Really, why not the Mackie Plan?
While Democrats and unions turn up the heat in their effort to get your Permanent Fund dividends to bolster their dreams of ever-bigger government, it is time to take a cold, hard look at a plan that would benefit everybody.
Lawmakers are calling for a third special session to set out how future dividends will be calculated. As it stands now, they have the power to set the amount by political whim, ignoring a 1982 law that sets out in law how the calculation should work. Oh, they say, we need more money for government, we’ll just take some more dividends.
Over the past three years, they have done just that. You have lost more than half your potential dividends courtesy of former Gov. Bill Walker’s dividends veto in 2016 and then the Legislature’s reduced appropriation in the next two years. Now, lawmakers have sent to Gov. Mike Dunleavy a $1,600 dividend for this year, or about half what you would get under the 1982 calculation.
The so-called Mackie Plan would end all that.
In 2000, as Alaska wallowed in red ink brought on by sinking oil prices, then-Craig Republican lawmaker and majority leader Sen. Jerry Mackie crafted an ingenious plan.
As now, lawmakers then were itching to use the Permanent Fund to close the budget gap rather than cut government, but they feared touching the pot of money, which had become Alaska’s political third rail.
In a Sept. 14, 1999, advisory vote, 84 percent of those who went to the polls flatly rejected a proposal to use fund earnings to help pay for government.
Mackie’s plan came as a Senate joint resolution that would have become a constitutional amendment requiring two-thirds approval of the Legislature, along with voters’ approval. It would have handed about $14 billion from the then-$27.5 billion fund to Alaska residents.
What was left – $12 billion to $14 billion – would have helped pay to run state government.
Under the plan, each resident would have received about $25,000, the dividend program would have ended and the remainder of the Permanent Fund would have been be managed by the Alaska Permanent Fund Corp. for government.
Alas, the Mackie Plan sank into obscurity.
Today, the fund has grown to about $65 billion. If the plan were in place today, every resident of Alaska would get about a $45,000 payout, and more than $30 billion still would remain available for government operations.
For years, the dividends have been the tail wagging the dog. With the Legislature’s decision to base the annual payout on politics and whim, there will be an annual fracas that will drain all the air out of the room while the state’s most pressing problems remain unaddressed.
It is well beyond time to seriously consider the Mackie Plan. It would end the unseemly brawl each year over the Permanent Fund dividends, free up predictable amounts of money for government, and give each Alaskan a healthy nest egg.
Without it, the status will remain quo, and politicians, ever loathe to shrink government, will instead shrink the dividends into oblivion in only a matter of a few years.
It is time to talk Mackie Plan.