THE PERMANENT FUND

"Protect it for the generations to come"

Alaska’s Redistribution of Public Wealth

• Government spending has evolved into a “top down” model where redistribution of public wealth now takes place at the highest levels.

• “Top down” spending is a major contributor to the current disconnects between government and those governed, which is manifested in many ways. 

• Examples of this disconnect are illustrated by studying grants and municipal assistance programs found in the state capital budget and supplemental appropriation bills.  However the impacts of this disconnect go far beyond these examples.

• The “top down” model allows government spending on projects that may NOT have broad based support in the communities where such work takes place.

• In the “top down” model communities lacking an adequate tax base will take grants (free money) from the government and have little or NO financial ability to operate or maintain the project once completed.

• Municipalities, school boards, the Alaska Municipal League (AML), labor unions, chambers of commerce, trade associations, and non profit grant recipients from around Alaska are now actively promoting use of the Permanent Fund, which would allow the “top down” model to continue for their exclusive benefit.

• In contrast, a “bottom up” model is where the people of a community identify their needs and then work collectively to satisfy that need.

• In the “bottom up” model a community could still receive Federal grants for their projects but would now be required to come up with the matching funds instead of relying on the state to provide it.

• This shift of financial burden from state to community does two things.  First, if a community can provide the match then it is more likely able to fund future operational and maintenance costs.  Second, a majority of local taxpayers will be required to vote approval of the proposed spending.  This indicates not only interest in the project but also willingness to pay the construction match and future operational costs. 

• By returning to the “bottom up” model it will help reduce the current disconnect between taxpayers and government.  It will force special interest groups to “sell” their concept to the entire community, not just to a majority of state legislators and the governor.

• The “bottom up” model favors paying Permanent Fund Dividends directly to the people.  With dividends in hand, local taxpayers will then decide what projects, if any, they choose to construct and ultimately maintain.

• Prior to discovery of oil at Prudhoe Bay the “bottom up” model was used successfully throughout Alaska.  We cannot continue unsustainable levels of spending, when faced with the certainty of declining oil revenues.  We must change our perspective while we still have “money in the bank”, or force future generations into bankruptcy and hopelessness.

• Grass roots politics with limited restriction is the basis of a strong democratic form of government.  Money in the hands of citizens is what makes a strong capitalist society.  Decisions made by the people who will be responsible for paying the future bills promote wiser, more responsible spending.  Our current “top down” model of government spending is a major contributor to the self-inflicted fiscal crisis which reality now forces us to solve.

• Until we finally return to the “bottom up” model and get control of our government again, Alaskan’s should, “Just Say NO”!!!

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