Starting in 20 September, Alaskans of all ages will begin receiving a payment of $3,284. That is when the state will begin sending out the dividend from the earnings on the investments it makes using the oil, gas and mineral royalties.
The amount, unveiled on Thursday by the governor, Mike Dunleavy, includes $662 in the form of an “energy-relief” payment indented to help Alaskans cope with high energy prices. The combined sum will be the largest payment in dollar amounts that residents have received in the 41-year-history of the Permanent Fund. Adjusted for inflation, it is lower only than the $3,269 Alaskans received in 2008.
Like this year, the payment that year included an additional payment in the form of a $1,200 “resource rebate” that lawmakers tacked on to the dividend to help residents defray the cost of high energy prices after the state itself was able to reap windfall profits on oil revenue and took in more money thanks to a tax on oil firms that was adopted that year.
With energy prices high again this year, state legislators had initially considered a payment totalling $5,500 (an amount that included $1,300 in energy relief) that would be covered mostly by expected increases in the prices of oil. The amount was reeled back after state forecasts that the windfall would be short lived and insufficient to fund that sort of largess.
Despite being lower than his initial $3,700 proposal, Mr Dunleavy, who took office in 2018, described the 2022 payment as the first “fair and sizeable dividend” residents had seen since 2015 (the last time the current-dollar amount exceeded $2,000).
He himself had proposed a $3,700 payment but was satisfied with the $2.1 billion the combined amount would inject into the state economy. He expects the money would eventually make its way to state businesses, but described the payment as a way to help Alaskans pay their bills first and foremost.
“The [Permanent Fund Dividend] at $3,284, a total of $13,000 for a family of four, can go a long way in offsetting the record-high costs of energy and food we’re experiencing, preparing for winter, paying off debt, saving for college or any number of other purposes,” he said.
But if he could live with the amount, Mr Dunleavy, like others who feel more of the fund’s earnings should be going into people’s pockets, remain unhappy with the “arbitrary political process” that is used to determine the amount.
Officially, Alaska has a formula for calculating the amount of the dividend that is based, in part, on a five-year average of the Permanent Fund’s performance. Legislators, however, can vote to use their own maths when calculating the payment and often do so if the state needs money to pay its bills. Had state legislators stuck to the formula this year, for example, Alaskans would have revived a total of $2.8 billion in dividends.
As it turns out, this year’s total amount is in line with Mr Dunleavy’s suggestion that half of the the Permanent Fund’s earnings go back to Alaskans and the other half to fund state services, but having his formula written into the state constitution would, he felt, make sure Alaskans always got their share of Alaska’s wealth.
“Alaskans,” he said, “need to remember [this year’s] amount wasn’t determined by the traditional PFD formula — or any other formula. It was a political decision made in the capitol building during the legislative session.” In maths, sometimes getting right the result is often less important than how you calculated it. The same, it would seem, is true of PFD politics.
Kevin McGwin, PolarJournal
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