Will Alaskans Really Get $1,000 Dividend Payments This October?

Alaska's Permanent Fund dividend programme will distribute $1,000 payments to eligible residents starting on 2 October 2023, with a second payment on 23 October. This year's dividend is the lowest since the programme's inception in 1982, due to changes in funding strategies amid declining oil revenues.

Last updated: 29 September 2023 (BST)

Key Takeaways

• The first round of $1,000 Permanent Fund dividends will be issued on 2 October 2023.
• More than 600,000 Alaskans are eligible for this year’s payment.
• This dividend amount is the smallest in real terms since the programme started in 1982.
• Lawmakers have deviated from the statutory formula for dividends since 2016.
• Governor Mike Dunleavy proposed a larger dividend but opted for a more sustainable approach.

Understanding the Permanent Fund Dividend Programme

The Alaska Permanent Fund Dividend (PFD) programme was established in 1982 to distribute a portion of the state's oil revenue to its residents. Funded by the Alaska Permanent Fund, which invests oil revenues, the PFD aims to provide Alaskans with a direct share of the wealth generated by natural resources.

Current Dividend Amounts and Payment Schedule

In a decision made by Alaska’s Legislature in May 2023, the dividend payment was set at £1,000 per eligible resident. The funds will begin to be distributed on 2 October, followed by a second installment on 23 October. This decision affects over 600,000 eligible Alaskans, who will receive the dividend as a direct payment.

History of the Programme

Since its inception, the PFD has provided Alaskans with varying amounts based on the state’s revenue, with the highest payments reaching over £2,000 in recent years. However, lawmakers have not adhered to the original statutory formula since 2016, opting instead to rely on the Permanent Fund for state services, leading to financial constraints.

Factors Influencing the 2023 Dividend Amount

The significant drop in the dividend amount this year is attributed to several factors:

• Declining Oil Revenue: Alaska has faced decreased oil revenues, which has impacted the funds available for dividends.
• Legislative Decisions: Lawmakers have deliberately chosen to set the dividend lower to avoid draining the state’s savings accounts.
• Inflation Adjustments: When adjusted for inflation, the current dividend is reported as the lowest in history, reflecting economic challenges.

Governor's Proposal and Legislative Response

Governor Mike Dunleavy previously proposed a much larger dividend of nearly £3,900 per eligible Alaskan, in line with the original statutory calculation. However, this proposal was projected to create a significant budget deficit of £1.5 billion. Lawmakers ultimately opted for a more conservative approach, resulting in the current £1,000 payment.

Implications for Alaskan Residents

The lower dividend may significantly impact many residents who rely on the PFD for various expenses. With the increased cost of living, this smaller payment may not adequately support families and individuals in need. Many residents have expressed concerns about the sustainability of this funding model and the potential for future dividends to be compromised.

What Happens Next?

As the distribution dates approach, Alaskans are advised to ensure their eligibility and to monitor announcements from the Department of Revenue. The future of the PFD programme remains uncertain, especially concerning potential changes to the funding model and legislative decisions that could influence dividend amounts in subsequent years.

Future Considerations for the PFD Programme

Looking ahead, the state faces critical decisions about the PFD programme. Here are some considerations:

• Revisiting the Statutory Formula: Lawmakers may need to reassess the long-term viability of the current approach versus returning to the original formula.
• Balancing State Budget: Finding a sustainable solution that balances the state budget while providing adequate dividends will be crucial.
• Public Sentiment: The opinions of Alaskan residents play a vital role in shaping future legislative actions regarding the PFD.

Conclusion

The $1,000 Permanent Fund dividend payment set for October 2023 is a significant development for Alaskans, albeit the lowest since the programme’s inception. As residents prepare to receive their payments, the implications of this decision and its impact on future dividends remain in focus. It is essential for both lawmakers and citizens to engage in constructive discussions about the future of the PFD to ensure that it continues to benefit all Alaskans.

What do you think will happen to the Permanent Fund dividend in the coming years? Will we see a return to higher payments or a continued trend of austerity? #AlaskaPFD #PermanentFund #AlaskaResidents

FAQs

What is the Alaska Permanent Fund Dividend programme?

The Alaska Permanent Fund Dividend programme distributes a portion of the state's oil revenue to eligible residents, providing them with a direct share of the wealth generated from natural resources.

When will the 2023 dividend payments be issued?

The first round of payments will be issued on 2 October 2023, with a second installment on 23 October 2023.

How much will eligible Alaskans receive in 2023?

This year, eligible Alaskans will receive £1,000, which is the lowest payment since the programme began.

Why has the dividend amount decreased over the years?

The decrease in dividend amounts is primarily due to declining oil revenues and legislative decisions that have deviated from the statutory formula for calculating dividends.

What are the potential implications for Alaskans receiving lower dividends?

Lower dividends may impact residents financially, particularly those who rely on the PFD for everyday expenses, amid rising living costs.