking a familiar question: What happened to the Permanent Fund Dividend? The answer lies in decisions made over the past decade and the long-term impacts those decisions have had on our state’s revenue system.
For decades, Alaska relied on oil revenue to fund roughly 90% of state government. That changed in 2013, when the Legislature passed SB 21, a bill that significantly reduced oil taxes by billions of dollars. Supporters of the bill promised that lowering taxes, credits, and deductions for the oil industry would ultimately benefit Alaskans and “save the PFD.”
The results have not matched those promises. Today, oil revenue covers only about 15–35% of the state budget. Alaskans have seen the consequences reflected directly in the size of their PFD. With no alternative revenue sources, the gap created by reduced oil revenue has been filled by drawing down our state savings and reducing Alaskans’ annual dividend.
To put this in perspective, imagine earning $90,000 a year, then voluntarily reducing your salary to $35,000. For a while, you could rely on savings—but eventually, the bills start coming due, and essential needs become harder to meet. That is the financial trajectory the state has been on since 2013.
It’s important to note that the state budget has not grown during this period. In fact, when adjusted for inflation, the budget has decreased over the last decade. Politician after politician has run for office - and often won - saying they are going to cut our way out of this. And when given the chance they don't because the reality is we still have constitutional obligations to fund public safety, our court system, education, keep our roads fixed and plowed, etc.
Several years ago, I appealed to the Alaska Supreme Court seeking a full PFD distribution, with the hope that a favorable decision would compel the Legislature to address our underlying revenue imbalance—specifically, the flaws in our current oil tax structure. While the Court ruled otherwise, the core issue remains unresolved.
If we do nothing, the PFD will continue to shrink. The good news is - the solution today is the same it was 12 years ago - Get rid of the oil wealth giveaway. Some out there say - “well, just do it.” But with the highest veto override threshold in the nation, this can’t happen without the Governor willing to stand up to the oil industry. We’ve got bills to cut the oil wealth giveaway. Now we just need the Governor to stop opposing them.
When all is said and done - do you really support a bigger PFD by loudly saying you support a bigger PFD, but then quietly blocking all efforts to get a bigger PFD?
| 
