ANCHORAGE, Alaska (AP) — While the economy continues to recover, the worst of the recession was very much felt by Alaskans on Wednesday who learned their annual check from the state’s oil-wealth fund would be a small one.
Nearly every Alaska resident will receive a check for $900, acting Revenue Commissioner Angela Rodell announced at a ceremony in downtown Anchorage.
The amount of each person’s dividend is based on a five-year rolling average of worldwide investment markets that were hard-hit far outside Alaska. This year, the calculation means the checks were smaller, certainly nowhere near the record payout of $2,069 in 2008.
But hey, it’s still free money just for living in the northernmost state.
The money, about $576 million total, will be distributed Oct. 3. About 507,000 Alaskans will receive the money through direct deposit that day, and another 86,000 checks will be mailed from Juneau for those that didn’t choose to have it put into their bank accounts.
The oldest recipient, Rodell said, is 108 years old, and the youngest was born at 11:59 p.m. Dec. 31.
Most dividends will go, as usual, toward new toys, travel, college savings or paying debts.
In the Inupiat Eskimo village of Deering, tribal administrator Dolores Iyatunguk said her dividend is going toward credit card bills and student loans. In the tiny village 520 miles northwest of Anchorage, the cost of living can be prohibitive, with diesel fuel currently $6.50 a gallon, for example. Iyatunguk isn’t alone in using the money for necessities, although a small gift to herself would be nice.
“I was thinking about getting a winter jacket,” she said. “But that can probably wait.”
The dividends are distributed annually to residents who have lived in Alaska for at least one calendar year. The amount based on a five-year average of the $47 billion Alaska Permanent Fund’s investment earnings, so this year’s average includes 2009, a recession year when the fund posted a $2.5 billion net loss in statutory net income.
Alaska wasn’t as hurt by the recession, but the Permanent Fund Corp. has a diversified portfolio, and it took a beating when markets plunged in the U.S and worldwide.
State officials have said that as long as 2009 is part of the five-year calculation, the amount will be on the lower end. After this year, 2009 will drop from the equation.
Last year’s dividend was $878, the lowest amount since 2005 and the ninth-lowest in the program that began more than three decades ago. The 2011 dividend was $1,174.
The Permanent Fund was established in 1976 after North Slope oil was discovered. The state began distributing money from the fund to residents in 1982.
Alaska has no state income tax, but residents must pay federal taxes on the bounty.
Every year around payout time, many residents are in the market for a new snowmobile, particularly among rural residents looking for a good deal. People have been calling the Polaris and Arctic Cat store in the Anchorage suburb of Eagle River asking what kinds of dividend deals are in the works, employee Doug Bestry said.
For many, the extra money is a way to offset higher prices in Alaska for items such as groceries. For Bestry, the money usually goes toward a splurge, although one year he used his dividend to pay off his pickup truck. Last year, he used it to visit his mother in Arizona, and he’ll probably do that again.
“It’s just fun money for me,” he said.