Two weeks ago, Alaskan residents sat anxiously in front of their televisions and computers, tuning in for the 11:00 p.m. announcement from Governor Sean Parnell regarding the 2011 Permanent Fund Dividend (PFD) amount. This year’s total is $1,174, which is over $100 less than last year. Yet Alaskan residents still wait just as anxiously for step two of the PFD process; direct deposits and check mail-outs, which happen Oct. 6.
Though the what of how the PFD checks get spent differs among Alaskans, most agree on the why they deserve it: the high cost of living in Alaska.
The PFD has been an Alaskan tradition since 1976, when Alaskans voted to save a share of the state’s oil revenues and distribute the money to the people. Thus the PFD was born and is protected to this day by an amendment to the Alaska Constitution. Each year a percentage of the money made from big oil of the past five years is calculated to determine the current year’s amount; the interest on the fund is then split between residents to determine the payout. The bigger the payout, the more residents have to spend on anything they wish.
“I get my check direct deposited and as soon as I get it I am going to put it towards school and car loans,” said student Matt Rose.
When asked, most students concurred with Rose, saying that they want to pay off student loans more than anything at this point. Another popular student investment is financing witner and spring break trips
“I’m comfortable with the amount. I plan to put it towards a trip,” said student Ryan Lucas.
Outside of UAA, Alaskan residents tend to use the money for basic necessities.
A 2008 study done by The Foraker Group contracted with the McDowell Group, conducted a statewide household survey to see what Alaskans spent most of their PFD on. Over 38 percent said that they would spend their PFD on household expenses like rent, utilities, groceries, and maintenance. Only 19 percent said that they would put it towards expensive items such as snowmobiles, televisions, and four wheelers.
Another way Alaskans can spend their PFD is through the Pick, Click, Give program, which allows Alaskans to submit part or all of their PFD to an organization of their choice. For the 2011 year, 3.4 percent of Alaskans supported the program and pledged over $1.5 million to help the community.
For outsiders, the PFD may seem like a luxury, but as the Foraker Group study shows, it’s a closer to a necessity in Alaska.
“Everything is already expensive as it is. The problem overall is that things are more expensive in Alaska, adding to the already high cost of things,” said Rose.
If people had a better understanding of the money they are receiving, there might be a better understanding on how it is continuously impacting our society.
That is why the Institute of Social and Economic Research (ISER) has continuously been doing research studies entirely dedicated to the topic of the PFD and how it is utilized and what it means for Alaska.
According to the research, the PFD is considered to a large portion of the population to be the main source of income for Alaskans, which supports the Foraker Group’s findings regarding the PFD being used mostly for household purposes.
Student Mark Linton agrees.
“It helps me pay rent for two months, only a drop in the bucket but when you are a college student,” said Linton.