The Anchorage Daily News has just reported that Governor Sarah Palin has announced that the 2007 Permanent Fund Dividend (PFD) for each eligible Alaskan will be $1,654, a large jump from 2006 and the fourth highest payout in history. This represents each eligible Alaskan's share of the state's oil riches, derived from the state's oil royalty investment program. A similar program is envisioned if and when the natural gas pipeline is built. Those who chose to receive via direct deposit will get their dividend as early as October 13th; those who chose "snail mail" will receive dividends as early as November 13th.
However, receiving a dividend check isn't automatic. One must fill out an application certifying Alaskan physical residency every year, and submit it by a firm deadline of March 31st. One must effectively have resided in Alaska for one full year before being qualified to receive a dividend. And PFD checks can be garnisheed by the state for a variety of reasons - to include restitution for crimes committed, or to satisfy child support obligations.
All members of an Alaskan family, including minor children, are eligible. Parents fill out the applications on behalf of their kids. So, based upon this year's announced dividend, a family of four could get around $6,400. That's not exactly chump change.
However, we Alaskans urge you not to move up here just to suck down PFD checks. If you plan on moving up here, make sure you have a job lined up in advance, or have a skill in high demand. Click HERE to get a representative sample of jobs available at any given time.
Click HERE for more information about the current status of the Fund. Click HERE for the Permanent Fund Corporation website to learn more about the history , mechanics, and proposed modifications to the Fund.
From the Permanent Fund Corporation website, here is a brief description of the formula used to compute the dividend:
The dividend formula...
(1). Add the Fund’s Statutory Net Income from the current plus the previous four fiscal years. This five-year average allows for a “smoothing” effect against year-to-year realized earnings volatility.
(2). Multiply by 21%. This provides an average of the five years of earnings.
(3). Divide in half. This amount goes towards dividends. From the half remaining, money is transfered to inflation-proof the Fund principal. After these two uses, any residual realized earnings stay invested in the Fund's earnings reserve account, where they are available for the Legislature to spend.
(4). Subtract prior year obligations, designated state expenses and the costs of operating the Department of Revenue Permanent Fund Dividend Division.
(5). Divide by the number of eligible applicants. This figure equals the amount of each PFD.
Here is the history of individual PFD payouts:
The Permanent Fund is also known as the "third rail" of Alaska politics. Woe betide any candidate who proposes to reduce the share to the public, no matter what the greater public interest might justify.