Alaskans to Get $878 in Yearly Oil Wealth Payout

AlaskaBy RACHEL D'ORO

ANCHORAGE, Alaska (AP) - Buy an iPhone 5 or replace the leaky rain gutters? Splurge or save? Ah, the tough choices that befall Alaskans every year, when they get their dividend checks from the state's oil savings account just for living here.

State officials said Tuesday that eligible Alaskans will receive $878 this year. That's significantly less than last year's dividend of $1,174, which was the smallest since 2006. The payout will be distributed Oct. 4.

Like others surveyed in rural parts of the state, Sina Takafua, from the northernmost town of Barrow, plans to use her first-ever Alaska Permanent Fund dividend to pay bills. That way, she said, she can free up paychecks from her job at the local fur shop and get her Christmas shopping done early.

Some of her customers, on the other hand, are going for some warmth - and style. They're already pre-ordering parkas made of caribou, wolverine and other furs.

"They're waiting for their PFD to pay for them," said Takafua, who moved to Alaska from Maui, Hawaii, with her two sons in 2010. Her husband joined the family later, so he's not yet eligible for a dividend like they are.

New residents must live in Alaska for one calendar year to benefit from the permanent fund, which was established in 1976 after North Slope oil was discovered.

The Alaska Permanent Fund Corp. said last month that residents could be looking at a smaller dividend that last year's.

The amount of investment earnings allocated to dividends is based on a five-year rolling average of Permanent Fund performance. Dropping from the average this year is 2007, a recent high-water mark in which the fund earned $3.4 billion in statutory net income, the realized gains used in calculating the dividend. Staying in is 2009, during the recession, when the fund recorded its first net loss in the statutory net income.

There's no state income tax in Alaska, but residents must pay federal taxes on the bounty. Still, it's free money for every eligible man, woman and child. Don't expect anyone to balk at it.

In the western town of Nome, many residents are using it to pay for outrageously expensive groceries and gasoline, which sells for almost $6 a gallon. Gone are the days when people spent their dividend checks on snowmobiles from Morgan's Sales and Service shop, said fourth generation owner Pat Johanson.

As for Johanson, his plans depend on how winter fares compared to last year, when temperatures were more brutal than usual. Johanson, his wife and four children could have a vacation in the near future.

"If January gets to 30 and 40 below again," he said, "I want to go to Hawaii."

So does Sean Irvin of Anchorage. He went there on last year's dividend and wants to go to Maui with this year's money.

Still, there he was at an Anchorage Best Buy, eyeing another PFD treat - no, not the new iPhone coming out Friday, but a humble phone for a landline.

"I want big buttons and caller ID," Irvin said.

Increase your money and finance knowledge from home

Understanding Credit Scores

Credit scores matter -- learn how to improve your score.

View Course »

Investing in Emerging Markets

Learn to invest in a globalized world.

View Course »

Add a Comment

*0 / 3000 Character Maximum

11 Comments

Filter by:
tmoschetti

I certainly didn't expect anyone from the OP (Obama Press) to tell us the genesis of these payments to ALL of Alaska's residents, so I'll tell you.

Sarah Palin began them as governor after taking on the corrupt, good old boy gang in HER OWN PARTY. One of her first actions was to RENEGOTIATE the deals with the oil companies so that ALL, not just a few, Alaskans benefitted.

On the opposite end of the spectrum, Obama refused to take on the legendary corruption of Illinois/Chicago politics, but instead benefitted from it from the beginning of his "legendary" (in his mind) career! Obama was intertwined with Blago, and Tony Rezko, both sitting in prison today, where Obama should be for his actions in manipulating bankruptcy rules to benefit his UNION owners in the auto bankrupticies, and his big donors and bundlers in the Solyndra bankruptcy.

Despite KNOWING that Solyndra was on very shaky ground, Obama gave them a half billion of OUR money, then set it up so that his big money pals were moved a head of the taxpayers for recovering any of the bankruptcy money.

September 19 2012 at 10:57 AM Report abuse rate up rate down Reply
baracklsevil

Why is this news?

September 19 2012 at 12:04 AM Report abuse rate up rate down Reply
twohuskins

Sarah Palin can take the whole family out to Chick-Fil-A now!

September 18 2012 at 11:29 PM Report abuse rate up rate down Reply
chris

hopey5000 silly --you can drill all u want but they will still sell it on the OPEC market at 100 dollars a barrell. If you had barells of oil wouldn't you sell at the highest rate.The only thing we can do is use less..

September 18 2012 at 11:29 PM Report abuse +1 rate up rate down Reply
chris

hopey5000 silly --you can drill all u want but they will still sell it on the OPEC market at 100 dollars a barrell. If you had barells of oil wouldn't you sell at the highest rate.The only thing we can do is use less..

September 18 2012 at 11:28 PM Report abuse +1 rate up rate down Reply
hopey5000

Gas prices are so low and the economy is doing so well, that we certainly don't need any oil drilling. Besides the obvious stability in the middle east ensures a reliable supply.

September 18 2012 at 10:31 PM Report abuse -1 rate up rate down Reply
JohnnYuma

I used to live in Eagle River Alaska. Beautiful country, but even moose can be dangerous..

September 18 2012 at 9:29 PM Report abuse +1 rate up rate down Reply
ron

I was wondering...I was born in Fairbanks in 1956, befor Alaska was a state, am I grandfathered in on this rebate???

September 18 2012 at 9:07 PM Report abuse +1 rate up rate down Reply
hrhjonii

Did someone turn of the spigot?

September 18 2012 at 7:23 PM Report abuse rate up rate down Reply
manaktan

WELL ITS BETTER THAN NOTHING

September 18 2012 at 6:46 PM Report abuse rate up rate down Reply
1 reply to manaktan's comment
ron

We get a lump of coal here in Michigan....

September 18 2012 at 9:09 PM Report abuse rate up rate down Reply