Holding PFDs incentive to entice Alaskans home
Rep. Paul Seaton, R-Homer
The Alaska Permanent Fund and the Dividend (PFD) program are two of the best creations of the people of Alaska. The PFD was created to allow residents to share in the oil revenue saved in the Permanent Fund, and today the PFD program is a cornerstone of the economy and a vital part of many Alaskan's income. I introduced HB 547 to address the obvious abuse of the PFD program, to provide an incentive to Alaskans to return home, and to improve the program and maximize the benefits to Alaska residents.
As with any act of government, the PFD program has evolved. Currently, the PFD program allows any resident to be absent for 180 days per year. The legislature has also established numerous extraordinary absences, which allow people to be absent for more than 180 days and still qualify for a dividend. Each year, new allowable absences and time durations are added to the list. For example, last year, a bill allowed families to leave for 3 extra years if a member of the family is caring for a terminally ill non-Alaskan relative (up to a first cousin relationship). This year, there is a bill to extend that absence for a person caring for a non-terminal, severely injured relative.
No one can deny that aging family members and medical emergencies are difficult situations, however, every year the number of checks for allowable extended absences grows. Today, allowable absences include: minor accompanying a PFD holder, full-time college, active duty military, medical treatment, congressional employment, state employment, care for ill family, care for terminally ill, settlement of an estate, Merchant Marine, and attendance at secondary school. Last year, 24,045 PFD checks were sent outside of Alaska. That is up 3,423 checks from 1999, and equates to more than $20 million in PFD's being sent out of the state each year and thereby being removed from the Alaskan economy.
HB 547, introduced last week in the State Affairs committee, retains all of the current allowable absences, but mandates that a person must return to Alaska for 185 days of the year following their absences before receiving their PFD checks. The idea for HB 547 was brought to me last year from a constituent military family that observed abuse of the PFD system by people they knew were not going to return to Alaska after their military career. HB 547 would give an incentive to these highly skilled people and their families to return to our communities and schools.
HB 547 also addresses the problem of the "brain drain" that occurs when our students choose to attend college out-of-state and then do not return. Several PFD checks in a lump sum might provide an incentive for their return after college.
Since I introduced HB 547, I have received several comments that interest should accrue on the PFD checks while they are held in trust. I have also received comments that college students need the PFD for current expenses. I offered both of these ideas for discussion in the State Affairs Committee, but there was no support for either, and the bill was moved on to the Finance Committee without any changes. I do not believe that there is currently enough support to move HB 547 out of this committee, but I do think that it is in the state's best interest to continue this discussion, and I am hopeful that a solution addressing all of the concerns will emerge next legislative session.
Please continue to develop and send me your suggestions to address the 'brain drain' and to protect the integrity of our Permanent Fund Dividend program.
Rep. Paul Seaton, R-Homer, is the District 35 State House Representative.
Is a soldier less a resident than a U.S. Senator?
Mike Heimbuch
Corporal John Smith isn't his real name, but he is a young man stationed overseas in the Middle East. Just 20 years old and raised in Alaska, he now serves his country in a far away place. Is he coming back here after his tour of duty is over? With any luck he will have the choice. In the meantime, the state of Alaska is considering a bill to withhold his Permanent Fund Dividend checks until he proves himself worthy to be called an Alaska resident. John's sister is also a lifelong Alaskan and wants to attend college in Idaho. That same bill would withhold her PFD checks until she once again proves to be a deserving Alaska resident.
On the other hand, this bill also provides that our U.S. congressmen will not be subjected to the same embarrassment and suspicion of defrauding the state. Strangely enough, this is not because they are more honest the reason is far more banal, and summed up in a quote from the office of Rep. Paul Seaton, who created this legislation. "I wouldn't want to be withholding a PFD check from Ted Stevens." Leaving aside the vastly different financial status between an army Noncommisioned Officer in Iraq and a U.S. senator as well as the question of who would be more deserving of a PFD this aspect of the bill should bring a chill to conservatives and liberals alike.
The fact is that our PFD program extends benefits to people without regard to whether they are productive citizens. Alaska residency requirements for the program are minimal, and one can spend up to 180 days Outside and still get a check without needing an approved excuse. There is fraud in the program, but most of it involves criminal intent by crooks and derelicts.
Lumping our college kids and servicemen into that category is painting with a mighty broad brush. With Alaskans screaming for more education funds and college costs soaring, why would we start withholding PFDs from young people trying to become educated, productive citizens?
Why not start with the least productive segment of society? In that light, basing PFDs solely on residency becomes a questionable approach.
If this is a backdoor means to increase University of Alaska enrollment, for shame. Children raised in Alaska benefit greatly from the cultural exchange taking place when attending school elsewhere. At ages 18-22 we should not be holding their PFDs hostage to a future decision to live here, like some landlord holding a cleaning deposit. A compromise approach would have been to directly deposit their PFDs with the colleges they attend. A more productive approach would be the legislature working on the creation of good jobs to pull more college grads back home. Either way, it's not right to give a PFD to some new Alaskan who is well-off and leaves for six months but withhold it from a lifelong Alaskan kid gone off to school for nine months. And under no conceivable circumstances should a PFD be withheld from a longtime Alaskan stationed overseas in the military.
If the PFD program goes down this road of "proving one's commitment to Alaska," perhaps we should look at folks who talk eagerly about leaving the state as soon as they can retire or get a few dollars ahead. After all, aren't they only here for the money?
An even better idea might be to withhold PFDs from state legislators until they come up with a fiscal plan for Alaska.
Mike Heimbuch is a lifelong Alaska resident and a candidate for District 35 State House.
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