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 amount of the PFD varies quite a bit. When I first wrote this blog it was fairly high (maybe 1500?). As I write this now in 2021, we’re not likely to get one, but if we do, it won’t exceed about $600/person. In general, the value of the PFD has a lot more to do with the stock market than oil these days. The state has MANY billions of dollars 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. I expect that will persist.
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.
Some years ago (maybe 15?), 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.
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)
Wait. Y’all speak english, you dollars not ice as currency, & aren’t all Eskimos??? What’s wrong with this world! *smirks* Interesting read.
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I vaguely recall (I was in 5th grade) my mom trying to explain mineral rights to me when my parents bought their house. They, too, didn’t own the mineral rights under the house, and for a time I had visions of Shell Oil putting a grasshopper pump in our swimming pool. 🙂 I was not pleased, to say the least. With a few more years under my belt I finally realized how slim the odds of that happening actually were. This is the best explanation of the PFD I’ve read. (And I’ve read a few) Thanks for a great series, Dave.
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🙂 glad you’re liking them.
[…] You’ve found your way to post #6 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’re interested in catching up, you can go here. […]
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