You’ve found your way to post #5 of my series of articles on the Urban Alaskan, written for my non-Alaska friends, where I talk about how my day to day experience is exactly like yours, mostly, except for the moose and timezone. If you’d like to catch up, you can check here.
To answer the question in short, Yes. We get paid a Permanent Fund Dividend (PFD) each year. We don’t pay any sort of state taxes, however cities and boroughs are a bit different, each having a patchwork of sales and property taxes. Before I go on about this at all, I want to be clear, one thing the PFD is NOT is universal basic income. Regardless of what Mark Zuckerburg said about it, or anyone else. The PFD is the tip of an odd regulatory iceberg that is somehow both socialist and fascist. In this state, even in our little urban corners, land owners only own the surface. Everything below ground is available for sale to the highest bidder. This means that it’s totally possible for a company to drill for oil under your house without any sort of personal compensation. The PFD is our consolation prize for having the minerals sold out from beneath us. On one hand it’s a totally equitable system where everyone shares the wealth, on the other, it’s a system where big companies run everything and dole out a little cash to make it seem above board.
The past couple of years of PFDs have been pretty average as far as things go. In general, the value of the PFD has a lot more to do with the stock market than oil these days. The state has some $60 billion invested in various places. Alaskan residents are given equal shares of ½ the five year average net earnings of the PFD or something like that. Right now these payments are in jeopardy due to a massive fiscal crisis. So, while last year we were each due some $2100 (Yes that’s 10K for my family), we only got just over $1000 each. This year is going to be similar. Next will probably be even more
What’s interesting about the PFD isn’t the fact that we get money, I think, it’s the PFD sales. At this point you might ask, “PFD sales? What the hell is this?” Put this picture in your mind: A twenty foot tall stack of flat-screen TV boxes. Back when I was in college, before flat-screens were in wide use, we had a couple of really good PFD years. I recall walking into Fred Meyer and seeing TVs stacked to the ceiling. This didn’t actually even cause me to stop and think at the time. I mean, hell, everyone was flush with a couple thousand bucks a person seems like it’d be as good a time as any to buy a TV. I didn’t think about it until I moved to Maryland and there was no PFD or PFD sales.
About ten years ago or so, when oil was astronomical AND the stock market was clipping along, we had a two-thousand dollar PFD PLUS Sarah Palin gave everyone another $1,000 ‘energy bonus’, which rang up to a solid $3,000/person across the state. There is a reason she’s well liked here. Overnight, my bank account went from being a mud-puddle in a desert to a Scrooge McDuck swimming-pool. That’s the year I put the addition on the house.
I can’t speak for rural residents, but for an urban Alaskan, the PFD has become a pretty routine part of life that, more often than not, gets put to some practical use with a bit of splurge. Each year, we apply and receive our money. Typically, we use it for mundane things, like fixing the car or paying off some debt. This year, for example, we’ll be paying off the remains of Stacy’s student loans and maybe, if the kids have all straight-As and I don’t have to yell at them every night for not doing their homework, we might invest in a new video game console.
There it is – we get a PFD. No, it’s not anything like what folks experience in the lower-48, but also recall that food and things (like lumber or cement) cost a lot more here, as does fuel (in spite of owning vast oil reserves), and to be honest, paychecks aren’t dramatically better here than elsewhere, in some cases rather considerably less than industry standard. While it sounds cool, it’s just helping us to fill in the cracks and help us forget that an oil company might very well just drill our water out from under us at any moment.
Next Up: Do you use American Money? (Misconceptions)