And I couldn't find any information on when the exact amount would be announced. Today I called the Governor's office in Anchorage and they told me the date the amount will be announced is Tuesday, September 21.
As I said in the previous post, a July 31 ADN article predicted it would be pretty close to last year's $1,305 - between $1,250 and $1,320.
I would also note a comment from Anonymous in Ohio, who raised questions that I think are not uncommon from people Outside [Alaska jargon for everywhere not in Alaska.] So I'm including Anon's comment and my response here.
Anon:
As a resident of Ohio, which sends more money to the federal govt than it receives back in federal funding, I am interested to know why Alaska sits on a fund with $35 Billion in assets, pays its citizens a 3 figure dividend from that fund every year, even when the fund has negative earnings in the prior year, yet gets more than double in federal funding what it sends as tax revenue. Why doesn't Alaska use that $35 B to build infrastructure, improve schools, and provide basic services to the villages? Do Alaskans pay federal tax on their permanent fund dividend? I actually find it rather distasteful to learn Alaska is taking federal funding while divvying up $8M among its residents.
My response to Anon:
Anon from Ohio, answering your questions could take up a few whole posts. But just briefly,
1. The US Government owns 60% of the land in Alaska. So a lot of money that comes to Alaska is related to managing your land here in Alaska. This includes a mountain officially named after a favorite son from your state and which your Congress members refuse to allow to be changed back to the name given by the original Alaskans. (The key opponent, Rep. Regula retired in 2009, so maybe there's hope now.)
2. Alaska has a large military presence and a lot of the federal money goes to that.
3. Alaska only became a state in 1959. Ohio has had over 200 years of statehood and federal help to develop necessary infrastructure. We have lots of catching up to do.
Do we deserve all the money we get from the feds? I'm not sure, but there are unique and justifiable reasons why Alaska gets so much federal money.
Why shouldn't we use the permanent fund now? That's a reasonable question. It was set up on the grounds that the oil was not a renewable resource and that one generation of Alaskans shouldn't squander the wealth and leave nothing for future generations. The idea is that when the oil money runs out, there is a fund that has been saved, which the state can tap to help pay for government. I would call that prudent management.
However, many Alaskans have taken the dividend so for granted, that they would oppose allowing the fund to be tapped to run the government. But as oil revenue runs out, the dividends of the fund should be able to pay for a good portion of our expenses. It's like a trust fund for the state.
Don't get me wrong. You're asking legitimate questions, but I'm guessing, Anon in Ohio, if you lived here you would be collecting your annual check and not want to dip into the principal.
and in answer to Anon's question "Do Alaskans pay federal tax on their permanent fund dividend?"
ReplyDeleteYes, we do. Our children do, too. Do your children pay federal income tax?
How much of the PFDs get reinvested into the state? I do things that I can't normally afford, like get my teeth fixed at my LOCAL dentists' office, or buy my kids sports gear at the LOCAL shop or off Craig's List. I make the most of it and almost all of it is spent LOCALLY. The kids' go mostly into collage accounts. I think it's a good investment for the state to let us put the cash into things that we can buy. Of course some go out of state with the money, but those people can afford to spend more here and I don't complain.
ReplyDeleteAnother non-Alaskan weighing in on the permanent fund. If the whole concept is that one generation shouldn’t squander the wealth and leave nothing for the future, then why pay it out so the current generation can buy sports gear?
ReplyDeletePerhaps it’s that some people believe that collective wealth should be spent collectively for the good of everybody. Others believe that collective wealth is a bad thing, and should as soon as possible be divvied up to individuals so they can buy sports gear. One might even identify these two schools of thought as “resembling Democrats” and “resembling Republicans.”
I wonder which school of thought manages to keep something back build up the infrastructure that you admiringly note exists in Ohio. If you really need to catch up on your infrastructure, why not cancel the PFD for a year and catch up already?
Kathy, good questions that I missed when you first commented here.
ReplyDelete1. Sure, there is the divide between those who have a problem with a government trust fund and those who don't, but even that famous anti-socialist ex Governor of ours was a strong supporter of the fund.
2. If sports gear means luxury ski clothes, that might be an issue, but if someone gets soccer shoes and knee pads or a baseball glove or hockey skates for their kid, I think those are important investments in healthy kids.
3. Why not use the dividend to take care of the infrastructure? First, most of the oil income does go into state programs and a certain percentage is reserved for the PF. A small percentage of earnings goes to the dividends. Second, I learned when my kids were little that you could keep them out of something by offering them something else and saying, that's for grownups only. But once they got into that cabinet or turned on the stereo or into one of the other out of bounds areas and discovered it wouldn't kill them, you couldn't keep them out.
The PFD check was supposed to be a way to get Alaskans connected to the oil taxes and revenue so that oil companies wouldn't be able to wheedle big discounts from legislators. But over the years it's now become something that many Alaskans consider our birthright, so it may be difficult to wean us. Perhaps when a state income tax is the only alternative to ending the dividend it might happen.
Also, the original program was much more limited in who got paid and payments were based on longevity in the state. That got overturned as unconstitutional and everyone (who's been in a resident for a year or more) gets the same.
But we do have a pile of money for a rainy day, though not nearly as much as Norway has socked away in much less time.