ANCHORAGE, Alaska — It’s a highly anticipated day of the year in Alaska, when residents learn how much money they’ll receive from the state’s oil wealth savings account — a payout people receive just for living in The Last Frontier.
This year’s share of nearly $1,900 is the sweetest since the Great Recession and the third-richest ever.
Gov. Sean Parnell announced the amount of the Alaska Permanent Fund Dividend with great fanfare Wednesday. “This is all good news for Alaskans,” he said at an Anchorage press conference.
The payout to be distributed Oct. 2 is more than double the amount of last year’s $900 checks but short of the record payout of $2,069 in 2008.
Who qualifies?
The dividends are distributed annually to men, women and children who sign up for it after living in the state for at least one calendar year, or were born in Alaska by the Dec. 31 deadline of the previous year. This year, nearly 599,000 Alaskans will receive checks, either through direct deposit or in the mail. Of those, the oldest recipient is 109 years old and the youngest includes 26 children who were born Dec. 31. Altogether, the checks total $1.1 billion.
The payout formula
The amount of each person’s check is based on a five-year average of the fund’s investment earnings, which have included the recession years. Alaska wasn’t hit as hard by the recession as the Lower 48, but the Permanent Fund Corp. has a diversified portfolio that was clobbered when markets plunged worldwide. The fund has since recovered, according to officials. The fund had a balance of $29.9 billion in 2009, compared to $51.2 billion five years later.
How to folks spend it?
Some dividend payouts go toward fun stuff like vacations and big-screen TVs. But in the remote village of Deering, city administrator Mike Jones says his family’s share, $5,652 for the family of three, will go toward bills and heating fuel, which is $6.50 a gallon and rising. “There was a time when I was younger I would go for snow machines and fun stuff,” Jones said. These days, necessities take precedence for the family in the Inupiat Eskimo community 520 miles northwest of Anchorage.
Retail sales
Businesses often rush to take advantage of the cash infusion, offering Private Fund Dividend deals. For example, the Girl Scouts of Alaska announced a 10 percent discount on all non-uniform apparel in a “PFD Super-Saver” sale being held through Friday at an Anchorage Girl Scouts store. Alaska Airlines announced more than 90 destinations available through a PFD sale running between Sept. 24 and Oct. 29. “How does travel to faraway warm sapphire seas sound? How about exciting cities you’ve always wanted to see?” the airline says on its website. “This is the flight sale that’s made just for Alaskans.”
Giving it to charity
Some Alaskans choose to give part of their dividend to charitable causes through the “Pick. Click. Give.” program. This year, 26,850 recipients pledged $2.8 million to 511 nonprofit organizations.
How did it all begin?
The Permanent Fund was established in 1976 after the discovery of oil on Alaska’s North Slope. The state began distributing fund money to residents in 1982. If an Alaskan has qualified for all of the checks distributed since the beginning, they would have collected $37,027.41. With the upcoming distribution, the state will have distributed more than $21.9 billion over the years.
Don’t forget the IRS
Alas, it’s not all free money. Alaska has no state income tax, but residents must pay federal taxes on the bounty.
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