Jay Hammond: Alaska's pioneer politician
(Page 2 of 2)
Still, he says there's a need for Alaskans to be more atuned to the kind of heavy state spending taking place today. Even though it's coming out of the well-padded state coffers, it could be a pattern that leaves tomorrow's Alaskans in the poorhouse.Skip to next paragraph
Subscribe Today to the Monitor
But the governor stands by the Permanent Fund, and he loves the opportunity to explain to an outsider the philosophy behind it and why it fits very well with independent Alaskan sensibilities.
``They [outsiders] call this oddball program a government handout program,'' he says of criticisms from the outside of the Permanent Fund's dividend distribution. ``It's a takeaway program from the politicians.''
One in every eight barrels of oil goes to the state as a royalty and one-quarter to one-half of all royalties go into the Permanent Fund and cannot be spent.
Nearly $4 billion had been paid into the fund by 1983 and half of the interest earnings can be spent on dividends and other government outlays.
``We would never have accumulated the fund if not for the dividend. The dividend establishes an awareness that it's the public's money,'' Hammond explains.
``You have to put a check in the people's hands to make them understand. Give them a check and compel them to pay'' out of that check for the programs politicians typically pass, he says.
``This reestablishes the connection that it's public money being spent. It creates a first defense against invading the fund,'' says Hammond, reasoning that the public dividends will be the first place to cut back if the state government wants money for programs.
The public, he says, is less likely to give up its dividends without scrutinizing exactly what they'll be spending on.
``Selected subsidies'' like low-interest loans, medical care programs, ferry systems, and the like were not ``mandated by the Founding Fathers in the Constitution,'' he says. For example, Hammond says that ``to make enormous power projects appealing with postage- stamp rates for power is nothing but another form of a dividend unequally distributed.''
And he adds that there would be a very rapid decrease in funding of these things if the average citizen was asked to pay for them directly out of his dividend. ``It's the ultimate in grass roots, it's grass-roots revenue sharing,'' he says.
``When the pinch comes, they'll cut back on subsidies not on dividends,'' he says.
And the pinch will come to this state that has been living off a revenue boom that ``went right off the Richter scale,'' Hammond indicates.
He says he supports reinstating the state income tax, which was repealed as oil revenues started flowing into state coffers.
A state income tax would create a way to protect the Permanent Fund but also, in the same way the dividend does, it would create a psychological connection among the public to government spending.
The public here needs to be more sensitive to government spending -- to feel its effects, he suggests. Government services feel good at a time when oil revenues are high, but when they slip, the individual citizen is going to see a sharp cutback in services and money.
``Healthy growth is environmentally sound and can pay its own way. But we've made it exceedingly difficult for anyone to pay its way -- there's no state income tax . . . sales tax . . . property tax.
``There's an enormous cost for services and nothing to help offset the cost. We're unique among states for that. Normally you stimulate economic growth and it creates revenue. . . . Here it doesn't, it just depletes our finite wealth.''
His economic perspective, he says, combined with his concern for the environment, ``gave me a reputation for a flaming environmentalist, as a zero growth [advocate]. . . . But if I aspired to that, then we failed miserably. I don't know where we'd be if we were promoting it.''
His middle-ground stance -- fiscal conservatism with an environmental conscience -- makes him sound distinctly like the Libertarians who have found more success in Alaska than any other state.
But Republican Hammond, like the many Alaskan politicians who've come after him, prefers not to mention party labels and even suggests that the Libertarians ``plagiarize from Hammond's own lexicon.''