Monday, September 28, 2009
The Permanent Fund Dividend
Since 1982, every Alaskan resident has received an annual payment if they have lived in the state for the previous calendar year. With the construction of the trans-Alaska pipeline in the mid-1970s, Alaska voters approved a new Permanent Fund, into which the state's dedicated oil revenues were deposited. In the early '80s, the state legislature created the Alaska Permanent Fund Corporation, which ensured that the investment income from this fund of dedicated oil revenues would be distributed to state residents through the Permanent Fund Dividend program. This annually distributed payment is called the Permanent Fund Dividend (or PFD).
Every year, the arrival of the PFD has become a much anticipated event. Since 1988, these annual payments have topped $800 per person, with amounts of more than $1000 for many of these years. This year's dividend check, to be issued to direct deposit recipients on October 8th, will be $1305 per person. As long as you have lived in Alaska for this previous calendar year, no matter how rich, poor, young, or old you may be, you will receive a check. Even babies get them! This year, for example, a family of five will be receiving $6525 into their coffers overnight.
Every year, the PFD presents a tricky ethical, moral, and financial dilemma for Alaskan parents - what do you do with your children's dividend checks? Because the checks are issued to the parents, some decide to simply put the money into the family budget and use it for rent, utility bills, and basic groceries. Others pool the checks to buy a luxury item for the family, like a new ATV (an all terrain vehicle or four wheeler). To my daughter's dismay, we put the money immediately into a college savings account before we are tempted by the brilliant lure of Blue Ray and high definition. We are immediately met with a never-ending barrage of tales, however, about more fortunate schoolmates who are given their entire $1000+ dollars to spend freely as they wish. (I have yet to hear any such accounts firsthand from parents, however.)
While receiving $1305 for doing absolutely nothing sounds like a pretty good deal, many of us in the 49th state were disappointed with the news of this year's payment amount. Last year, the dividend payed to Alaskans reached a colossal $2069. To add even more sugar to an already lusciously sweet dessert, Governor Sarah Palin added an extra state-funded $1200 per person to defray rising energy costs, leaving each Alaskan with a colossal $3296.
After ten years of feeling like an outsider, this year I finally feel like a true Alaskan because I find myself complaining about the "low" payment of $1305 for living in the most beautiful state in the union.