The Permanent Fund Dividend (PFD), Alaska’s small yearly Basic Income, is likely to double this year over last year’s value. The dividend is paid every fall from the returns to the Alaska Permanent Fund (APF), a pool of financial assets accumulated from savings from the state’s oil revenue. The formula for converting returns into dividends is complex. It depends on the average returns over the previous five years and the number of Alaskan residents who apply for it. The exact figure will be released soon, and direct deposits will be delivered by early October.
Mike Burns, the executive director of Alaska Permanent Fund Corporation, was quoted by the Alaska Dispatch saying, “I think the punchline is that the dividend is going to be right about doubling from last year.” The reason for the big increase in the dividend this year has to do with the five-year average used to calculate dividends. The enormous downturn of the 2008-2009 fiscal year have finally dropped out of the calculation. Since then the APF has had a very good run, rising to a total value of $53 billion—an all time record—and its assets returned more than 15% for the 2013-2014 fiscal year.
Last year’s value was $900. So, a doubling would put it the PFD the neighborhood of $1,800 per person or $7,200 for a family of four. The Alaska Dispatch estimates the number will be $1,930.49, “give or take $100.” This would put the dividend near it’s all-time high of $2069, paid in 2008, at the height of the market bubble. Even the record-high amount was far below the livable income that most Basic Income supporters want to see. Yet some of the affects supporters hope to see from a larger dividend are present in Alaska. It has increase economic equality and reduced poverty, and employers have complained that workers are more likely to quit when they receive the dividend.
The APF and PFD are enormously popular in Alaska, but they are not immune to attack. Several years ago the state voted to give the notional dividends that prisoners would have received had they been allowed to apply for the dividend to the prison system. Just this year the state voted to reduce taxes on oil companies, which will ultimately mean less money going into the APF, and therefore, small dividends in the future.
For more information see:
Daniel Gross, “Alaska Is a Petrol State: But it doesn’t act like one.” Slate, August 28, 2014
Alex DeMarban and Sean Doogan, “Estimated at $1,930, Alaska PFD big but no record.” The Alaska Dispatch, August 27, 2014
Dermot Cole, “Permanent Fund principal, not oil royalties, drives most of its growth.” The Alaska Dispatch, August 15, 2014
Trilbe Wynne, “Alaska Permanent Fund tops $50 billion mark, returns 15.5% for year.” Pensions and Investments, August 11, 2014
Associated Press, “Alaska Permanent Fund tops $50B threshold.” Fairbanks News-Miner, August 8, 2014
Sean Doogan, “Size of 2014 PFD checks may double from 2013’s $900.” The Alaska Dispatch, July 30, 2014.
KTVA, “This year’s PFD checks could double the 2013 amount.” KTVA-TV, July 30, 2014
