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Plunging oil prices threaten Alaska’s Permanent Fund

I used to be the chairman of the Department of Teaching and Learning at the University of Alaska Anchorage back in the middle of the past decade. A considerable number of our faculty had what are referred to as “happy lights” on their desks. It was widely believed that keeping these lights on or near their desks would stave off seasonal affective disorder, a kind of depression or bipolar complex brought on by limited exposure to sunlight or any light. It is of understandable concern to many where and when winter nights are long and days are short.

We worked in a building where the only windows were in administrators’ suites. One day the dean summoned me to her office. She informed me about a then-new study claiming the happy lights, other than their placebo effect, were worthless.

I was told to make the rounds of faculty and staff offices and instruct their inhabitants to disconnect and discard their recently debunked appliances in the interest of energy savings. I’m guessing it was the same impulse that encouraged the building’s architect to eschew the windows. Other modern buildings in Anchorage had windows. Evidently, the university thought Alaska had an energy shortage.

When I entered said offices and explained my mission, some people gripped the edges of their desks, adamantly refusing the directive. Others were induced to shout at me, often including some unexpectedly creative expletives. Still others stomped their feet or clutched their presumed happiness devices to their bosoms.

These fond memories returned after reading some news accounts about how Alaska is in big money trouble as a result of low energy prices. I couldn’t believe it when some politicians actually said they might have to reduce or suspend Permanent Fund payments.

Perhaps the Permanent Fund is not so permanent after all.

For the cheechako and otherwise uninitiated, the Permanent Fund is an annual payment derived from deals with energy companies. Instead of paying state taxes, Alaskans get an annual check derived from the proceeds of these deals. The checks have ranged from $331 in 1984 to $2,072 in 2015 per Alaskan. The announcing of each year’s windfall is celebrated as a big event in Alaska.

The rest of the year, Alaskans spend a lot of time fantasizing about what the size of next year’s Permanent Fund check will be and what they will do with all that extra moolah. They sit around bars saying things like, “I’m gonna get me a diamond-encrusted snowmobile suit just like Porter Waggoner would wear if Nashville were in Alaska where it belongs.”

As a casualty of the Alaskan education wars, I’d bet dollars to mukluks if I asked the average Alaskan what was more important – the Permanent Fund or their kids’ educations – they’d hand over their booties. I even met people who claimed they came to Alaska just for those annual checks.

Talk about a big lie. When state and local governments need additional funds in Alaska, they just raise things like property and/or other taxes to cover their shortfalls. Sometimes these tax hikes even amount to more than a taxpayer received in his or her fund check that year.

Still, the rule has been you can’t mess with the Permanent Fund. Ever since I first set foot in Seward’s Folly, I’ve heard, “The Permanent Fund is the third rail of Alaskan politics.”

Some Democrats tried to touch it during a tax shortfall back in the 1980s and no Democrat, with the exception of Marc Begich, has served in a federal or statewide office since.

You could make the strong argument that he won only because Republican Sen. Ted Stevens (“The Internet is a series of tubes!”) was facing corruption charges. Stevens was later cleared.

It certainly will be interesting to see what will happen when some desperate Alaskan politicians try to take away some of those other happy lights.

Dan Schwartz, J.D., Ph.D., of Amherst, is a five-time graduate of the University at Buffalo and a multiple award-receiving educator. He currently teaches English at Niagara University and business at SUNY Buffalo State.