OPINION: It's time to file for Permanent Fund Dividends, and contemplate changes
January 30th, 2015 | Carey Restino
If you've made it this far into January without applying for your Permanent Fund Dividend, then there's no use arguing that you are not procrastinating. Every year, well-meaning Alaskans — including, on one occasion, the editor of two rural Alaska newspapers — forget to file their PFD applications. When that March 31 deadline rolls around, there are no April Fools Day exceptions. Trust me on this one.
So, while you are on your anti-procrastination kick, how about expanding the circle a bit? For every one of us who has no good excuse for forgetting to file, there are plenty with a great excuse — age — on either end of the spectrum.
Do you know an elder in your community who could use a hand getting his or her application completed online? It's easy, but it's not that easy, especially if you aren't computer savy. If computers are too daunting, print out the application and bring it over to the elder's house, then make sure it makes it to the post office.
For those living on a fixed income, it could make a world of difference. Then, there are the children living among us. Have their applications made it in? Is there a child in a transitional living situation who may have been forgotten? A few dividends in a child's trust can help a lot when they are making decisions about their future.
It's pretty funny when you are traveling and mention you are from Alaska. "Oh, don't you get paid to live there?" people ask. It's like the only thing known about our state, other than Sarah Palin quotes and "Deadliest Catch" scenes. Sorry, but that's Alaska to a large number of people. Cold, quirky and rich.
While anyone who has compared their dividend check with their heating bill will tell you, the numbers don't quite even out, but for the next while, anyway, the discrepancy may be minimized. Lower fuel prices have already shown up all over the state. Fill your car's tank and you may have an extra $10 left over. Heating oil is the same. And for some, electricity rates have already started to drop.
Unfortunately, the price of oil is also what fuels our Permanent Fund. Back in 1976, Gov. Jay Hammond and the legislature set up the fund, channeling 25 percent of oil revenues away from political powers and into the Alaska Permanent Fund, which invests these monies for the benefit of current and future Alaskans. What was once a $734,000 investment has now grown exponentially. Today, the fund totals more than $52 billion.
Investments and extra appropriations from the legislature have helped the fund grow to its current extraordinary size. Each year, the earnings from the investments of that fund, not the actual money in the fund, are divided up. Some go to inflation-proofing the fund, some go to operating expenses, and some — $944.4 million last year — go to bank accounts of Alaskans across the state.
So, for those who are concerned that current low oil prices will impact next year's dividend check, that's not the case. The payouts are based on a five-year average of investment returns, and the fund is so large at this point that while the amount going into it from Alaska oil revenues may drop, the healthy investment returns make up for it.
A few years ago, however, Alaskans saw their dividend checks drop dramatically due to the economic crash several years prior. Last year's check was the first in several years that no longer factored in the lean years a half-decade before. Given that investments have largely been strong in recent years, we can probably expect decent dividend checks for the next while.
Unless, of course, the Alaska legislature decides to commit political suicide. See, the principal of the Alaska Permanent Fund is protected, but technically, the income from it is not — that same income that goes into dividends. Each year, the Alaska State Legislature technically has the power to appropriate that money for any purpose. But back in 1999, when oil was a paltry $9 a barrel, Alaska voters were asked if the government could spend a portion of the earnings. The answer was a resounding, "No." Nearly 84 percent of voters rejected the idea, despite a hardy campaign by lawmakers to educate the public on the need to balance the budget when oil resources are waning.
So here we are again. One way or another, Alaska must balance its budget. State workers make up a huge portion of the labor force, and cuts to programs like education, roads, social programs and health will hurt all Alaskans, and especially those who depend on such programs for their survival.
And yet, somehow, we must pay for it all. If oil prices stay where they are, combined with dwindling oil production, chances are good that sooner or later, the legislature is going to look to the dividend program, or to a tax of one form or another. It will likely be a painful transition, much like telling a child they must, in fact, eat their broccoli, but no one gets to float by forever without paying their bills, not even in the Last Frontier.