State surplus could earn dividends

To tell you the truth, I would love to have that $203 minimum rebate from 1998 that would result from Gov. Jesse Ventura’s Democrat-supported plan for the budget surplus. I’d love to get a printer for my computer, or maybe a TV. You know, my stereo is pretty old too. I’m one of the lucky college students who would get a rebate too, since I have independent student status this year. Why would that matter, you ask? Well, the rebate would only go to homeowners and renters who pay property tax, as opposed to income tax, which means that dependents — people who don’t pay property tax — are out of luck.
Yeah, I’d love to have some extra cash, but as with all instant gratifications, that money would soon be gone. The petty dollar signs in our eyes are blinding us from the best way to deal with this extra money.
Invest it.
Put the money into bonds or mutual funds. Give out an annual dividend.
It’s more lucrative, better for the future of the state, and better than simply shoveling it back out. That way, instead of a one-time $200 fix, Minnesotans can rely on an annual bonus for their residency. I’m not coming from left field on this one either. At least one state, Alaska, has already set a precedent by putting the investment idea to use. Alaska has a very successful permanent fund dividend that Minnesota would be wise to emulate.
In 1969, the state of Alaska auctioned off drilling rights on 164 tracts of state-owned land. The windfall from that was $900 million. America’s newest state used that initial money to provide the basics for its citizens, but oil is a lucrative business and the gains didn’t stop there.
Eventually, Alaskans realized that oil would run out someday, and they wanted to be prepared for the future. In 1976, the Alaska Permanent Fund savings account was created by a voter-approved amendment to the Alaska Constitution. It took several years to figure out what exactly to do with this interest-earning money, but the final decision was reached in 1982. Alaskan residents are eligible for a yearly dividend that comes from the Permanent Fund Dividend program. It’s basically a kickback for residency.
Last year, every resident who applied and was eligible for this yearly payback received $1,540.88 from the state. Those residents who have lived in Alaska for the entire time the program has been in effect — 15 years — have received a cumulative amount of $14,777.55.
So, instead of that stereo I was thinking about, I could buy a car … a new one.
Let’s relate this to Minnesota’s situation. Instead of getting $203 this year, if our officials would exercise judgement based on something other than immediate gratification, the constituents of this state could reap significant benefits.
This takes foresight. Deciding what is best for the state’s future isn’t about ‘gimme-gimme’ or instant fixes. Yes, we do pay high taxes and maybe it would be nice to have some of that money back, but time must be taken to hash out the options so we can do it right.
Minnesotans have created a state with many wonderful perks like great parks and some of the cleanest streets in the nation. Many of these perks came directly from taxes. This is why the anti-tax wave that has grown from the surplus debate is a threat to our quality of life.
Minneapolis’ lakes are surrounded by bike trails and walkways, not high-priced property. The city had to buy that land and maintaining takes money. Our beautiful parks, such as Loring or Minnehaha Falls, don’t get their grass cut by charitable passersby, but by our taxes. And all that snow that dumped on us in the last couple weeks — did Ventura hop in a truck and plow snow with his “do-it-your-damn-self” attitude? No! We paid for that service with our tax dollars.
The state of Minnesota is beautiful and well-maintained directly because of our tax dollars and people are forgetting that. Wanting the surplus back is shortsighted, and the investment option is simply a better plan for the future. It could be said that if Minnesotans took their little rebate, they could invest it if they want themselves, like into a Sony Playstation or a trip to the casino. However, it seems to make more sense to invest the money collectively and get more in return.
Capitol Hill is also lending credence to the idea of investing public funds with Clinton’s recent suggestion that the government should invest Social Security funds into Wall Street to keep Social Security from dwindling with the growing elderly population. There will be considerations, of course. One thing that makes me somewhat nervous is the idea that the government could invest in things that I personally disagree with like tobacco, big oil, etc.
As with everything, this idea isn’t perfect, but it seems that the positive economic benefits outweigh the potential problems. This isn’t to say we should halt discussion about what to do with the surplus. The discussion just needs to be taken in another direction.
Forming a permanent fund would be an intelligent solution to how to spend the budget surplus. It offers savings for the future and it gives money back to us now.
Before all our legislators start donning feather boas and shooting from the hip, I need to say that I don’t think I’m alone in preferring a well-thought-out decision to a knee-jerk one.
As for college students, most of us are the sacrificed group in Ventura’s plan. We paid the sales tax that created the surplus, yet many of us will get nothing back. It’s not like students need that kind of money. I mean, we’re smart enough to go to college.

Sara Hurley’s column appears every Monday.