Money for Nothin’
In 1976, with oil wealth about to come gushing out of the south end of the pipeline, voters approved a state constitutional amendment calling for a percentage of all oil and mineral revenues to be placed in a Permanent Fund (www.apfc.org). Money from this account can only be used for investment, not for state operating expenses, which explains why, during recent Alaskan recessions, when hundreds of state workers were laid off and state funds were severely cut back, billions of surplus dollars sat untouched in the fund.
It’s the only one of its kind in the country, the only state fund that pays dividends to residents, and the largest pool of public money in the country. In 2009—after the stock market tanked—it still totaled more than $33 billion.
A portion of the interest and capital gains income from these assets is distributed to all Alaska residents—even children—in a yearly Permanent Fund Dividend check sent out each October. In 1982, the first year of the dividend, each Alaskan received $1,000, but it didn’t reach that level again until the stock market boom of the late 1990s, when it topped out at nearly $2,000.
The 2009 payout was around $1,300 per person. All this sudden cash doesn’t go unnoticed by local businesses, especially car dealers, furniture stores, and airlines, who put out a plethora of special deals as soon as the money hits the banks.
© Don Pitcher from Moon Alaska, 10th Edition