This year’s Alaska Permanent Fund Dividend will be $1,174, Gov. Sean Parnell announced Tuesday.
That’s down a bit from last year’s $1,281, as some stock market losses began to be averaged into the five-year dividend calculation formula.
Parnell called the annual announcement of the dividend amount “truly one of the great duties” of the office of governor.
“It’s a unique duty that 49 other governors likely wish they shared,” he said.
It’s a chore Parnell first undertook in 2008, when then-Gov. Sarah Palin was out of the state running for vice-president, and then again after she resigned and he became governor.
Tuesday, he also used the announcement to advance his legislative agenda, saying, “I do want to raise a couple of concerns about the future.”
Parnell has urged the state Legislature to cut oil production taxes, saying that will spur oil companies to find and produce new oil, but has been unable to persuade the Alaska Senate to go along.
Tuesday, he suggested that Alaskans would see their dividends decline if they don’t take the action he’s advocating.
“Alaskans can face diminishing dividends based upon the current dividend calculation because, in part, poor performance of the stock market, and then additionally over time because of declining oil production there will be fewer and less royalties going into the Permanent Fund unless we turn that around,” Parnell said.
State Sen. Bill Wielechowski, D-Anchorage, who opposes Parnell’s tax cuts, said the threat to dividends actually comes from the tax cuts Parnell is proposing.
“The greatest threat to the Permanent Fund is the governor’s bill that would roll back oil taxes,” he said.
He said the Parnell administration’s own projections show the tax cuts costing $2 billion a year and creating deficits that would use up the state’s savings.
“If you pass the governor’s oil tax bill, there will be attempts to raid the Permanent Fund in the next decade,” he said.
Parnell spokeswoman Sharon Leighow didn’t return calls Tuesday asking how dividends based on earnings would be diminished, as Parnell stated.
Sen. Hollis French, D-Anchorage, he was disappointed Parnell would use the dividends to push for tax cuts.
“I think it’s unfortunate with all the good news the governor has turned to fear mongering in an attempt to get his bill passed,” French said.
In 2008, stock market declines threatened to severely impact future year’s dividends. Since then, the Alaska Permanent Fund Corp., which managed the fund, has regained most of those losses.
“We’ve bounced back quite nicely,” said Bryan Butcher, commissioner of the Department of Revenue.
The department includes the Permanent Fund Dividend Division, which reviews applications and sends out checks .The fund itself is managed by the Alaska Permanent Fund Corporation, with a separate board of trustees.
Butcher noted that fund ended the fiscal year that closed the end of June with more than $40 billion for the first time ever. It is now less than $38 billion, however.
Since inception, he said, the fund has distributed $19 billion to Alaskans.
The dividend checks this year will pump about $760 million into the state’s economy, Butcher said.
While advertisements for big TVs are ubiquitous during dividend season, many recipients use their checks for necessities, for travel or they save them for the future.
At the Anchorage press conference, Parnell said his family would spend theirs on college.
“With one daughter in college and one on the way to college, we’re going to be investing in education with ours,” Parnell said.
Any Alaskan who received every dividend since the program was first established would have collected $33,365.41 through this year, Butcher said.
Most Alaskans these days receive their dividends by direct deposit, he said. Still, about 93,000 still get mailed paper checks.
This year’s direct deposit dividend payments will happen on Oct. 6, while the checks will be mailed from Juneau on the same day.
• Contact reporter Pat Forgey at 523-2250 or at firstname.lastname@example.org.