Alaskans Earn Over ,000 in Annual Oil Wealth Payments

Alaskans Earn Over $3,000 in Annual Oil Wealth Payments

ANCHORAGE, Alaska (AP) — Nearly every Alaskan received a financial windfall of more than $3,000 on Tuesday, the day the state began making payments from Alaska’s investment fund seeded with money from the state’s oil wealth.

The payments, officially referred to locally as the Permanent Fund Dividend or the PFD, were $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 in bank accounts Tuesday, and checks will arrive later for those who opted.

Residents use the money in a variety of ways, from buying big-screen TVs, vehicles or other goods, using it for vacations, or putting it into savings or school fees. In rural Alaska, the money can help offset the huge costs of fuel and food, such as $14 for a $12 carton of soda, $4 for a bunch of celery, and $3 for a small bowl of Greek yogurt.

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

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

Among the communities most damaged was Nome, the largest city on the coast with a population of approximately 3,500 and known as the finishing point of the world’s most famous sled dog race.

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 30.48 meters of frontage and a building at the family’s campsite, about 5 miles (8 kilometers) east of town.

“The beach is a lot closer,” he said.

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

“Even people who haven’t been harmed, with the inflation here, is hitting really hard,” he said.

Farley said gas costs $7 a gallon and will remain so until the next shipment arrives next spring because barges cannot deliver once the Bering Sea freezes over.

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

“What it will mean for many families is that they can break even with the high prices we pay,” he said.

The oil wealth check, which some in Alaska consider a right, is usually derived from the earnings of the nest egg investment account. 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. Dividends are traditionally paid with income from the Alaska Permanent Fund. Lawmakers began using the revenue from funds to pay for the government in 2018 as well and tried to limit how much of the revenue can be withdrawn for either purpose. The amount going to the dividend this year represents half of the draw allowed.

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

The smallest check ever was $331 in 1983. The largest before this year’s check was $2,072 in 2015. If someone collected every check since 1982, it 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 village of Tanacross in inland Alaska.

There will be no frivolous expenses when they get their paper check in October. Instead, the Jonathans’ main purchase will be firewood.

“The wood I’m hoping to get is $1,600, and it’s a load of 10 cords,” she said. “If I buy that, I’ll survive the winter.”

Snow has already fallen on the nearby mountains and temperatures in the Athabascan village are typically well below zero in winter. “It’s cold, cold, cold,” she said.

All the money left over by the couple goes towards a new hot water system, floors for their house and Christmas gifts for their grandchildren, who want new phones.

Leave a Reply

Your email address will not be published.