What the article “sort of says” but not explicitly is that in general (with a very few exceptions) the natural resources of Alaska are not privately owned; they are literally owned by all the people of the State. That’s most of why the dividend is possible. Oil companies bid for the right to develop a property. Then if they “hit it” one of every eight barrels is royalty oil, i.e., oil that goes back to the state. Then depending on several things, including the field, etc., up to 100% of the money from that royalty oil goes into the Permanent Fund.
Dividends are then paid from the Permanent Fund. It should also be noted that on several occasions the Alaska legislature has made appropriations to the Permanent Fund beyond what was required to go into the Fund.
So we’re pretty lucky, I suppose. My own recollection is that Hammond proposed the Permanent Fund for that “Rainy Day” when the oil money ran out and the Permanent Fund would be needed to run State Government. That scenario is pretty much politically impossible now. Unfortunately, many Alaskans are so tied to the dividend that they believe the dividend should continue no matter what and a highly progressive tax should be put into effect to run a state government, including all the transfer payments.
I think we have some real belt tightening to do as a State. Having the dividend has not been good for our individual character development, in my opinion. It really has led to a sense of entitlement — I want my dividend and I want everything else to continue just the way it is and I want you to be taxed to be sure I get everything the government is currently giving me and if you don’t do that well, clearly, you are “balancing the budget on the backs of the poor and the children.”