Friday, September 07, 2012

KTVA Channel 11 Predicts 2012 Alaska Permanent Fund Dividend Of $863.99; Actual Amount $878.00

Update September 18th: The actual amount of the 2012 Permanent Fund Dividend will be $878.00, as officially announced today. A total of 677,733 Alaskans applied for this year's dividend and 646,805 were qualified. About 563,000 PFDs will be transferred to bank accounts when direct deposits begin Thursday October 4th, with roughly 85,000 being mailed out as checks. More than $567 million was distributed in this year's checks.

In August 2012, the Anchorage Daily News warned us that the size of the 2012 Alaska Permanent Fund dividend would be smaller than that paid out in 2011. Contributing to the decline was that the high-water income mark achieved in 2007 fell out of the five-year average used as the baseline, while the low-water income mark achieved in 2009 remains in the average. The official dividend amount will be announced by Revenue Commissioner Bryan Butcher on September 18th at 11 a.m. in Anchorage. For applicants electing direct deposit, the checks will be deposited on October 4th; for all others, the checks will be mailed during the ensuing two to three weeks.

But for those who are impatient, two of our media outlets compute their estimates of the dividend, and they're usually close to the actual amount. KTVA Channel 11 is the first to release their figure, and they estimated a payout of $863.99. Basically, the Permanent Fund Dividend Division calculates the amount of a PFD check by dividing the amount available for distribution from the PFD Fund Earning Account by the number of eligible applicants.

So how has KTVA done in the recent past? In 2011, they predicted a payout of $1180.58 vs an actual payout of $1,174.00. And in 2010, KTVA predicted a dividend of $1,402.32 vs. an actual amount of $1,281.00. Whoops! But at least their forecasting technique is improving.

KTUU Channel 2 did not calculate their own prediction this year, but turned it over to Clark Middle School math class to calculate a prediction. The class came up with a figure of $898.76. In 2011, KTUU predicted a dividend of $1,203.45 vs. an actual of $1,174.00. In 2010, they forecast a dividend around $1,305, even specifying a range between between $1,295 and $1,329. The actual was $1,281.00.

So what we do know is that the media's estimates, while very close, are usually on the high side. The best strategy -- don't spend it before you get it.

The PFD was originally conceived as both a dividend and a longevity bonus. The first dividend plan would have also paid Alaskans $50 for each year of residency up to 20 years, but the U.S. Supreme Court in Zobel v. Williams disapproved the $50 per year formula as an invidious distinction burdening interstate travel. As a result, each qualified resident now receives the same annual amount, regardless of age or years of residency. So it's a mixture of socialism and capitalism.

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