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Alaska State Legislature House and Senate Democrats |
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http://www.akdemocrats.org Jordan Marshall, Press Secretary (907) 269-0133 or 321-3682 (907) 269-0132 press@akdemocrats.org |
| FOR IMMEDIATE RELEASE · October 9, 2003 |
Dividend Protection OK: Democrats Stand Firm on Fund
Renkes’ legal opinion supports Democratic Legislators’ stand
ANCHORAGE – In a letter issued this week by Attorney General Gregg Renkes to the Alaska Permanent Fund Corporation board of trustees, the state Department of Law head asserted that constitutional protection of the Permanent Fund dividend would not result in federal taxation of the fund.
Citing a legal opinion issued by Washington, D.C.-based law firm Steptoe & Johnson, Renkes stated that, "payment of the permanent fund dividend is not a [tax] concern under the existing statute, and the adoption of a constitutional amendment requiring payment of the dividend should not change this result."
In response to the announcement, Representative Eric Croft (D-Anchorage) said, "There is absolutely no reason for not protecting the dividend, unless the plan is to take it and use it for government."
"The federal tax question was used to thwart Democrats’ efforts to constitutionally protect Alaskan’s Permanent Fund dividend during the last Legislative session," continued Croft. "The IRS issue appeared to be the main objection raised by Senate Republicans. Now, presumably, they will be counted among our greatest allies."
Talk of restructuring the payout mechanism of the Permanent Fund took a front seat with House and Senate Republicans this summer. The change, known as "percent of market value" or POMV, also received the endorsement of Governor Frank Murkowski. At the same time as the POMV change is being discussed there is continued discussion of using some of the fund’s earnings for government. But constitutional protections for the dividend, with or without POMV legislation, do not appear in any Republican-sponsored legislation. The dividend, some say, has received only lip service thus far.
"Everything I’ve heard during this summer and fall indicate if we don’t protect the dividend by placing it in the Constitution it’ll be gone in a couple of years," said Representative Harry Crawford (D-Anchorage). "I don’t think any branch of government, neither the Legislature nor the Governor, knows how to spend people’s money better than the people themselves do. We need to ensure our children, and their children, will receive a permanent fund dividend."
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