Do Alaskans Really Get Free Money???

There are things I don’t enjoy much about Alaska. Expensive food and gas, being far from family, short summers. But there are other things I absolutely love! No humidity, gorgeous scenery, fabulous fishing, and something else we are finally getting in on since we are Alaskan residents – the PFD!!!

I’ll let Andy explain since he knows the technicalities.

PFD? What’s that? Oh, yeah! The State of Alaska pays you to be a resident, right?

This is an example of a few questions that people might have about the PFD in Alaska. The Permanent Fund came about when the Trans-Alaska pipeline was put into place and started transporting oil from the north slope to Valdez, where it was loaded into tankers and shipped to Seattle to be processed into petroleum products such as gasoline and diesel fuel. The income from the oil leases brought in a significant amount of money for the State, but those who thought it through realized that there wouldn’t be oil there forever if it was being extracted. A bill was passed that reserved $0.25 out of every dollar from oil revenue for what is now called the Permanent Fund. The Permanent Fund is being invested and is bringing in money and growing. Some of the money that is made from investments is used for the state budget, and some of it is distributed among the eligible residents of Alaska every year. The Fund itself is safe from direct control of the politicians, but the earnings are used for State budget needs and the dividend.

In 1982 a ballot measure was put forth to give the residents of alaska some of the earning from the Fund’s investments. You can guess how that went over! I mean, who would say no to free money? The measure was passed and the Permanent Fund Dividend was started and remains to this day. The last three years the politicians in power have unconstitutionally reduced the amount that went to the dividend, and that was political suicide. We now have a new governor who wants to pay back the amount that was withheld and used for State budget. By the way, putting more money in the budget did not do anything towards making the snow get cleared off of the roads any faster. If anything it was worse!

The amount of the dividend varies with the year, and with how well the investment market is doing. It also varies with the price of oil and with the amount of oil being produced. Since Donald Trump opened up the Arctic National Wildlife Refuge for drilling there will be more revenue generated from more oil produced. For the first time in 75 years of US history we are now a net exporter of oil, meaning that we are producing more oil than we use! There have been other major innovations in oil production such as fracking that have played major roles in the production of oil as well, causing the price of gas to drop significantly. How do you like that?

Those who are eligible for the PFD are people who have lived in Alaska for a year or more, including children. If you have a family of ten and the dividend is $1000.00 you get a payout of $10,000.00 per year. However, if the payout is $3000.00 per person then the total is $30,000.00. Now, before you up and move your large family up here, just remember that there are extra costs to living here, and the PFD helps to offset those costs. Cost of living is generally high. If you live in an area where the land price is low then you have to travel a long distance to anywhere. Once you get there, the prices of food are about three to four times what you would find in the lower 48. Gas is $2.85 as of yesterday, vs $2.15 in Columbus today. Travel is much longer and there are hazards such as moose and icy roads. Factor another set of winter tires and rims into your annual vehicle cost, and either a fourwheeler with a plow or a snowblower for snow removal, and you have about accounted for the PFD. Well, not quite, actually, but it isn’t a totally free ride, generally.

We plan on using our PFD for purchases that we would have a hard time getting otherwise, such as a nicer vehicle or for equipment of some sort. We will see when the time comes, though. I am just thankful for the extra boost.

-Andy

It has taken almost two years for us to qualify for the PFD since we moved up in the middle of the year, but nevertheless, as Andy said, the boost will be nice!

Many people put their children’s PFD into a college fund, and we will probably do something similar. Because of the PFD many Alaskan teenagers are able to go through flight school and buy their own airplane, or start a business debt free, or get their first vehicle. I’m excited about the possibilities for our children growing up in Alaska.