Case Name: Thomas WILLIAMS, Commissioner of Revenue, and State of Alaska, Appellants, v. Ronald M. ZOBEL and Patricia L. Zobel, husband and wife, Appellees
Court: Alaska Supreme Court
Jurisdiction: Alaska
Decision Date: 1980-10-24
Citations: 619 P.2d 448
Docket Number: No. 5400
Parties: Thomas WILLIAMS, Commissioner of Revenue, and State of Alaska, Appellants, v. Ronald M. ZOBEL and Patricia L. Zobel, husband and wife, Appellees.
Judges: Before RABINOWITZ, C. J., CONNOR, BURKE and MATTHEWS, JJ., and DIMOND, Senior Justice.
Reporter: Pacific Reporter 2d
Volume: 619
Pages: 448–472

Head Matter:
Thomas WILLIAMS, Commissioner of Revenue, and State of Alaska, Appellants, v. Ronald M. ZOBEL and Patricia L. Zobel, husband and wife, Appellees.
No. 5400.
Supreme Court of Alaska.
Oct. 24, 1980.
See also, Alaska, 619 P.2d 422.
Susan Burke, Asst. Atty. Gen., Avrum M. Gross, Sp. Asst. Atty. Gen., Wilson L. Con-don, Atty. Gen., Juneau, for appellants.
Mark Sandberg, Camarot, Sandberg & Hunter, Anchorage, for appellees.
Robert C. Erwin, Erwin & Smith, Anchorage, for amicus curiae Kenai Peninsula Borough.
Before RABINOWITZ, C. J., CONNOR, BURKE and MATTHEWS, JJ., and DIMOND, Senior Justice.

Opinion:
OPINION
RABINOWITZ, Chief Justice.
This is an appeal from the summary judgment of the superior court which invalidated, as a matter of equal protection and the right of interstate migration, the permanent fund income distribution statute, AS 43.23.010- .100, passed in April, 1980, by the Alaska legislature. We reverse the superior court's summary judgment as to the permanent fund distribution statute.
In so doing, we are ré-affirming our modification of the equal protection test which had traditionally been applied in the right-to-migrate context by this court. Before discussing the permanent fund income distribution statute itself (section II), we review our reasons for modifying the test (section I).
I. The Federal and State Equal Protection Tests as They Relate to the Right of Interstate Migration
Initially, our analysis of state equal protection law tracked that of federal law by the United States Supreme Court closely in all areas, including that of classifications penalizing the exercise of the right of interstate migration. As we used the tradition al "two-tier" analysis under our equal protection clause, there was no need to differentiate between the federal and state modes of analysis.
Following some broad language in the United States Supreme Court case of Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 Ed.2d 274 (1972), we interpreted this line of cases as holding that any dura-tional residency requirement imposed a penalty on the right of interstate migration, and thus automatically invoked the "strict scrutiny" analysis:
All durational residency requirements inherently infringe upon the fundamental constitutional right of interstate travel. Hence, all such requirements are prima facie invalid and will be countenanced only when they serve a compelling state interest.
State v. Adams, 522 P.2d 1125, 1131 (Alaska 1974) (footnotes omitted).
However, the United States Supreme Court made it clear that this interpretation was incorrect as a matter of federal equal protection law. In Memorial Hospital v. Maricopa County, 415 U.S. 250, 94 S.Ct. 1076, 39 L.Ed.2d 306 (1974), the Supreme Court, although invalidating that durational residency requirement, made it clear that some durational residency requirements would not penalize the right of interstate migration, and thus would not invoke strict scrutiny. This was made even clearer in the case of Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975), which upheld a one-year durational residency requirement for filing a divorce petition. Thus, under federal law, a durational residency requirement does not automatically invoke strict scrutiny.
That our interpretation in this area was stricter than the federal interpretation is also shown by the rulings in our cases, which struck down durational residency requirements which the United States Supreme Court probably would have upheld. For example, in State v. Adams, 522 P.2d 1125 (Alaska 1974), we struck down a one-year durational residency requirement for eligibility to file for a divorce, very similar to the one upheld by the United States Supreme Court in Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975).
Our cases, still functioning under the two-tier approach, continued to regard du-rational residency requirements as automatically triggering strict scrutiny, and rejected the distinctions by which federal equal protection cases in this area separated strict scrutiny cases from rational basis cases. Implicitly, our course was based on a recognition that removing these cases from the strict scrutiny approach would require that they be judged by a rational basis standard, which would give insufficient weight to the important right involved. But the need for an "intermediate approach" between these two extremes was apparent in an increased willingness to find a "compelling state interest," a very difficult standard to fulfill under federal law.
In State v. Erickson, 574 P.2d 1 (Alaska 1978), we adopted a new equal protection analysis, using one uniform balancing approach rather than the two-tier approach which had been increasingly subjected to criticism on several grounds.
Since Erickson, and prior to our decision in Zobel I, we had decided two cases which involved the right of interstate migration, and in both the question of Erickson's application to this area was postponed. See Thomas v. Bailey, 595 P.2d 1 (Alaska 1979); Castner v. City of Homer, 598 P.2d 953 (Alaska 1979).
In Zobel I, we announced our decision to apply Erickson to the right-to-migrate context.
In our view the uniform balancing approach adopted in Erickson is much more appropriate in this context than the two-tier analysis used in our prior cases. Further, we will no longer regard all durational residency requirements as automatically triggering strict scrutiny and requiring a showing that such a classification is absolutely necessary to promote a compelling state interest. Instead, we will balance the nature and extent of the infringement on this right caused by the classification against the state's purpose in enacting the statute and the fairness and substantiality of the relationship between that purpose and the classification.
In those situations in which federal law would apply strict scrutiny, this court must also. This divergence of the two sets of analyses will necessitate separate consideration of the permanent fund earnings distribution statute under federal and state equal protection law.
II. The Permanent Fund Earnings Distribution System
The recent tremendous wealth bestowed upon Alaska by the development of oil and mineral resources has created governmental problems unique to this state. Both the original establishment of the permanent fund and the later statute establishing a system for distributing the earnings from the fund represent novel mechanisms to deal with this wealth.
The creation of the fund was a response to two specific concerns. First, the people of the state recognized that Alaska's oil and mineral wealth is based on nonrenewable resources which will become depleted at some point in the future, potentially leaving Alaska with the choice of either terminating certain governmental programs or continuing them through increases in taxation. The permanent fund channels some of the current wave of moneys into just what its name implies-a permanent fund, the earnings from which will help to defray the costs of government at that future time when the nonrenewable resources run out.
The second concern was the temptation to use the current flood of funds for costly, wasteful, and unnecessary government projects. Typically, some limit is placed on this tendency by the fact that funding for such programs must come from the taxpayers. With this damper removed, the people of Alaska recognized the need to substitute some other form of restraint. Thus, the constitutional provision establishing the fund places the principal of the fund beyond the legislature's appropriation power, which can be exercised only over earnings derived from the fund.
The legislature's subsequent decision to use its appropriation power over the earnings to distribute some of the earnings directly to Alaska residents was also unique. Undoubtedly, the legislature was aware that such action would be popular with its constituency. However, there is merit in the state's contention that there was an additional motive for choosing to distribute some of the earnings. The earnings alone have been substantial enough to engender concern over the unwarranted and "painless" growth of government. By distributing some of the fund's income directly to residents, the state could insure that future legislatures will face a spending limit. To exceed this limit, the legislature would have to "take back" some of the fund's income distributed to Alaskans. This would, in effect, simulate a legislative choice to enact a tax.
The mechanism established to effect this distribution of earnings is as follows: one-half of the fund's earnings are to be distributed in dividends of at least fifty dollars. To be eligible, a person must be eighteen years of age and a resident of Alaska. AS 43.23.010(b). There is no "durational residency" requirement; a bona fide resident of Alaska is immediately eligible for a pro rata portion of his or her first dividend. AS 43.23.010(f). However, the number of dividends received by an eligible person is determined by length of residency, with one dividend allowed for each full year of residency since statehood (1959). AS 43.23.-010(a). It is this connection between the length of residency and the number of dividends received which is at issue here.
On April 28, 1980, Ronald and Patricia Zobel, residents of Alaska since 1978, filed suit challenging this statute on the ground that it violates the equal protection clauses of both the United States and Alaska Constitutions. On June 27, 1980, the superior court issued its decision declaring the statute invalid under the equal protection clause of the Alaska Constitution. The state has appealed that decision to this court. Application of the Erickson test leads us to conclude that the statute is constitutional.
A. Federal Equal Protection Claim
As federal equal protection law still uses the two-tier analysis, the initial inquiry must be to determine which of the two standards is to be applied. Although the question is not a clear one, we conclude that the rational basis standard is applicable.
We recognize that the United States Supreme Court applied a strict scrutiny analysis in the cases of Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969), Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972), and Memorial Hospital v. Maricopa County, 415 U.S. 450, 94 S.Ct. 1076, 39 L.Ed.2d 306 (1974), and that there is language, particularly in Dunn, which indicates that any durational residency requirement automatically triggers the strict scrutiny analysis. But Shapiro and Maricopa County explicitly left open the possibility that there might be durational residency requirements which do not trigger strict scrutiny because they would not "penalize" the exercise of the right of interstate migration; and the strict scrutiny analysis was not applied in the most recent United States Supreme Court pronouncement on the subject, Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975).
We think that language in Shapiro and Maricopa County and the ruling in Sosna indicate that a durational residency requirement does not automatically trigger strict scrutiny. To determine whether or not the stricter test is applicable, we must look at the factors which have been advanced in the Supreme court cases as explaining the different results. Our analysis of the cases reveals four possible "distinguishing factors," any one of which may invoke the strict scrutiny test.
First, Sosna distinguished the earlier cases on the basis that they had involved state justifications based only on administrative, budgetary, or recordkeeping needs. To the extent that this distinction does apply here, the justifications put forward by the state go beyond budgetary, recordkeeping, and administrative concerns, and thus, under this distinction, the case at bar falls into the Sosna non-strict scrutiny camp.
The second distinction is the one suggested in Maricopa County-the "basic necessities" distinction. If the benefit of which new residents are deprived by the state is a "basic necessity" of life-e. g., the welfare payments in Shapiro, or the medical care in Maricopa County-then the strict scrutiny test is appropriate; otherwise, it is not. Under this distinction, this case clearly falls into the non strict scrutiny category, as a permanent fund earnings dividend is not a "basic necessity."
The third distinction is suggested by two passages in Sosna and by some language in Vlandis v. Kline, 412 U.S. 441, 93 S.Ct. 2230, 37 L.Ed.2d 63 (1973) This distinction in dicates that there is a dispositive difference between a state absolutely denying a benefit and a state merely delaying provision of the benefit. Thus, a durational residency requirement of one year prior to eligibility to file a divorce action is permissible, since the right to file is merely delayed, not defied. This is a difficult distinction to apply in most cases, as any durational residency requirement can, it seems to us, be equally well characterized as either a "delay" or a "denial." The distinction becomes especially difficult when "denial" is interpreted to require that a party be "irretrievably foreclosed from obtaining some part of what the [the injured party seeks]," Sosna, 419 U.S. at 406, 95 S.Ct. at 560, 42 L.Ed.2d at 544 (emphasis added). Additionally, the fact that substantial hardship may be worked by the delay, a point raised by the dissent in Sosna, was apparently not regarded as significant by the majority.
A close question is presented by the "delay" versus "denial" distinction, partly due to its inherent difficulty in application, and partly due to the nature of the program under scrutiny. Although the result is not as clear as under the other two distinctions already considered, we still conclude that this case falls in the non-strict scrutiny camp.
Under the terms of the program, it is clear that there is no absolute denial. A new resident is immediately eligible for some portion of a dividend; and this new resident's achievement of the level of dividends currently held by a long-term resident who has been here since 1959 (twenty-one dividends, or a minimum of $1050) is only a matter of delay-i. e., the new resident would have to remain a resident for twenty-one years. On the other hand, it could be said that the new resident will never achieve parity with the current long-term resident, as the latter will always be twenty -one dividends ahead of the former if both remain in the state. Under this view, the new resident is consistently "denied" that twenty-one-dividend differential. Both characterizations of the program are accurate, and one could label the situation either a delay or a denial.
However, the significance of the latter characterization is considerably diluted by several factors. First, as the state points out, it is entirely possible that the new resident will "catch up" and even surpass the number of dividends granted to the long-term resident, depending on the longevity of each. Additionally, the size of each dividend will vary from year to year, and is expected to increase during the foreseeable future so that the attainment of twenty one dividends in the year 2001 is likely to be worth much more than the attainment of twenty-one dividends in 1980. Last, the new resident who arrives in 1980 and stays twenty-one years will not only get twenty-one dividends in 2001, but will have received a total of 210 dividends during the intervening years. In that respect also, the new resident may be better off, in that the twenty-one-year resident of 1980 receives twenty-one dividends in 1980, but no "back payments" for the 210 dividends he or she would have received had the program been established in 1959.
Taking these factors into account, we cannot say that a new resident can be properly characterized as being consistently denied parity with long-term residents. Although the delay/denial distinction is analytically difficult to apply in this context (indeed, one may question whether it has any applicability at all here), we are sufficiently satisfied that this is more properly classified as a delay than as a denial, and thus strict scrutiny analysis is not triggered here.
The last possible distinction is suggested by the characterization of Dunn found in Maricopa County indicating that a state's denial of "fundamental rights"-e. g., voting rights-to new residents but not to old will invoke strict scrutiny. This distinction perhaps renders the right-to-migrate aspect of the case unnecessary, as it would seem that the denial of the additional "fundamental right" would in and of itself be enough to trigger strict scrutiny, with or without the presence of the right to migrate. But assuming, arguendo, the validity of the distinction, it seems clear that this case again falls into the Sosna non strict scrutiny category. If the right involved in Sosna -that of filing a lawsuit for divorce-does not trigger strict scrutiny, then the denial of initial equality in the distribution of permanent fund earnings, at stake here, also fails to do so under this distinction.
Thus, whatever distinction is applied, this case falls outside the strict scrutiny standard. Under traditional federal equal protection analysis, this means that the case comes within the lower tier, to be assessed under the rational basis standard. As such, we think it is clear that this statute withstands constitutional scrutiny. However, we postpone discussion of the state's purposes until our analysis under the Erickson test. It is not necessary for us to assess the state's purposes under the rational basis standard here. If the purposes and the relationship between means and ends satisfy the stricter Erickson test, then they a fortiori meet the requirements of the less strict rational basis test; and if the statute fails to pass muster under the state test, then it is invalid regardless of whether it passes federal constitutional muster.
B. State Equal Protection Analysis Under Erickson
Examination of the nature and extent of the infringement of the constitu tional right involved has led us to conclude that this legislative scheme cannot be said to "penalize" the right of interstate migration. In commonsense terms, it is easy to see that the imposition of a tax primarily on new residents, with older residents exempt, can be perceived as a penalty imposed on a person who chooses to exercise his or her right to move into Alaska. It is much more difficult to perceive such a "penalty" here. The new resident does, in fact, receive financial gain for exercising his or her right to move into Alaska; and whatever "penalty" may accrue from the fact that this gain is not as large as that realized by a long-term resident we regard as de minim-is.
In making this judgment, we are aware of the statements by the United States Supreme Court that a showing of "deterrence" is not necessary to a finding of an infringement upon the right to migrate; but it is also true that the Court has consistently relied upon the severity of the penalty inflicted upon the individual for exercising the right of interstate migration in reaching its results in various cases. In our view the permanent fund earnings distribution statute can only be characterized as a penalty with great awkwardness. We are therefore convinced that the exercise of the right of interstate migration is not penalized by the statute in question.
Turning to the state's purported interests in establishing the system and the fairness and substantiality of the relationship between the ends (/. e., the "purpose" or state interest) and the means (i. e., the classification), we find three purposes listed in the statute itself:
(1)to provide a mechanism for equitable distribution to the people of Alaska of at least a portion of the state's energy wealth derived from the development and production of the natural resources belonging to them as Alaskans;
(2) to encourage persons to maintain their residence in Alaska and to reduce population turnover in the state; and
(3) to encourage increased awareness and involvement by the residents of the state in the management and expenditure of the Alaska permanent fund (art. IX, sec. 15, state constitution).
The state argues that the link between residency and number of dividends bears a fair and substantial relationship to the legitimate purpose of making an "equitable distribution," the first listed purpose. In so arguing, the state urges the court to recognize the "contributions of various kinds, both tangible and intangible," which residents have made during their years of state residency:
Many have paid taxes; many have contributed to the cultural life of the state and have fostered the cultural diversity that makes Alaska so unique; many have contributed their ideas and have participated in the political life of the state; all have endured the rigors of a harsh climate; and all have borne the impact of a high cost of living. It is perfectly reasonable for the legislature to have concluded that it would be unfair in distributing permanent fund income to fail to recognize those years of residence during which people have had and will have a share in the mineral resources-years during which residents have made and will make contributions to the state.
In response, the Zobels cite us to Cole v. Housing Authority of the City of Newport, 435 F.2d 807, 813 (1st Cir. 1970), in which Judge Coffin, although granting that giv ing a preference to .older residents may have a certain facial appeal, held that "such a vague sentiment, even if permissible, does not rise to the level of compelling state interest."
Although the question is a close one, we must hold that the purposes underlying this statute are legitimate under state law, and also that a fair and substantial relationship exists between those purposes and the classification made under the distribution scheme. Throughout its history, from the days of the Gold Rush to the recent oil pipeline period, Alaska has been prone to the phenomenon that large numbers of people from without the state move in, derive great financial and other benefits from the state's resources and opportunities, and then move out to enjoy the fruits of their labors elsewhere. This obviously results in a great drain of financial and other resources from the state. Of course, every state is equally subject to this phenomenon as a necessary by-product of the right of interstate migration; but Alaska is especially affected by this, due to its harsh climate, its high cost of living, and its geographical isolation from the other states. Although the problem is not unique to Alaska, the extent to which this problem affects the state is probably unparalleled.
Since this problem is a necessary by-product of the free exercise of the right of interstate migration, neither Alaska nor any other state may attempt to ameliorate it by penalizing an individual for choosing to exercise the right to migrate. However, this does not preclude an attempt to reward those Alaskan residents who have chosen to stay, to enjoy the fruits of their labor here, and to make a lasting contribution, tangible or intangible, to the state's culture and commonwealth. Such an attempt does not penalize those who choose to leave any more than a firm's awarding of a gold watch to a fifty-year employee penalizes employees who leave before working for fifty years.
Thus, we find this purpose permissible. We need not take issue with Judge Coffin's statement in Cole that it does not rise to the level of a "compelling state interest," inasmuch as we have ruled that durational residency requirements do not, under Erickson's approach, automatically trigger strict scrutiny.
In finding that the state may reward long-term residents for their past intangible contributions, we are guided by the analysis set forth in our opinions in the other half of this case, concerning former AS 43.20.017 (ch. 22, SLA 1980), the tax exemption statute. In that context, the parties argued over the legitimacy of the state recognizing past tax contributions in granting tax relief. The plurality opinion found this purpose absolutely impermissible, under Shapiro v. Thompson, 394 U.S. 618, 632-33, 89 S.Ct. 1322, 1330, 22 L.Ed.2d 600, 614 (1969). See Williams v. Zobel, 619 P.2d 422, 428-29 (Alaska 1980). The concurrence rejected this absolutist position, id. at 434 (Rabinowitz, C. J., concurring), noting that it would be inconsistent with the Supreme Court's affirmance in Starns v. Malkerson, 326 F.Supp. 234 (D.Minn.1970), aff'd without opinion, 401 U.S. 985, 91 S.Ct. 1231, 28 L.Ed.2d 527 (1971), cited with approval, Vlandis v. Kline, 412 U.S. 441, 452 n.9, 93 S.Ct. 2230, 2237 n.9, 37 L.Ed.2d 63, 72 n.9 (1973), in which the district court specifically relied upon a past tax contributions rationale. We also note that the absolutist position is undercut by the Supreme Court's opinion in Reeves, Inc. v. Stake, - U.S. -, 100 S.Ct. 2271, 65 L.Ed.2d 244 (1980), which upheld South Dakota's policy of selling cement from its state-owned plant only to state residents, against a commerce clause attack. The Supreme Court stated, "The State's refusal to sell to buyers other than South Dakotans is 'protectionist' only in the sense that it limits benefits generated by a state program to those who fund the state treasury and whom the State was created to serve."- U.S. at -, 100 S.Ct. at 2280, 65 L.Ed.2d at 254 (emphasis added). We think that this analysis is persuasive in concluding that rewarding past intangible contributions is also a permissible purpose, albeit not a particularly compelling one.
The Zobels argue, and the superior court found, that even if the purpose is permissi ble, there is no fair and substantial relationship between recognizing past contributions and the classification based on length of residency:
[T]he state admits that, in order to qualify for a share in the resources trust, it is not even necessary that a person have made any contribution to the state at all. All that is required is that a person be a resident.
Although we recognize that length of residency may be an imperfect measure of past contributions, we have concluded that the state may recognize these contributions. The fit between means and ends need not be perfect. We think the relationship is fair and substantial. There clearly is a correlation between one's length of residency and the extent to which that individual has been able to make contributions to the community. We are not convinced that any workable alternative method of measuring past contributions is clearly preferable. Although the existence of a preferable alternative would not automatically render the relationship unfair or insubstantial, the absence of any preferable workable alternative is a strong indication that the classify cation chosen by the legislature is acceptable. We think that the relationship is as fair and substantial as the Alaska Constitution requires in this context.
The second of the listed purposes is clearly related to the classification system. A significant financial incentive is created to encourage persons to establish and maintain residency in Alaska; and the stabilization of long-term residents clearly reduces population turnover. The Zobels do not argue that this is an impermissible purpose, but rather that it does not rise to the level of "compelling." They argue that the state enjoys wide latitude in possible approaches to the population turnover problem, but that penalizing new residents for having recently exercised the fundamental right to migrate is not among them. As above, we do not regard this system as imposing a "penalty" on new residents. Thus, we hold this purpose to be permissible and the relationship clear, as these points seem uncontested.
The third justification proffered is, perhaps, the most interesting: that the distribution scheme "encourages increased awareness and involvement by the residents of the state in the management and expenditure of the Alaska permanent fund."
The state puts forward two related purposes which revolve around "prudent management" of state resources. First, this classification system installs a greater motivation for the public to urge "prudent management" of the fund itself. Were the distribution made per capita, the state argues,
as population increases, each individual share in the income stream is diluted. The income must be divided equally among increasingly larger numbers of people. If residents believed that twenty years from now they would be required to share permanent fund income on a per capita basis with the large population that Alaska will no doubt have by then, the temptation would be great to urge the legislature to provide immediately for the highest possible percentage return on the investments of the permanent fund principal, which would require investments in riskier ventures .
Under AS 43.23, each resident will receive an increasing number of dividends the longer he or she resides in the state. Each person's share will have increased substantially after twenty years, instead of having been diluted as it would have been under a per capita distribution system. Under AS 43.23, all generations of residents, not only today's residents but future residents as well, will therefore have an interest in insuring that the payment fund is managed prudently so that a healthy income stream will be available twenty, thirty, and forty years after they have begun to accumulate their individual dividends.
A similar point is raised by the state in regard to prudent management of the state's natural resources. A per capita distribution is more likely to encourage the public to press for immediate and rapid development of the state's mineral resources, as each set of dividend recipients would want to see as much revenue as possible flowing immediately into the fund. Allowing benefits to increase with residency installs a counterbalance to this motiva tion, in that each year's recipients may stand to gain more by slowing development somewhat and increasing the size of the dividend in subsequent years, when those residents will presumably be getting an additional dividend for their additional year of residency.
The superior court and the Zobels seem to have misunderstood this point. The superi- or court apparently interpreted the argument as meaning that granting full benefits to the newcomers would result in the newcomers putting pressure on the legislature. This is the same misconception that is reflected in the Zobels' response:
The idea that if new residents are treated fairly, they will just get greedy and try to drain the fund is without basis in logic or fact. It has no basis in the record and represents little more than a gratuitous insult to everyone who has not been here since 1959.
This fundamentally misconstrues the argument the state makes. All recipients, not just long-term or short-term residents, would be subject to these incentives and motivations.
We think that installing this "counterbalance" incentive system is a permissible goal, and that the classification system is fairly and substantially related to it.
Having assessed the factors on both sides of the Erickson scale, the balance must be struck. The guidance which can be gleaned on this point from prior case law is limited. This distribution scheme, and indeed the permanent fund itself, are novel solutions to an unusual problem created by several relatively recent political concerns. The convergence of these concerns-administering and husbanding Alaska's new-found wealth, avoiding the "cost-free" expansion of government, coping with an acute population turnover problem, and containing and counterbalancing the push for immediate development of Alaska's resources-has been dealt with legislatively by enacting a relatively simple, but unusual distribution scheme. Unlike the tax exemption statute, this program has little or no precedent in American political thought.
If the privileges and immunities cases indicated that a distinction drawn between residents and nonresidents would be impermissible for a benefit distribution plan like this one, we would have an a fortiori argument that such a classification based on term of residency would be impermissible. However, our reading of the applicable law leads us to conclude that a state would be justified in drawing a distinction between residents and nonresidents in distributing the permanent fund earnings dividends. See Baldwin v. Fish & Game Commission of Montana, 436 U.S. 371, 98 S.Ct. 1852, 56 L.Ed.2d 354 (1978); cf. Califano v. Torres, 435 U.S. 1, 98 S.Ct. 906, 55 L.Ed.2d 65 (1978); Starns v. Malkerson, 326 F.Supp. 234 (D.Minn.1970), aff'd without opinion, 401 U.S. 985, 91 S.Ct. 1231, 28 L.Ed.2d 527 (1971). This does not make the distinction drawn here automatically permissible; it merely means that simple residency requirement cases do not provide clear guidance.
The case law does inform us that since "we deal here with a constitutional attack upon a law providing for governmental payments of monetary benefits [, s]uch a statute 'is entitled to a strong presumption of constitutionality.' " Califano v. Torres, 435 U.S. 1, 5, 98 S.Ct. 906, 908, 55 L.Ed.2d 65, 69 (1978), quoting Mathews v. De Castro, 429 U.S. 181, 185, 97 S.Ct. 431, 434, 50 L.Ed.2d 389, 394 (1976); see also Fisher v. Reiser, 610 F.2d 629 (9th Cir. 1979).
Beyond that general principle, the case law is less helpful here than in the balanc ing of the tax exemption scheme. Given that this distribution system works no infringement on the exercise of the right of interstate migration, the purposes put forward by the state need not be as strong as would be required if the provision penalized the exercise of that right. On that basis, coupled with our conclusions that the purposes put forward by the state are legitimate and sufficiently weighty, and that the classification system has a fair and substantial relationship to these purposes, we conclude that the permanent fund income distribution statute is constitutional.
Thus, for the foregoing reasons we conclude that the permanent fund income distribution statute is valid under both the Alaska and United States Constitutions.
The judgment of the superior court as it pertains to the constitutionality of the permanent fund statute is therefore Reversed.
BOOCHEVER, J., not participating.
. Ch. 21, SLA 1980.
. The superior court also invalidated, on equal protection grounds, another statute establishing a system of tax exemptions based on prior filing of tax returns (ch. 22, § 1, 4-9, SLA 1980). In a separate set of opinions, we upheld that judgment. Williams v. Zobel, 619 P.2d 422 (Alaska 1980).
. See Hicklin v. Orbeck, 565 P.2d 159 (Alaska 1977), rev'd on other grounds, 437 U.S. 518, 98 S.Ct. 391, 57 L.Ed.2d 397 (1978); Gilbert v. State, 526 P.2d 1131 (Alaska 1974); State v. Adams, 522 P.2d 1125 (Alaska 1974); State v. Wylie, 516 P.2d 142 (Alaska 1973); State v. Van Dort, 502 P.2d 453 (Alaska 1972).
.The term "right to migrate" is used to emphasize that we are dealing with a possible limitation on the right to move into and settle in Alaska, not just the right to travel into the state.
The phrase 'right to travel' is often used. But in cases challenging durational residency requirements, the right at stake is to travel into a different state and make one's home there, not merely to travel.
Hicklin v. Orbeck, 565 P.2d 159, 162-63 n.5 (Alaska 1977), rev'd on other grounds, 437 U.S. 518, 98 S.Ct. 391, 57 L.Ed.2d 397 (1978).
. See Note, Durational Residency Requirements: The Alaskan Experience, 6 U.C.L.A. Alaska L.Rev. 50, 52-53 (1976).
. "In sum, durational residence laws must be measured by a strict equal protection test: They are unconstitutional unless.the State can demonstrate that such laws are 'necessary to promote a compelling governmental interest.' " Dunn v. Blumstein, 405 U.S. 330, 342, 92 S.Ct. 995, 1003, 31 L.Ed.2d 274, 284 (1972), quoting (in part) Shapiro v. Thompson, 394 U.S. 618, 634, 89 S.Ct. 1322, 1331, 22 L.Ed.2d 600, 615 (1969) (emphasis in original).
. A durational residency requirement, which draws a distinction between new and old residents based on the length of their residency, must be distinguished from a residency requirement, which draws a distinction between residents and nonresidents. Generally, a state has much more authority to draw distinctions between residents and nonresidents than between long- and short-term residents. See Vlandis v. Kline, 412 U.S. 441, 452-53, 93 S.Ct. 2230, 2236-2237, 37 L.Ed.2d 63, 72 (1973); Fisher v. Reiser, 610 F.2d 629, 635 (9th Cir. 1979). Distinctions based on residency requirements are generally analyzed under the privileges and immunities clause of the Federal Constitution, see Hicklin v. Orbeck, 437 U.S. 518, 98 S.Ct. 391, 57 L.Ed.2d 397 (1978), whereas durational residency requirements are traditionally analyzed under the equal protection or due process clauses, although this pattern does not always hold true. See, e. g., Baldwin v. Fish & Game Comm'n of Montana, 436 U.S. 371, 98 S.Ct. 1852, 56 L.Ed.2d 354 (1978).
. We use "strict scrutiny" as a shorthand for the "necessary to promote a compelling state interest" test.
. Although any durational residence requirement impinges to some extent on the right to travel, the Court in Shapiro did not declare such a requirement to be per se unconstitutional. The Court's holding was conditioned by the caveat that some 'waiting period or residence requirements . . . may not be penalties upon the exercise of the constitutional right of interstate travel.' The amount of impact required to give rise to the compelling-state-interest test was not made clear.
Although any durational residence requirement imposes a potential cost on migration, the Court, in Shapiro, cautioned that some 'waiting-period[s] . may not be penalties.' 394 U.S. at 638 n.21, [89 S.Ct. at 1333 n.21] 22 L.Ed.2d 600. [footnotes and citations omitted] [emphasis in original]
Memorial Hosp. v. Maricopa County, 415 U.S. 250, 256-59, 94 S.Ct. 1076, 1081-1082, 39 L.Ed.2d 306, 314-15 (1974).
Additionally, both Maricopa County and the case of Vlandis v. Kline, 412 U.S. 441, 93 S.Ct. 2230, 37 L.Ed.2d 63 (1973), indicated that the Supreme Court continued to approve of its summary affirmance of Starns v. Malkerson, 326 F.Supp. 234 (D.Minn.1970), aff'd without opinion, 401 U.S. 985, 91 S.Ct. 1231, 28 L.Ed.2d 527 (1971), which upheld a one-year durational residency requirement for reduced tuition purposes. Vlandis, 412 U.S. at 452 n.9, 93 S.Ct. at 2236 n.9, 37 L.Ed.2d at 72 n.9; Maricopa County, 415 U.S. at 259 & n.12, 94 S.Ct. at 1082 & n.12, 39 L.Ed.2d at 315 & n.12.
. Also, compare State v. Van Dort, 502 P.2d 453, 455 (Alaska 1972) (interpreting Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972) as setting 30 days as the maximum permissible durational residency period for voter eligibility), with Marston v. Lewis, 410 U.S. 679, 93 S.Ct. 1211, 35 L.Ed.2d 627 (1973) (upholding Arizona's 50-day durational residency requirement for voter eligibility).
. See Hicklin v. Orbeck, 565 P.2d 159, 163 (Alaska 1977), rev'd on other grounds, 437 U.S. 518, 98 S.Ct. 391, 57 L.Ed.2d 397 (1978): "We have never used this 'basic necessities' reasoning." The "basic necessities" rationale is one basis upon which the United States Supreme Court has distinguished strict scrutiny cases from rational basis cases in this area. See note 22 and accompanying text, infra.
. Even after the court decided Isakson v. Rickey, 550 P.2d 359 (Alaska 1976), which replaced the old "rational basis" test with a more intensified means-to-end inquiry — the "fair and substantial relationship" test — the right of interstate migration would have been unduly denigrated by assignment to the lower tier. The test announced in Isakson was not intended to take into account the infringement which a classification might have on constitutionally protected interests.
. To some extent, the Supreme Court's decision in Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975), can be seen as reflecting this same need. The Court, although refusing to apply the strict scrutiny test, also refrained from explicitly assigning the case to the rational basis tier. This was one basis for the dissent's criticism of the holding-that the opinion articulated no standard and instead used an "ad hoc balancing test." Sosna, 419 U.S. at 419, 95 S.Ct. at 567, 42 L.Ed.2d at 552 (Marshall, J., dissenting).
. See Dunn v. Blumstein, 405 U.S. 330, 363-64, 92 S.Ct. 995, 1013, 31 L.Ed.2d 274, 296 (1972) (Burger, C. J., dissenting):
Some lines must be drawn. To challenge such lines by the 'compelling state interest' standard is to condemn them all. So far as I am aware, no state law has ever satisfied this seemingly insurmountable standard, and 1 doubt one ever will, for it demands nothing less than perfection.
Compare Hicklin v. Orbeck, 565 P.2d 159, 163 (Alaska 1977), rev'd on other grounds, 437 U.S. 518, 98 S.Ct. 391, 57 L.Ed.2d 397 (1978): "We have never used the 'basic necessities' reasoning. On the other hand, our use of strict scrutiny has not always resulted in holding challenged laws unconstitutional."
. The new balancing test has advantages over both tiers of the old test. At the lower end, the test replaces "virtual abdication" with "genuine judicial inquiry." Isakson v. Rickey, 550 P.2d 359, 363 (Alaska 1976). Where infringement of various rights is alleged, the test results in a "more flexible, less result-oriented analysis." State v. Erickson, 574 P.2d 1, 12 (Alaska 1978).
. See Williams v. Zobel, 619 P.2d 422, 427 (Alaska 1980) (plurality opinion); Id. at 431 n.1 (Rabinowitz, C. J., concurring); Id. at 439 (Connor, J., dissenting).
. See State v. Erickson, 574 P.2d 1, 12 (Alaska 1978). We do not, by this holding, mean to indicate that we are retreating from the strict scrutiny test, or its equivalent under Erickson, where rights other than the right of interstate migration are involved-e. g., rights to freedom of speech, privacy, etc.
. Under the statute, the amount of each dividend is calculated by dividing the income to be distributed (one-half of the annual interest income of the fund) by the total number of dividends to be distributed that year. AS 43.23.-030. If the income is insufficient to provide at least $50 per dividend, the legislature may appropriate money from the general fund as a loan to the dividend fund. AS 43.23.050.
. We do not disagree with the dissent's characterization of the statute as a "durational residency requirement." To the extent that this term could be interpreted to mean that a period of residency is required for eligibility for participation in the program, as was the case in Shapiro, Dunn, and Maricopa County, the term would be a mischaracterization. However, the dissent makes it clear that this is not the case; rather, the statute gears the amount of benefits to length of residency. We think the term "durational residency link" more accurately characterizes this'relationship, but as there is no dispute over the statute's operation, the matter is only one of semantics, the resolution of which would not further analysis.
The relevant United States Supreme Court case law relied upon by the dissent on this point has dealt entirely with two-stage dura-tional residency provisions-i. e., those creating two classes, one eligible, one ineligible. We agree with the dissent that such periods cannot be unreasonably long. We deal here with a multi-stage durational residency provision. The dissent, drawing from the rulings that two-stage durational residency provisions must be reasonable, concludes that any multi-stage du-rational residency provision is impermissible. We think the more likely conclusion is that multi-stage durational residency provisions are to be assessed by the same principles and criteria as two-stage durational residency provisions, and as such they are not automatically impermissible.
.See section I supra.
. What those cases [Shapiro, Dunn, and Maricopa County ] had in common was that the durational residency requirements they struck down were justified on the basis of budgetary or recordkeeping considerations which were held insufficient to outweigh the constitutional claims of the individuals.
Iowa's residency requirement may reasonably be justified on grounds other than purely budgetary considerations or administrative convenience.
Sosna v. Iowa, 419 U.S. at 406, 95 S.Ct. at 560, 42 L.Ed.2d at 544-45.
. Although any durational residence requirement imposed a potential cost on migration, the Court, in Shapiro, cautioned that some 'waiting-period[s] . . . may not be penalties.' . In Shapiro, the Court found denial of the basic 'necessities of life' to be a penalty.
Whatever the ultimate parameters of the Shapiro penalty analysis, it is at least clear that medical care is as much 'a basic necessity of life' to an indigent as welfare assistance.
Memorial Hosp. v. Maricopa County, 415 U.S. at 258-59, 94 S.Ct. at 1082, 39 L.Ed.2d at 315 (citations and footnotes omitted).
. Sosna distinguished Shapiro, Dunn, and Maricopa County partially on the ground that:
Iowa's divorce residency requirement is of a different stripe. Appellant was not irretrievably foreclosed from obtaining some part of what she sought, as was the case with the welfare recipients in Shapiro, the voters in Dunn, or the indigent patient in Maricopa Countv. She would eventually qualify for the same sort of adjudication which she demanded virtually upon her arrival in the State. Iowa's requirement delayed her access to the courts but, by fulfilling it, a petitioner could ultimately obtain the same opportunity for adjudication which she asserts ought to be hers at an earlier point in time.
419 U.S. at 406, 95 S.Ct. at 560, 42 L.Ed.2d at 544. Similarly, the Court distinguished another due process case:
In Boddie v. Connecticut, [401 U.S. 371, [91 S.Ct. 780] 28 L.Ed.2d 113 (1971)] this Court held that Connecticut might not deny access to divorce courts to those persons who could not afford to pay the required fee. Because of the exclusive role played by the State in the termination of marriages, it was held that indigents could not be denied an opportunity to be heard 'absent a countervailing, state interest of overriding significance.' 401 U.S. at 377, [91 S.Ct. at 785] 28 L.Ed.2d at 113. But the gravamen of appellant Sosna's claim is not total deprivation, as in Boddie, but only delay. The operation of the filing fee in Bod-die served to exclude forever a certain segment of the population from obtaining a divorce in the courts of Connecticut. No similar total deprivation is present in appellant's case, and the delay which attends the enforcement of the one-year durational residency requirement is, for the reasons previously stated, consistent with the provisions of the United States Constitution.
419 U.S. at 410, 95 S.Ct. at 562, 42 L.Ed.2d at 547.
. Sosna, 419 U.S. at 421, 95 S.Ct. at 568, 42 L.Ed.2d at 554 (Marshall, J., dissenting): "[The majority's] analysis, however, ignores the severity of the deprivation suffered by the divorce petitioner who is forced to wait a year for relief."
. As a matter of construction of Alaska's equal protection clause, the distinction between delay and denial has no application.
. We think it inappropriate to base resolution of this appeal on predictions of the state's oil and gas reserves. The statute by its terms is of indefinite duration. Our ability to assess the extent of the state's oil and gas reserves, and its other mineral reserves, is too limited, compared to that of the legislature which examined this situation in enacting the statute, to justify any other approach. The relationship between this mineral reserve factor and the longevity of the earnings distribution program is further attenuated by two factors: first, the cessation of mineral income flowing into the fund will affect only its growth, not its income-generating capacity; and second, any cessation of the distribution program itself would be a difficult political decision-i. e., the trade-off between the program and other governmental services will have to be assessed, which is the primary reason for the earnings distribution system's original enactment.
. "In Dunn v. Blumstein, the Court found that the denial of the franchise, 'a fundamental political right,' was a penalty requiring application of the compelling-state-interest test." Maricopa County, 415 U.S. at 259, 94 S.Ct. at 1082, 39 L.Ed.2d at 315 (citations omitted).
. Dunn itself ruled that strict scrutiny was triggered by either the benefit withheld by the classification (the opportunity to vote) or the basis for the classification (recent interstate travel). 405 U.S. at 335, 92 S.Ct. at 999, 31 L.Ed.2d at 280. See also Note, A Strict Scrutiny of the Right to Travel, 22 U.C.L.A.L.Rev. 1129, 1153 (1975), which stated:
In examining 'fundamental right' penalty analysis, one is struck by its redundancy. If only the denial of a separate, fundamental right constitutes a penalty on the right to travel, one wonders why denial of that separate right is not in itself enough to trigger strict scrutiny.
. There is a possibility that Sosna may have established an intermediate third tier involving some sort of balancing test. See Sosna, 419 U.S. at 419, 95 S.Ct. at 567, 42 L.Ed.2d at 552 (Marshall, J., dissenting). If this is the case, this third tier is substantially undefined at this point. We believe we are justified in treating this possibility as the equivalent of our own Erickson test, and thus there is no need to assess the "third tier" independently.
. The Erickson approach is essentially one of balancing. On the one hand, the court must assess (1) the legitimacy of the state purpose purportedly furthered by the provision, and (2) the extent to which the relationship between the end (the asserted purpose) and the means (the classification chosen) is fair and substantial. On the other hand, the court is to determine the nature and the extent of the infringement of individual rights allegedly caused by the classification. Then the balance is struck.
. See Williams v. Zobel, 619 P.2d 422, at 431-32 (Alaska 1980) (Rabinowitz, C. J., concurring).
. L. Tribe, American Constitutional Law § 16-8 at 1004 (1978), states:
Yet although the Court [in Memorial Hospital v. Maricopa County, 415 U.S. 250, [94 S.Ct. 1076], 39 L.Ed.2d 306 (1974)] acknowledged that a showing of deterrence from travelling by the challenged restriction was not only lacking but also unnecessary, the Court relied heavily on its conclusion that the penalty inflicted was very severe . [footnotes omitted] [emphasis in original]
. D. Kresge, T. Morehouse and G. Rogers, Issues In Alaska Development 32-33 (1977) (footnotes omitted), state:
The nonresident nature of Alaska's economic activities was not limited to ownership and control of the means of production, but also included the labor force. Alaska's extreme seasonality (due to northern location, climatic conditions, fisheries, etc.), remoteness, lack of urban amenities, and high cost of living all favored the use of seasonally imported labor for much of the basic economic activities. Monthly data on employment covered by the Alaska unemployment compensation program for the period 1940-42 (the earliest of such data available) indicates that for all covered industries the low month of January was 59 percent of the annual average monthly employment and the high month of July, 148 percent (salmon canning ranged from a low of 16 percent of the annual monthly average to a high of 279 percent). Studies of labor in the Alaska canned salmon industry in 1939 and 1940 indicated that of all persons engaged in fishing, transporting, and processing within Alaska, 46 percent were resident Alaskans, 48 percent nonresidents and 6 percent were unallocated. Of the fish caught for the canneries, 43.6 percent were caught by residents and 56.4 percent by nonresidents (for 'the Western region-Alaska Peninsula and Bristol Bay-the fish catch was 34.6 percent by residents and 65.4 percent by nonresidents).
Because of this nonresident seasonal workforce, the balance of trade statistics for 1931— 40 give only a partial view of the extent to which value of products from colonial Alaska escaped the local economies. The first attempts to calculate personal income received by residents of Alaska was made in the mid-1950's when much of the pre-World War II economy had disappeared, but the investigations of income generated by fishing and fish processing in 1954 give an indication. Of the total $78 million wholesale value of fisheries products, only $15 million or 19.2 percent represented earnings by residents.
Economics and labor requirements in turn determined colonial Alaska's social conditions. A 1937 look at Alaska generalized that 'the labor situation in the Territory is influenced by the fact that the population consists almost entirely of adult males, engaged for the most part in occupations requiring considerable physical activity and mobility, and living, to a very considerable extent, in rather scattered and often more or less temporary communities. This type of employment tends to discourage the building of normal family and communal life.' Census data document the male dominance (nine males to one female in 1900, five to one in 1909, three to one in 1920, and two to one in 1929 and 1939), that non-Natives overwhelmingly left Alaska before sixty-five years of age, and that the proportion of minors was abnormally low. To again quote the 1937 report, 'These circumstances again militate against the establishment of permanent communities with well-developed social activities.'
The problems noted in the 1937 report did not diminish with time:
Actually, throughout the years of the Second World War, the "cold war," and the Korean conflict, Alaska had received people from all parts of the United States and elsewhere. Many of these new Alaskans were-intent upon getting what they could from federal defense spending, saving as much as they were able with the hope of leaving the Territory and investing or spending their hard-earned Alaskan savings in some part of the continental United States where one could obtain much more for the dollar than in the Northland.
C. Hully, Alaska Past and Present 372 (3d ed. 1970). These problems have continued to plague Alaska:
Responses from the 1970 census question, 'Where was this person five years ago?' reveal the significance of migration in Alaska. Net migration (persons entering minus persons leaving) comprised nearly one half of the population growth occurring between 1965 and 1970. However, that is only the tip of the iceberg. Approximately 120,000 individuals moved to Alaska between the years 1965 and 1970; yet, almost 100,000 Alaskans left the state over that same period. Thus for every six individuals who moved to Alaska, five individuals left the state.
Alaska population growth throughout the 1960's was moderate when compared to the oil spurred growth of the 1970's. It is likely that in-, out-, and net-migration rates from the 1970 census will pale by comparison with the results of the upcoming 1980 census.
Alaska Dept, of Labor, Alaska Population Overview 30-31 (1979) (footnotes omitted).
. In making this analysis, we do not mean to indicate that Alaska is to be allowed greater leeway in this area than other states. We think any state could validly pursue similar techniques to reward long-term residents. The point is that most other states have much less need to do so than Alaska, since the problem is much less acute.
. This does not necessarily mean that all classifications based on this purpose will be upheld; a classification may very well be inappropriate if it results in a penalty being placed on the exercise of the right of interstate migration.
. It could be argued that the financial incentive to remain is an attempt to discourage long-term residents from exercising their right of interstate migration, and that, if all the states were to enact such a program, this effect would be significant. We do not regard this argument as relevant here, for several reasons. First, the Zobels do not argue that this factor is pertinent to their own decision as to whether or not to exercise their right of interstate migration. Second, even if they did so, there would be a serious standing problem, as they are not in the position of a long-term Alaska resident facing a loss of permanent fund benefits by leaving the state. Third, the loss in such a situation would stem from the statute's simple residency requirement, AS 43.23.010(b)(2), not its durational residency link, and thus would be subject to a different mode of analysis.
Even assuming that we ignored all previous objections, there is authority to reject the argument on its merits. In Fisher v. Reiser, 610 F.2d 629 (9th Cir. 1979), the court upheld a Nevada law which, although paying workers' compensation benefits to eligible beneficiaries whether they lived inside or outside the state, included a cost-of-living increase limited to those recipients living in the state. The Ninth Circuit held that the decrease in benefits visited upon a recipient migrating out of the state did not burden the right to travel in a manner requiring strict scrutiny:
For some kinds of monetary benefit programs for which a residency requirement would be constitutional, a state is not required to, and may not in fact, provide any program at all. Losing such benefits upon migration from a state which does provide them does not thereby mean the right to travel has been infringed.
id. at 635. See also Califano v. Torres, 435 U.S. 1, 98 S.Ct. 906, 55 L.Ed.2d 65 (1978).
. We note that the relationship between the classification and purposes (2) and (3)-to encourage long-term residency and increased awareness of the management of the fund-is somewhat diluted by the fact that the term of residency is counted, not from 1980, but from 1959. However, we do not find that this changes the outcome of the balance, for several reasons.
First, the selection of the year from which residency will be counted is not a significant aspect of the statute. The state points out that, were residency counted from 1980, a new resident migrating to the state in 2001 would be in the same situation as appellees are now; if the statute would be constitutional with residency counted from 1980 as to residents migrating into Alaska in 2001, it is constitutional as to the Zobels here with residency counted form 1959.
Second, we think that purpose (^-expressing the state's appreciation for the tangible and intangible contributions of its long-term residents-does justify the selection of the 1959 date. Statehood was the point at which this state first became entitled to the resources which have yielded the income currently being distributed. Also, the state's low population and sudden assumption of statehood responsibilities in 1959 made the next few years difficult for the state and its residents:
A government such as the one embodied in the Alaska constitution, however, with its complete range of governmental services, was expensive for a State with limited sources of taxation. Alaska could only boast of a couple of pulp mills. There were a few producing oil and gas wells, possibilities of hydroelectric power development, the likelihood of diversification in the fishing industry, some mining, and prospects for a vastly increased tourist trade. The State's business enterprises were small and catered mostly to local needs. In addition, Alaska's population was modest and hardly amounted to more than that of a medium-sized city in the continental United States.
Accordingly, revenues were small. Yet, the demands were great. The State government had to provide all the governmental services and social overhead required by modem American society. For instance, it would have been relatively simple to build a few roads, furnish normal police protection, and establish the customary school facilities. But nothing was normal in Alaska; it was and remains a land of superlatives. Subarctic engineering is relatively new, but the State would have to face the problem of permafrost conditions that frequently cause the roadtop to buckle and heave. Police protection would have to be provided for an area one-fifth the size of the forty-eight United States but with very few roads available. Flying would become a way of life for law enforcement officials as well as other Alaskans-an expensive way of life. 'Bush schools' scattered along the Aleutian chain, through the Yukon Valley, and on the Seward Peninsula and the islands of southeastern Alaska were expensive to maintain. It was not until the discovery of oil on a large scale that the picture changed.
C.-M. Naske, An Interpretative History of Alaskan Statehood 169-70 (1973).
Given that the state's first years were its leanest, during which its few residents tolerated the heavy burdens of implementing the new state government, we believe that selection of the 1959 date is justifiable.
.The superior court said, "This argument, however, is insufficient under any standard of review to sustain a distinction based on length of residency. What is there to prevent those who would receive maximum benefits under this statute from making similar demands on the legislature?"
. See Williams v. Zobel, 619 P.2d 422, 435-37 (Alaska 1980) (Rabinowitz, C. J., concurring).
. Were the permanent fund earnings distribution payments tied to "basic necessities," the rule of Shapiro v. Thompson would apply; but such is not the case.
. Were we continuing to adhere to the boarder language in the pre-Erickson opinions dealing with the right of interstate migration, they might well be dispositive; but we have elected not to apply the strict scrutiny analysis.
. The dissent points out possible infirmities of the statute as applied to minors. We think it unnecessary to address those issues at this point. The Zobels have not complained concerning that aspect of the statute, and would have no standing to do so. The parties have not briefed the issue. The mode of analysis would be substantially different than that applied to right-to-migrate cases. Therefore, we think it best to defer comment on this aspect of the statute until the question is presented in an adversarial context.