EDITOR, Daily News:
As a resident and longtime financial planner in Alaska, I have been concerned for years about the financial problems facing our state.
Now we are hearing from Leslie Becker, running to replace Dan Ortiz in the state House of Representatives, that she pledges to pay a “full” dividend plus pay back the PFD amounts not paid by the prior administration.
A pledge to pay a “full” dividend during a time as financially challenging as we are now enduring is a huge mistake. It will deplete our own economic future of the ability to pay out future earnings to our children and grandchildren. It will, according to the state Office of Management and Budget, cost the Permanent Fund Earnings Reserve account $4.5 billion. This is money that should stay in the earnings reserve account to grow and fund future PFD payments to residents and fund essential government services. Robbing this account now is the wrong thing to do, even if it sounds good and might get a candidate elected.
If Alaska pays a “full” dividend as is being pledged by Ms. Becker and others, that money will be gone from the reserve account, period. According to the nonpartisan Office of Legislative Finance, it will cost the state $300 million in future earnings every year if $4.5 billion is spent to pay out “full” dividends. This is funding that we desperately need in Alaska for schools, ferries, roads, public safety, other essential services and future PFD payments to residents.
The solution to our financial problem is to develop a long-term financial plan, with a sound investment strategy to grow our earnings reserve account carefully and thoughtfully. Dan Ortiz, our current representative in the state House, has pledged to support a long-term financial plan and a moderate but reduced PFD. Bert Stedman, our current senator to the state Senate, has likewise advocated a long-term financial plan. In fact, Both Sen. Stedman and Rep. Ortiz were instrumental in returning $4.9 billion to the principal of the earnings reserve account in order to avoid spending it. Rather than buying votes, both Ortiz and Stedman have acted in a bipartisan way to protect Alaska’s best interest. Let’s be smart, Alaska, and not fall for campaign pledges that will further destroy our chances for financial security in the future.
MARY LYNNE & JIM DAHL