From: jsdph@acad3.alaska.edu (Dennis P. Harris)
Subject: State Finances ( was Re: Healthy Winter)
News-Software: VAX/VMS VNEWS 1.41.UAC
Organization: University of Alaska - Fairbanks
Date: Sun, 27 Dec 1992 06:41:00 GMT

In article <1992Dec27.021416.8710@CSD-NewsHost.Stanford.EDU>, 
les@cs.stanford.edu writes...
>Michael Adams writes:
>  Well more states can do what we have done, they just have to do it.. Its like
>  savings, take a little of your money every payday and put alittle aside.. Try
>  to live of less and it will come to you.. Whenyou have enough to to start
>  playing dividends, then do it.. 
> 
>This is undiluted nonsense.  What Alaska has done is to exploit its
>natural resouces and use the proceeds to create a welfare state that
>is headed for a crash.
> 
>The primary source of state income is, of course, North Slope oil.
>The annual dividend has been paid to residents even in years when the
>price of oil fell to the point where expenses substantially exceeded
>income, but the state legislature treats the dividend as politically
>untouchable.
>
You must not understand how dividends are funded.  Dividends are paid from a
portion of the earnings of the state's Permanent Fund.  Alaska's Constitution
requires that at least 25% of the state's nonrenewable resource income be
deposited in the Permanent Fund.  Some of the earnings are used to inflation
proof the fund, some are reinvested, and some are paid out in dividends.

The purpose of the dividend was to ensure that the legislature would delay
using the earnings of the fund for state government operating expenses as long
as possible, so that the corpus of the fund could reach maximum value.  So far,
that strategy has worked.  Unfortunately, we also got rid of our state income
tax about the same time, so that all the Texans working 2 weeks on/2 weeks off
on the North Slope who headed home to Texas on their off weeks never had to pay
any income tax while they took jobs away from Alaskans who had pay Alaskan
living expenses and pay for all of the infrastructure and social services to
support the oil industry.

>This problem is compunded by the fact that every gallon of petroleum
>products sent to native villages is subsidized by the state so as to
>encourage the use of heating oil, power boats, and snow machines
>in place of older resources.  The state has also put in satellite
>television with cable distribution in most villages so that the people
>can watch TV instead of telling each other those silly old myths that
>they used to pass long winter nights before the '80s.
>
And since the death rate and longevity of these villagers is much higher than
it was in the "good old days", and many of these villages have *no* energy
resources for home heating (wood doesn't exist in the tundra, and I'm sure an
elitist academic like you would cringe at the thought of stripping the willow
brush for miles around a village), what would you have them do to heat the
homes of the much larger population?  What do you heat the 60-student local
school with?  Seal oil?  Get real...

There are not enough salmon available to feed the dogs that would be necessary
to feed all the teams that all the villages in Southwest, Interior, and Arctic
Alaska would need to subsistence hunt.  And I bet you'd just love using your
"older resources" to row 20 miles up the Yukon or Kuskokwim to get a sick
relative to a doctor.  Get off the elitist "noble savage" kick!

And as for TV...  since the BIA and the missionaries did a good job of trying
to destroy cultural pride prior to the land claims settlement, the low self
esteem thus engendered has resulted in very high alcholism and domestic
violence problems in the bush.  Many village leaders have testified that TV
provides a recreational alternative to drinking, as well as help children learn
what the gussuck world is like.  And many parents also remind their children
that the kind of warped values shown on TV are *not* suitable for village life,
and are one reason why white society is so screwed up.

>What the state has not done is to create industries that will permit
>the native people to support themselves in their new lifestyle when the
>oil money runs out in a decade or two.  I fully expect the Alaska
>legislature to run straight into that brick wall without blinking,
>then request subsidies from the Federal government to deal with their
>"unfortunate and unforeseen" poverty.

What the Feds used to do was give away the resources in an area to rich white
capitalists.  Now at least some villages have been allocated some Bering Sea
groundfish resources so that they can build shore-based processing plants
instead that provide jobs, instead of letting Seattle-based catcher-processor
boats strip our waters clean.

And our state legislature refuses to let Alaskans vote on a constitutional
amendment that would give hunting and fishing preference to rural residents, so
that we can once again manage Alaskan game on Federal lands in the state.  Much
of the rural economy is not cash based --- it's resource based.  People who can
hunt and fish in their region without having recreational or commercial
fishermen or "sport" hunters coming in to rip off their villages food resources
won't need handouts.

>--
>Les Earnest           Phone:  415 941-3984    Fax: 415 941-3934
>Internet: Les@cs.Stanford.edu              USMail: 12769 Dianne Drive
>UUCP: . . . decwrl!cs.Stanford.edu!Les         Los Altos Hills, CA 94022

You should learn a little bit about the economics and culture of the bush
before you pontificate, Les.  Like try teaching school in a bush village for a
year.  On second thought, don't...  they'd probably run you out of the village.

================================================================================
dennis p. harris				  bitnet: jsdph@acad3.alaska.edu

  "The nation that controls magnetism controls the Universe." --- Diet Smith
================================================================================

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