Alaskan Payday

Today the majority of eligible Alaskans received an electronic payday of $1654. That's this year's annual individual disbursement of the Alaska Permanent Fund Distribution (PFD). There's a lot of myth and misunderstanding regarding the Alaska Permanent Fund Distribution (PFD). I knew nothing about it when I moved up here.

It was clear that when oil was discovered and subsequently the Trans Alaska pipeline was built, that state oil revenues from oil royalties and leases of state land mineral rights would be greater than the state's ability to spend the money. In 1976 a state constitutional amendment was passed establishing the Permanent Fund to set aside at least 25% of such state oil revenues to benefit future generations of Alaskans.

The principal of the Permanent fund is constitutionally protected, but the revenues or fund income is spent at the discretion of the legislature. For the last 25 years, that income has been split between "inflation proofing" the fund and the Permanent Fund Distribution. The amount disbursed is based on 50% of the revenues of the fund averaged over 5 years divided by the number of eligible Alaskans. This year, the five year average revenue calculation was about $1 billion. Divided by 604,000 eligible residents comes to $1654 each. The highest payout was in 2000 at $1963 which went down to it's recent lowest of $845 in 2005. The absolute lowest was in 1984 at $331.

To be eligible, one must not be a felon and have been a resident of the state for the full calendar year before applying. We moved to Alaska in August 2003. We couldn't apply until January 2005 and we didn't get a dividend until October 2005. It also pays out to children, so practitioners of the rhythm method of birth control make out.

The fund's total asset value is close to $40 B. So far, the state government hasn't had to tap into the fund's revenues to balance their books, but currently they rely on $3-4 billion in oil revenues annually for their nearly $7 billion budget. The production of the oil wells is past it's peak, so it's only a matter of time before the politicians feel compelled to tap into the fat goose of the Permanent Fund revenues to keep the political machinery greased.

No Chaos, I did not shoot this in my back yard.

Here's the wide angle version.