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The Alaska Permanent Fund Since 1977 Alaska has had a form of Basic Income - the Alaska Permanent Fund. The idea for an Alaska Permanent Fund (APF) was germinated in 1969. That year the state auctioned drilling rights to 164 tracts of state-owned land at Prudhoe Bay. The proceeds amounted to US$900 million. Considering that the state budget that year was only US$112 million, the windfall encouraged Alaskans to consider whether how the funds should be spent or saved. The initial revenues went on a series of infrastructure projects - but later Alaskans came to feel that the money had been wasted - this led to the creation of the APF.
The APF is made up of two parts: Principal, and Earnings Reserve. The Principal is the main body or the "dedicated" part of the Fund. Once monies have been allocated to the Principal they cannot be removed unless by a majority of all voters in a statewide plebiscite. Sources of the Principal include: i) Dedicated oil revenues automatically deposited in the Fund under the terms of the State Constitution; the legislated amount is 50% of all mineral royalties (25% prior to February 1980); ii) Legislative appropriation; and iii) Income transferred from the Earnings Reserve to provide inflation-proofing. The Earnings Reserve is an accumulation of net income that has not been allocated to the Principal. It is not money appropriated by the legislature, but represents unpaid (ie retained) earnings dividends. Decisions about the use of the Earnings Reserve are made each year by the people?s elected representatives - the State Legislature and the Governor.
One of the main uses of the Earnings Reserve is the payment of dividends to every citizen in the state. From 1982 through 2002, the Fund has paid out $11.8 billion in Fund income as dividends to qualified Alaskans. Payments have varied from $1,000 in 1982, $827 in 1988 to $1,850 in 2001. The level of payment is clearly less than subsistence level - making the APF a partial Basic Income at best. However, the revenue base for the APF - revenues from non-renewable resources - has led to other proposals along the same lines: the Sky Trust and North Sea Stock - which are explored below
North Sea Stock In 1978 Samuel Brittan - a British liberal free market economist - proposed that revenues from newly discovered oil reserves in the North Sea be used to fund a Basic Income scheme. He argued (with Barry Riley) in favour of a property-owning democracy enhanced through the creation of "North Sea Stock" and perhaps in the future through all future Government income from mineral discoveries, and even projects such as the Channel Tunnel. UK Sky Trust The Sky Trust initiative is a proposal to use market-based incentives to efficiently reduce the U.S. economy?s massive output of greenhouse gases. All entities introducing fossil fuels into the U.S. economy would be required to obtain emission permits for the carbon in that fuel. The U.S. government would auction emission permits for 1.346 billion metric tons of carbon, the 1990 emission level. Initially 75% of the receipts from government sales of emission permits would be returned in equal annual payments to each U.S. legal resident. In the plan?s first year, 25 percent of proceeds from sale of permits would be made available to offset any unusual burdens imposed on either producers (firms or employees) or on consumers (such as people who must drive long distances). Centre for Economic Development. US
The Alaska Permanent Fund and Dividend Distribution Program, J. Patrick O'Brien and Dennis Olson, Public Finance Quarterly Vol. 18, no 2 April 1990 The Alaska Permanent Fund: A Model of Resource Rents for Public Investment and Citizen Dividends, Alanna Hartzok, Earth Rights Alberta Heritage Fund vs. Alaska Permanent Fund: A Comparative Analysis, Allan Warrack and Russell R. Keddie APFC. A People's Stake in North Sea Oil, by Samuel Brittan and Barry Riley, Manchester Statistical Society, 1978. |