ANCHORAGE — Buy an iPhone 5 or replace the leaky rain gutters? Splurge or save? Ah, the tough choices that befall Alaskans every year, when they get their dividend checks from the state’s oil savings account just for living here.
State officials said Tuesday that eligible Alaskans will receive $878 this year. That’s significantly less than last year’s dividend of $1,174, which was the smallest since 2006. The payout will be distributed Oct. 4.
The Alaska Permanent Fund Corp. last month suggested residents could expect a smaller dividend this year.
CEO Michael Burns has said the formula used to calculate the dividend will stay depressed until officials can stop using performance from 2009, when the fund recorded its first net loss in the statutory net income.
Like others surveyed in rural parts of the state, Sina Takafua, from the northernmost town of Barrow, plans to use her first-ever Alaska Permanent Fund dividend to pay bills. That way, she said, she can free up paychecks from her job at the local fur shop and get her Christmas shopping done early.
Some of her customers, on the other hand, are going for some warmth — and style. They’re already pre-ordering parkas made of caribou, wolverine and other furs.
“They’re waiting for their PFD to pay for them,” said Takafua, who moved to Alaska from Maui, Hawaii, with her two sons in 2010. Her husband joined the family later, so he’s not yet eligible for a dividend like they are.
New residents must live in Alaska for one calendar year to benefit from the permanent fund, which was established in 1976 after North Slope oil was discovered.
The state began doling out money from the Alaska Permanent Fund in 1982. Residents who have received every check since then have gotten a total of $34,243. 41, officials said.
This year’s lower check amount was no surprise to fund officials.
The amount of investment earnings allocated to dividends is based on a five-year rolling average of Permanent Fund performance. Dropping from the five-year rolling average this year was 2007, a recent high-water mark in which the fund earned $3.4 billion in statutory net income, the realized gains used in calculating the dividend. Staying in was 2009, during the recession, when the fund recorded its statutory net income loss.
Alaska has no state income tax, but residents must pay federal taxes on the bounty. Still, it’s free money for every eligible man, woman and child. Don’t expect anyone to balk at it.
In the western town of Nome, many residents are using the money to pay for outrageously expensive groceries and gasoline, which sells for almost $6 a gallon. Gone are the days when people spent their dividend checks on snowmobiles from Morgan’s Sales and Service shop, said fourth-generation owner Pat Johanson.
The money that goes to Johanson’s four children will end up in savings. But Johanson’s plan for his own check depends on how winter fares compared with last year, when temperatures were more brutal than usual.
Johanson, his wife and kids could have a vacation in the near future.
“If January gets to 30 and 40 below again,” he said, “I want to go to Hawaii.”
So does Sean Irvin of Anchorage. He went there on last year’s dividend and wants to go to Maui with this year’s money.
Still, there he was at an Anchorage Best Buy, eyeing another PFD treat — no, not the new iPhone coming out Friday, but a humble phone for a landline.
“I want big buttons and caller ID,” Irvin said.
Comments (21)
Add commentAs Dad always says.....
"Better than a poke in the eye with a sharp stick."
A Question?
Not trying to be rude here....
But if our cost of fuel as been going up for quite sometime then how is it PFD's keep going down?
And on a side note... Last year PFD screwed up they paid, took back, garnished and paid again. Somewhere in all of that several people had to report more income because even though they didn't actually get the money in hand it was reported on the 1099. So it was reported income and taxed.
Now this year PFD is taking back all those over payments via garnishments (and I don't care I was one of those people it wasn't my money anyhow) But I am wondering if the 2012 1099 is going to report less income or if I just paid fed taxes for nothing?
So if you are one of those people that got to enjoy that roller coaster last year you better have paid attention and look this year because you
might not be getting anything.
Most AK citizens are completely ignorant to how the PFD works.
This is a problem.
Alaska Constitutional
Alaska Constitutional Amendment:
"At least 25 percent of all mineral lease rentals, royalties, royalty sales proceeds, federal mineral revenue-sharing payments and bonuses received by the state be placed in a permanent fund, the principal of which may only be used for income-producing investments."
Also
Oil and gas revenues continue to dominate the state’s unrestricted revenue stream, accounting for 89 percent, or just over $6 billion in fiscal year (FY) 2010.
I'd take a buy out...
I'd take a buy out...
Hmmm
Smallest since 2006.
I would expect Governor Parnell to take responsibility for that precipitous drop, given that he will publicly announce the dividend, as if his efforts had something to do with it.
In the past, the PFD was not a political prop. Governors didn't try to claim credit for it by being the ones to announce it. They left it to the funds manager.
Or did Parnell quietly scrap his plans to announce it this year for the very reason I cited - 'success has many fathers, but failure is an orphan'.
How does Parnell have
How does Parnell have responsibility for the drop in the PFD? It's run on a multi-year average and is entirely based on investment income. A single governor in office for just a few years hardly has any real impact on the PFD amount. Presidents Bush and Obama have far more impact. One might as well blame Parnell for the Juneau rain this summer.
Jim
You beat me to it. Well said. And Lat, your comment demonstrates that Bartender's post is right on the mark.
Free money, and people will still p*** and moan about it. Incredible.
I don't begin to understand
I don't begin to understand investment strategy, but I wonder why, with prices of oil being so high and gold being through the roof, PFC hasn't invested in oil and gold? Maybe they have. I've heard that PFC is heavily invested in commercial property in the lower 48, which was probably a good revenue stream 10 years ago. Do we know if they have made any significant changes in how they are investing the money?
read closer, jim and mikey
Lat's comments were facetious - Parnell (apparently) took over announcing PFD amounts when they were bigger from the head of PFD (who used to do it?) as if to take credit.
Socialism
Spreading the wealth. Pure Socialism.
@aynrand
Are you implying that the PFD is an example of socialism? Owners of oil and gas lands routinely receive royalty payments from those who purchase/lease the rights to remove resources from the land. Since Alaska itself is the owner of the land overlaying these resources it's only right that Alaska receives payment in the form of royalty. This is certainly not socialism, and really is the epitome of capitalism, the selling for a profit one's own resources. The PFD is the method of distributing these payments to the owners of the resource, the citizens of Alaska.
@akjim: in socialism,
@akjim: in socialism, basically, the public, as a whole, owns some resource and exploits it to benefit everyone. In capitalism, a private entity owns some resource and exploits it for their own benefit.
The very idea that the State of Alaska, as a whole, owns something and uses it to provide a benefit to all is socialism. The government is NOT a private entity.
You're going through a bunch of contortions to make the PFD seem like a capitalist concept, just because you like the PFD and don't like socialism.
@PP
No contortions needed, it's a pretty easy concept, but it's not surprising you are incapable of understanding it. A government can act as a private entity. Public land ownership does not meet the "communal" aspect of a socialist society, it's merely the natural order of governmental society of any type, as not all land is available for private ownership. The citizens of Alaska chose to provide the PFD method of providing money to residents, rather than simply allowing the government keep it all. This is not socialism. Obama's concepts of redistribution of wealth from those that have it to those that do not is socialism. This is a resource that everyone already owns. The PFD is merely the medium of wealth delivery to the owners.
@akjim: the government is a
@akjim: the government is a public entity. It can not act as a private entity, by definition, because government is defined as a public entity. Whether or not the people of Alaska chose the PFD is irrelevant--socialism and democracy are not exclusive. But make no mistake, it is socialism. We are taking money from private organizations and redistributing it to Alaskan residents. This is not the only example of socialism in government, either. Most services provided by the government (at any level) are socialist.
Furthermore, your little red herring about Obama is not only laughably wrong, but also irrelevant to the discussion at hand. Please stay focused.
PFD socialist or capitalist?
The PFD's origination resembles socialist ideals moreso than capitalist. The sustainability of the PFD is more capitalist in that the fund itself is grown through private investment.
Socialism more often is indicated by a public ownership of lands/resources while capitalism is the private ownership.
The PFD wouldn't exist without the assumption that Alaska's resources are publicly owned, however.
Norway, for example, provides much of its social services through oil resources, but that alone doesn't qualify Norway as socialist.
VP candidate Sarah Palin, for instance, sponsored far more socialist legislation than presidential candidate Barrack Obama, prior to calling him a socialist. Barrack Obama has been called a socialist for sponsoring a healthcare reform bill that mandated Americans buy services from private insurers. Nothing socialist about it, but it doesn't matter apparently.
Socialism is bad, capitalism is good. Heckuva marketing campaign you've got there capitalism.
The PFD is not socialism. The
The PFD is not socialism. The state does not control the entire means of production. If the state owned the land and ran the oil companies and then paid the workers of the oil company based on the workers need/situation rather than by the value of the work done then it would be socialism.
so•cial•ism
1. political system of communal ownership: a political theory or system in which the means of production and distribution are controlled by the people and operated according to equity and fairness rather than market principles
2. movement based on socialism: a political movement based on principles of socialism, typically advocating an end to private property and to the exploitation of workers
3. stage between capitalism and communism: in Marxist theory, the stage after the proletarian revolution when a society is changing from capitalism to communism, marked by pay distributed according to work done rather than need
Old Russian (Soviet Era) Saying " We Pretend to Work, They Pretend to Pay Us"
“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” …Winston Churchill
Parnell is a dick. However,
Parnell is a dick. However, even I won't blame this one on him. The drop in the PFD is a factor of forces way beyond the control of the likes of Sean.
Parnell...
...can take the blame for the drop just as much as he can take credit for the dividend in the first place.
Swimmergirl is the only one to understand my point. And of course Jim would rush to Parnell's defense like the bootlicker he is.
It started with Palin. Before her, the dividend was announced by the fund manager. Then she took over announcing it, with a bunch of media hoopla, to score political points. Parnell was happy to jump onboard that train.
Hey, what politician doesn't want to get a boatload of press coverage, delivering good news that they had absolutely nothing to do with? But if you want to gain political benefit for the good news, you should be prepared to take the political hit for the somewhat less good news as well.
@noroadfugitive: I wasn't
@noroadfugitive: I wasn't aware that a dictionary definition made one an expert in a subject. Maybe because it doesn't.
http://en.wikipedia.org/wiki/Socialism
"Social ownership" may refer to cooperative enterprises, common ownership, direct public ownership or autonomous state enterprises.[2] There are many varieties of socialism and there is no single definition encapsulating all of them."
The PFD certainly seems to fit those definitions.
Lat, I defy you to find where
Lat, I defy you to find where I actually supported Parnell in any way. You won't. But I also don't accept blind ideologue attacks against him or anyone else. You miss no chance to belittle him, so really, who's the bootlicker here. You're just licking the boots of any silly anti-oil cause you can find. It surprises people when they find that I routinely vote for Democrat for state offices, I was a Fran-fan of long ago. But like the little minded liberal you are, you cannot possibly fathom other people actually having an independent thought. Pity for you.