Dividend decisions

Residents, businesses benefit from permanent fund check

More than 600,000 Alaskans likely noticed a deposit in their bank accounts of $1,174 cut from the state's Permanent Fund yesterday.


But while some residents might have spent that money on a new luxury item, paid bills or stuffed it all away in savings, Soldotna resident Dave Waldal had a different plan for his.

Waldal, 51, used a slice of his Permanent Fund Dividend check to purchase a tank of propane, a hose, and a heater to get him through the winter. The former heavy equipment mechanic said he lives in a tent in the woods.

"Why pay rent?" he said with a laugh sitting outside of Fred Meyer on Thursday - the day known around the state as dividend day.

The rest of his check?

"It's staying in the account and it's not coming out," he said. "I'm going to need that in the winter. I'm not touching it."

A few steps away, Angela Thiele was loading groceries into her car. Thiele said she hasn't received her dividend yet, but planned to spend it on a trip to Seattle to see the Seahawks play.

"My husband needs a vacation," she said. "The other ones I get for my girls I save every year for college."

Thiele contends a lot of residents in the area depend on their PFD.

"You can tell when you go into the grocery store because they are loading up their baskets," she said. "Yeah, it's a good thing, until taxes come along."

However, what is less certain is what those same residents will use that money for over the next several weeks.

Fredrica Thompson, who was tending the register of Country Liquor in Kenai on Wednesday afternoon, said it's often hard to tell how or why residents spend their PFDs.

But, she suspects most Peninsula residents will be paying bills, or saving for the winters' likely high energy consumption costs.

"I stock up on groceries, pay a few bills - I guess it depends if you're 53 or if you're 21," she said with a laugh.

She said a lot of local storeowners and retailers look at PFDs with hungry eyes as well, hoping to get customers to part with theirs on a new item.

Country Liquors usually has a sale on beer and liquor around the beginning of October, but that has more to do with moving summer inventory off the shelves than attracting thirsty check holders, she said.

Dustin Aaronson, owner of Old Town Music in Kenai, contends that most residents used to plan their PFDs for luxury items more than what they need. Now, he thinks they are likely just using it to balance out cost of living expenses.

He said he has seen the effects of the switch on his sales, which used to peak around the time of the PFD release several years ago.

"In the early years, we would probably see a steady growth in sales of high ticket items or nice guitars or whatever from PFD through the holiday season so it was a pretty good push for us," he said.

Although Aaronson said that's not the case anymore - that he makes a steady income repairing used musical equipment on a regular basis - Jeremy Love, a Dan's TV salesman, said the opposite is true for his store.

"It is absolutely something that every small business prepares for," he said.

Love said the store sees a sizeable increase in the numbers of TVs and home theaters sold around PFD time and residents will often shop early, asking about what sales the store will run come October.

The result, once the check hits the bank, is comparable to a fever, he said.

"People are in a hurry to spend it - it's like immediate gratification," he said. "You need to have it there to grab and go, not, ‘Oh, I'll have it next week.'"

Looking around the store, he said Wednesday felt like the "calm before the storm."

PFD day isn't the day to be late to work, he said.

"It's a big day," he said. "The economy isn't just tough on the consumer, it's tough on the retailers as well, so you've got to capitalize on those days you get."

Brad Carver, manager of Beemun's Bike and Ski Loft, said he usually errs on the practical side of how he divvies up his check.

"Mine usually goes into savings and my kids' goes toward their college education," he said. "But, I typically don't go crazy. I am pretty conservative with mine."

Carver sees a lot of residents spend their PFD on a new set of cross-country skis for use on the numerous trails in the area.

"It always snows," he said.

In previous years there was a noticeable bump in residents out shopping, he said.

"I think we saw more of it when people actually got physical checks," he said. "I think the direct deposit dampers a lot of it because it goes straight to the bank and they use it for other things versus having a check in your hand.

"You used to see 9-year-old kids coming in here with a handful of (hundred dollar bills) and you don't see that anymore, but maybe that's a good thing."

Carver's gut feeling tells him most Peninsula residents will keep their dividend "pretty close" this year, considering the national recession.

"But we are going to have a lot of stuff here and we are going to look for a good year and we'll see what happens," he said. "We're positive."


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