Mackie plan triggers conversation, crank calls

Alaskans adore, attack proposal to hand out $25,000 dividends

Posted: Tuesday, January 25, 2000

The notion that $25,000 could drop into every Alaskan's pocket is the talk of the state.

Ever since he announced his budget plan last week, Sen. Jerry Mackie has been getting crank phone calls at home and even has had a request that he officiate at a wedding. The Craig Republican has also been in high demand for radio shows catering to Anchorage commuters.

``The plan has received ... a lot of attention,'' Mackie said. ``The level of interest in the issue has definitely exceeded my expectations. My phone has been ringing off the hook.''

The level of interest remains high, but an initial surge of support some legislators saw from their constituents may have overstated Alaska's willingness to see half of the Alaska Permanent Fund liquidated, despite the promised boon of $25,000 per Alaskan.

Dittman Research Corp., an Anchorage polling company, said the immediate reaction of the 519 Alaskans polled this week showed that 60 percent of the people oppose the plan and 33 percent support it. The margin of error is near 4.5 percent according to Dave Dittman. The company covered the expense of the poll itself.

``It's the initial reaction,'' Dittman said of the survey. ``It'll go in one direction or the other as questions are answered and concerns addressed.''

He noted that results were pretty much the same across political line, and gender and age differences. One variable that stuck out, he said, was how long folks were intending to stay in Alaska.

``Those planning on leaving soon are more likely to support it (Mackie's plan) and more likely to leave sooner,'' Dittman said.

Mackie said the poll is just a poll. If the people get to vote on it, he said, his idea will pass, and he has no doubts about it.

``It all depends on what you thing about polls,'' he said. ``I still think it's a good proposal and I think we need to fight for it.''

Mackie said his e-mail and phone calls run overwhelmingly in support of his idea to, basically, cut the $27.5 billion Alaska Permanent Fund nearly in half, and pay $14 billion of it, $25,000 each, to Alaskans who are current residents. The remainder would continue to be invested, with earnings going to help pay for government.

A lot of people have questions about the side-effects of the plan - such as taxes, eligibility for income-based programs, the reaction of the state's economy to $14 billion being dumped on it and the potential for a mass exodus of Alaskans after they get their money.

Scott Goldsmith, with the Institute of Social and Economic Research at the University of Alaska Anchorage, has been telling reporters that the big dividend would spur euphoria then despair.

``Practically, I think it's far too radical an idea,'' he said. ``It would be the biggest party the state has ever seen followed by the biggest hangover.'' Although it's difficult to predict what exactly would happen to the varied urban and rural economies in the state, he said, the potential for long-term pain is high. Pay back may not come immediately, but the state would have to pay for spending down its biggest pot of public money.

``It sounds great, but nobody knows what it would do to the economy,'' Goldsmith said. ``(But) future generations will have to pay the tab for the party.''

Mackie said he expected criticism of the plan. But the personal attacks he's received lately - such as accusations that he's trying to bribe Alaskans or trying to set the stage for a possible run for the governor's office - have bothered him. Such claims are false, Mackie said. He knew presenting the plan came with some risks, and he's gotten part of what he wanted already - people are talking about a long-term solution to Alaska's fiscal situation again.

``I'm very much aware that this could blow up in my face,'' he said.

Some officials at the Internal Revenue Service would be happy come tax day 2002. Depending on a person's current income level, anywhere from 15 percent to 40 percent of the big dividend would go to the federal government.

George Elgee, a Juneau accountant, ran some numbers last week. He found that those in the lowest tax bracket would pay $3,750 of the $25,000 in federal taxes. Those in the highest bracket, would give up $9,900 of the dividend. Those in the middle tax bracket, 31 percent, would pay $7,750 to the U.S., netting $17,250 from the one-time boon.

Karen Perdue, commissioner of the Department of Health and Social Services, said the implications of a one-time $25,000 check are complex, but the idea looks like a ``real good welfare reform plan.''

``If you're poor, money sure helps,'' she said. Some Alaskans would be able to use the money to set themselves up for success. Others would probably blow the loot, she said.

She's not sure what the money would do for those who qualify for public housing subsidies today. They might lose their eligibility. Also at risk would be the disabled and the low-income elderly residents. Those facing high medical costs could use up $25,000 quickly, Perdue said.

Mackie's plan would likely make a big dent in recovering some of the close to $570 million that is owed in child support in Alaska, she said. That would help a lot of women in the state get out of poverty. Not all of that money would be recovered with the big dividend, but quite a bit of it would be, she said.

There are a lot of questions that need answers, Mackie said. Given that the plan is only a week old, there's time to answer those questions and time to improve the plan.

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