Alaska's Permanent Fund Dividend, explained...

 

I am finally qualified!


So, just what is the Permanent Fund?? Well, according to Wikipedia, this is the definition in a nutshell:


"Shortly after the oil from Alaska's North Slope began flowing to market through the Trans-Alaska Pipeline System, the Permanent Fund was created by an amendment to the Alaska Constitution. It was designed to be an investment where at least 25% of the oil money would be put into a dedicated fund for future generations, who would no longer have oil as a resource. This does not mean the fund is solely funded by oil revenue. The Fund includes neither property taxes on oil company property nor income tax from oil corporations, so the minimum 25% deposit is closer to 11% if those sources were also considered. The Alaska Permanent Fund sets aside a certain share of oil revenues to continue benefiting current and all future generations of Alaskans. Many citizens also believed that the legislature too quickly and too inefficiently spent the $900 million bonus the state got in 1969 after leasing out the oil fields. This belief spurred a desire to put some oil revenues out of direct political control.

The Alaska Permanent Fund Corporation manages the assets of both the Permanent Fund and other state investments, but spending Fund income is up to the Legislature. The corporation is to manage for maximum prudent return, and not—as some Alaskans at first wanted—as a development bank for in-state projects. The Fund grew from an initial investment of $734,000 in 1977 to approximately $53.7 billion as of July 9, 2015.[9] Some growth was due to good management, some to inflationary re-investment, and some via legislative decisions to deposit extra income during boom years. Each year, the fund's realized earnings are split between inflation-proofing, operating expenses, and the annual Permanent Fund Dividend."



Today the fund is valued at:

TOTAL FUND VALUE

AS OF FEBRUARY 28, 2021

$74,234,000,000


You must be a resident for 1 year before you can apply. You carefully answer a few questions and then they will ask for proof that you are who you say you are. I had to send my Passport to the office (not a copy, my actual Passport). I was able to drop it into a secure box just outside the branch office in Fairbanks. I dropped it off last Monday before I got my second vaccine and it was back in my mailbox (in a self-addressed, stamped envelope) on Thursday!


The amount of the dividend seems to be different every year. In the history of the fund, the amount of the individual dividend has been a bit over $330 in the early years to a tad over $2,000 and everything in between. The average dividend is around $1,600. And this payment will be made to every single eligible man, woman, and child in Alaska. This payment is usually sent out in the first week of October. Last year, during the Pandemic, it was released in July to help families who might be struggling. The amount is determined by a formula using the number of eligible residents dividing the amount that has been earned/set aside for dividends.


Including this dividend, taking into account and that there is not an income tax in Alaska plus we have no sales tax in many places in Alaska (Fairbanks does not have a sales tax where North Pole does), it can be really nice living in Alaska. It kind of makes the high shipping costs to get things here offset... maybe!


I hope that this has helped explain how these annual payments are made to everyone who lives in Alaska.