Alaska's Permanent Fund Dividend was the brainchild of Alaska's fourth governor, Jay Hammond, who served from 1974 until 1982.
Fifty years ago this month, Alaskans voted to establish the Alaska Permanent Fund, supporting annual dividend payments from oil revenues to residents of the state. It was the culmination of one visionary governor with a bush pilot's boldness and a homesteader's practicality who tried to ensure Alaska's black gold would benefit Alaskans for generations.
The seeds for Gov. Jay Hammond's efforts were sown in 1969, when Alaska received a $900 million windfall from the Prudhoe Bay oil lease sale. Astronomic in its day, this sudden flood of money was largely spent in a government spending spree-a bonanza that, by the mid-1970s, had mostly disappeared.
Hammond, a Marine fighter pilot in World War II who moved to Alaska in 1946, had watched it all with growing concern. He knew, as many did, that once oil started flowing through the Trans-Alaska Pipeline, even greater revenues would come. But would these riches help children not yet born, or evaporate in political squabbles and annual budgets?
The governor wanted a different kind of legacy, one where pipeline cash could be stashed in a savings plan safe from legislative tinkering and no expedient withdrawals. On Nov 2, 1976, after months of spirited debate, Alaskans approved the necessary constitutional amendment, and the Alaska Permanent Fund was established, tucked safely away in Article IX, Section 15 of our state's constitution.
But Hammond's ambition didn't stop there. He envisioned every single Alaskan, newcomers and old-timers alike, sharing directly in the state's oil bounty. His early proposal was simple, if radical: "Let's send people annual dividend checks from the earnings. If oil is the people's resource, its benefits should go straight to the people." Skeptics called this Piper Cub economics and pie-in-the-sky thinking. But Alaska, after all, is a place where the sky's the limit.
Turning a savings account into dividend income for the people, however, took years of work, political gamesmanship, and not a little controversy. The first law, passed in 1980, attempted to reward Alaskans according to how long they'd lived in the state: $50 for each year of residency since statehood.
Payment to residents was put on hold, however, after Anchorage attorneys Ron and Patricia Zobel challenged the constitutionality of the program. The couple filed a lawsuit against the State of Alaska.
The Zobels were widely vilified in public and even received death threats during the next several years. Their case, which they won after the Supreme Court sided with the newcomers in 1982, provided the first live coverage of a court proceeding in Alaska's history.
Unfazed by defeat, Hammond and his legislative allies rewrote the law to give every Alaskan- sourdough and cheechako alike-a flat payment, so long as they'd lived here at least six months. In June 1982, smiling families across Alaska received their first dividend check: $1,000, a tangible share of Prudhoe's bounty.
The Permanent Fund Dividend check now is a living reminder of Jay Hammond's conviction that Alaska's wealth should serve not only the people of his era, but the countless generations yet to step off bush planes or off the ferry and call this place home.
In Hammond's book, "Tales of Alaska's Bush Rat Governor" published in 1996, the reluctant politician shares the trials and tribulations surrounding the battle to get the Permanent Fund set up and the dividends flowing to Alaska's residents. He later wrote two more autobiographical books in which he discusses the fund, as well.
This column features stories researched for Aunt Phil's Trunk, a five-book Alaska history series written by Laurel Downing Bill and her late aunt, Phyllis Downing Carlson. Along with Bill's latest book, Pioneers From Alaska's Past, the books are available at bookstores and gift shops throughout Alaska, as well as online at http://www.auntphilstrunk.com and Amazon.
