Free Money for Alaskans
Every year in early October each qualifying Alaskan resident receives a check from the State of Alaska. In 1976, Former Governor Jay Hammond proposed a program that would set aside a percentage of the State of Alaska’s oil revenues for the benefit of Alaskans. After several years of hashing out the details and litigation, the first Permanent Fund Dividend distribution was made in 1982.
The money that goes into the Permanent Fund is managed by the Alaska Permanent Fund Corporation and each year the distribution amount is calculated by taking into account the previous five year’s realized earnings. This system of averaging prevents year-to-year payouts from succumbing to wild fluctuations. What this means is that if the stock market plunges one year, or if oil prices hit an all time low, the average will safeguard the account to some degree. The smallest distribution amount was $331.29 in 1984. The largest distribution was $2069.00 in 2008.
To qualify for the Permanent Fund Dividend (PFD), each individual must turn in an application by March 31st. If the criteria for Alaskan residency are met, a payment can be expected later in the year. “Dividend Day,” as it is known to Alaskans, is the day the payments are deposited into bank accounts.
To spend or to save?
Alaskans can spend the money any way they wish. Some invest their children’s dividend money into the Alaska College Savings program. Others use the money to help get caught up on bills. Businesses around the state offer “dividend deals” and a great deal of money gets reinvested into the local economy. The cost of living in Alaska is generally higher than in other parts of the country, so for many the money helps to cover the basics such as heating fuel and groceries. It’s not uncommon for Alaskans to use the money to purchase plane tickets in order to escape Alaska’s long, cold winters for a short while or to go visit family members in other parts of the country.
In 2008, Pick. Click. Give., a charitable contributions program, was launched in association with the PFD. When applying for the dividend, Alaskans are now given the option to have as little as $25.00 or as much as their entire dividend donated to non-profit organizations of their own choosing. On April 1, 2011 it was announced that Alaskans had pledged $1,570,900.00 from their 2011 dividends.
The laws regarding the Alaska Permanent Fund dividend protect it from being used for the state’s operating expenses without a vote from the citizens. This safeguard protects the fund from being used for political purposes and essentially ensures that it will be around for the foreseeable future.