ANCHORAGE, Alaska (AP) — Nearly every Alaska resident will receive $900 for their share of the state's oil wealth, a nice sum to be sure, but nowhere near the amount of the checks before the recession.
The amount of each person's check is based on a five-year rolling average of worldwide markets, which includes the recession years that were more widely felt outside Alaska. This year's amount was a bit larger than last year, but still far from the record payout of $2,069 in 2008.
The Rev. Lorin Bradbury, pastor of a Pentecostal church in Bethel, Alaska, located 400 miles west of Anchorage, wasn't surprised by the amount of this year's check, anticipating it would be close to last year's amount of $878.
He plans on putting his check right into his savings account, and no splurging is planned. In fact, he said if he had any advice for his parishioners, it would be "not to get on a plane and fly to Anchorage" to spend the money.
"There's going to be needs later on," he said, especially with winter setting in and the high costs of fuel in rural Alaska. He would encourage people to plan for those needs now instead of spending the dividend and wondering how they will make ends meet later.
The yearly Permanent Fund Dividend amount is made with great fanfare in downtown Anchorage. Acting Revenue Commissioner Angela Rodell made this year's announcement, saying nearly 593,000 Alaskans will receive their checks next month.
The money, about $576 million total, will be distributed Oct. 3. About 507,000 Alaskans will receive the money through direct deposit that day, and another 86,000 checks will be mailed from Juneau for those that chose paper delivery.
The oldest recipient, Rodell said, is 108 years old, and the youngest was born at 11:59 p.m., Dec. 31. Some recipients allocate part of their dividend to charitable causes through the "Pick. Click. Give." program. Rodell said nearly $2.5 million was pledged this year to 472 nonprofit organizations.
Most dividends will go toward new toys, travel, college savings or paying debts. In the Inupiat Eskimo village of Deering, tribal administrator Dolores Iyatunguk said her dividend is going toward credit card bills and student loans. In the tiny village 520 miles northwest of Anchorage, the cost of living can be prohibitive, with diesel fuel currently $6.50 a gallon, for example. Iyatunguk isn't alone in using the money for necessities, although a small gift to herself would be nice.
"I was thinking about getting a winter jacket," she said. "But that can probably wait." The dividends are distributed annually to residents who have lived in Alaska for at least one calendar year. The amount based on a five-year average of the $47 billion Alaska Permanent Fund's investment earnings, so this year's average includes 2009, a recession year when the fund posted a $2.5 billion net loss in statutory net income.
Alaska wasn't as hurt by the recession, but the Permanent Fund Corp. has a diversified portfolio, and it took a beating when markets plunged in the U.S and worldwide. State officials have said that as long as 2009 is part of the five-year calculation, the amount will be on the lower end. After this year, 2009 will drop from the equation.
Last year's check of $878 was the lowest amount since 2005 and the ninth-lowest in the program that began more than three decades ago. The 2011 dividend was $1,174. The Permanent Fund was established in 1976 after North Slope oil was discovered. The state began distributing money from the fund to residents in 1982. If a resident were to have qualified for every check, they would have pocketed $35,143.
Alaska has no state income tax, but residents must pay federal taxes on the bounty. Every year around payout time, many residents are in the market for a new snowmobile, particularly among rural residents. People have been calling the Polaris and Arctic Cat store in the Anchorage suburb of Eagle River asking what kinds of dividend deals are in the works, employee Doug Bestry said.
For many, the extra money is a way to offset higher prices in Alaska for items such as groceries. For Bestry, the money usually goes toward a splurge, although one year he used his dividend to pay off his pickup. Last year, he used it to visit his mother in Arizona, and he'll probably do that again.
"It's just fun money for me," he said.
Follow Rachel D'Oro at https://twitter.com/rdoro.