Most Alaskans who are receiving the annual dividend from the Alaska Permanent Fund will notice it in their bank or credit union accounts (Wednesday), the day the state makes the direct deposits of this year's payment of $845.76. Some will no doubt be grumbling about how the dividend is so small they didn't really notice it at all and they won't be able to make the down payment on the recreational snowmachine or boat or four-wheeler or whatever. Others will have what is arguably a more serious lament in that they've got to spend all of theirs and maybe a family member's, too on heating fuel, whose rise in price has corresponded in a spectacularly bad way with the continuing drop in the dividend's size.
As tough as it might be to hear, Alaskans need to remember they are blessed with a benefit unique in this country. No other state gives its residents an annual payment just for being alive and meeting a few other minor, requirements.
Sure, the $845.76 of 2005 isn't the $1,963.86 of 2000, but it's still a decent chunk of money that Alaskans receive for doing, essentially, nothing. That's no solace to people who have come to rely on the dividend to assist with personal or family finances, but there's still no escaping the fact that the money is unearned, not a government aid program and as such comes with the risk of a sharp decline.
People looking back wistfully at that record payment of 2000 can take note of a bit of good news in the announcement of this year's dividend amount. While the amount declined for the fifth consecutive year, the percentage of decline was the lowest since 2001. This year's dividend is just 8 percent smaller than last year's; the record decline occurred in 2003, when the dividend fell by 28 percent over the prior year's.
It's also good to remember the dividend amount is not something just pulled out of an open barrel of oil. It's calculated based on a five-year average of the permanent fund's realized earnings, with the result subject to a few other mathematical steps before the amount is determined.
The end result, year after year, is a boost to personal and family pocketbooks and to local and state economies. For 2005, $372 million will be transferred into the private sector.
There is real debate about whether Alaska is getting all it can for its oil and gas, and whether, if it could be getting more, that would lead to higher dividends in the future. The debate is all the more pointed given that the oil industry is making stunning profits and will apparently keep doing so since the price of oil isn't likely to come down anytime soon. Those results naturally lead Alaskans to look at the size of this year's dividend and wonder if all is fair. But trying to obtain more from the industry, some argue, would actually lead the companies to invest less in Alaska. And if oil industry investment declines, those same people say, the dividend would suffer. It's a fine line.
(Wednesday) , however, it should suffice to note the dividend continues to be a major part of the Alaska economy and landscape and will remain that way for years to come. Alaskans sourdoughs and cheechakos alike should be proud of the foresight that created this wealth-sharing program. Variations in the dollar amount from year to year shouldn't change that.
The Fairbanks Daily News-Miner
Oct. 12, 2005
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