HomeWorldAlaskans receive over $3,000 in state oil wealth paychecks

Alaskans receive over $3,000 in state oil wealth paychecks

Nearly every Alaskan received a financial windfall of more than $3,000 on Tuesday, the day the state began distributing payments from the Alaskan investment fund that has been seeded with money from the state’s oil riches.

The payments, officially called the Permanent Fund Dividend or PFD locally, came to $2,622, the highest amount ever. Alaska lawmakers added $662 as a one-time benefit to help residents with high energy costs.

A total of $1.6 billion in direct deposits began arriving in bank accounts on Tuesday, with checks arriving later for those who opted in.

Residents use the money in a variety of ways, from buying big-screen TVs, cars or other goods, using it for vacations, or putting it into savings or college funds. In rural Alaska, the money can help offset huge fuel and food costs, like $14 for a 12-pack of soda, $4 for a bunch of celery and $3 for a small container of Greek yogurt.

“We are experiencing record inflation that we have not seen since the first PFD was paid for in 1982,” Governor Mike Dunleavy said in a video. “Alaskans have borne the brunt of this inflation, from the gas pump to the grocery store, and this year’s PFD will provide much-needed relief as we head into winter.”

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The time for the checks couldn’t have come at a better time for those living on the state’s vast western coast, which was devastated last weekend by the remnants of Typhoon Merbok. Damage to homes and infrastructure was widespread along 1,000 miles (1,609 kilometers) of coastline.

Among the communities that suffered the most damage was Nome, the largest city on the coast with about 3,500 inhabitants and known for being the end point of the most famous dog sled race in the world.

Howard Farley, now 90, helped secure Nome as the Iditarod finish line more than 50 years ago. His century-old home was safe from the storm on high ground in Nome, but they lost about 100 feet of frontage and a building at the family’s camp about 5 miles to the east. from the city.

“The beach is much closer,” he said.

He said the payments, which would be more than $16,000 for a family of five, are badly needed.

“Even the people who weren’t hurt, with inflation up here, that’s really hitting hard,” he said.

Farley said gasoline is $7 a gallon and will stay that way until the next shipment arrives next spring because the barges can’t deliver once the Bering Sea freezes over.

“The price won’t go down like it does in Anchorage and other places because you can get deliveries almost anytime,” he said.

“What it will mean for many families is that they can cover the high prices that we are paying,” he said.

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Fund established in the 1970s

The oil wealth check, which some in Alaska see as entitlement, is usually derived from savings investment account earnings. The diversified fund was established during the construction of the trans-Alaska pipeline in the 1970s and is now worth $73.6 billion.

There is an annual application process and residency requirements to qualify for a dividend. Traditionally, dividends have been paid using earnings from the Alaska Permanent Fund. In 2018, lawmakers began using the fund’s earnings to help pay the government and tried to limit how much of the earnings can be withdrawn for both purposes. The amount allocated to the dividend this year represents half of the authorized draw.

Residents received the first check, $1,000, in 1982. The amounts have varied over the years and were traditionally calculated on a five-year moving average to cushion downturns in the economy.

The smallest check was $331 in 1983. The largest check before this year’s check was $2,072 in 2015. If someone has cashed every check since 1982, that would be $47,049.

Mildred Jonathan, 74, and her husband, Alfred, 79, live about 100 miles (161 kilometers) west of the Canadian border, in the Alaskan interior town of Tanacross.

There will be no frivolous spending when you get your paper check in October. Instead, the Jonathans’ main purchase will be firewood.

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“The lumber I’m hoping to get costs $1,600 and it’s a 10-cord load,” he said. “I’ll survive the winter if I buy that.”

Snow was already falling on the nearby mountains, and temperatures in the Athabascan town during the winter are often well below freezing. “It’s cold, cold, cold,” she said.

The couple’s remaining money will go towards a new hot water system, flooring for their house and Christmas presents for their grandchildren, who want new phones.

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