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Alaskans share oil wealth from fund Original Source Link: (May no longer be active)
http://www.sunherald.com/mld/sunherald/news/breaking_news/6957741.htmhttp://www.sunherald.com/mld/sunherald/news/breaking_news/6957741.htm
Posted on Tue, Oct. 07, 2003
Alaskans Share the Oil Wealth From Fund
MARY PEMBERTON
Associated Press
ANCHORAGE, Alaska - Robert Lague fingered the price tags on the guitars in the pawn shop as he fantasized about what he will do with his check for $1,107.56 in free money.
Lague, a 34-year-old laborer from Chugiak, said that even though he is not working now, he is going to "spend it on junk, on fun stuff, kind of using it as mad money."
In what may seem inconceivable to people in the Lower 48, practically every man, woman and child in Alaska receives a check every year just for living here. The money is from the Alaska Permanent Fund, an oil-royalty investment account created in 1976 after crude was discovered on Alaska's North Slope.
Beginning Wednesday, a total of $663.2 million will be handed out to close to 600,000 Alaskans.
In the days before the checks go out, Alaskans are inundated with offers from businesses competing for the money. Pawn shops offer to cash checks in the hope that people will drop some of their money there. Huge blinking signs advertise PFD (Permanent Fund dividend) specials at car dealerships in Anchorage. Travel companies offer special tours to Mexico and Europe. A clothing store is running a newspaper ad of a buxom blond in black lingerie, encouraging readers to have "some PFD fun."
The first dividend check was issued in 1982. This year's check is hundreds of dollars less than the $1,540.76 paid last year and well below the record-high of $1,963.86 in 2000.
The amount is calculated according to the fund's five-year average return on its stock, bond and real estate investments. And several times this year, the fund was battered so badly by the slump in the stock market that Alaskans were told there might be no dividend at all.
That would put a damper on Alaska's economy, particularly at this time of year when businesses have come to expect the influx of PFD money.
"The distribution has been built into the Alaska economy for quite some time. After 20 years, I'd call it an integral part of the Alaska economy," said Robert Storer, executive director of the Alaska Permanent Fund Corp., which manages the more than $25 billion account.
Every year, lawmakers debate whether the fund should be used to help run state government. Alaska, which has no income tax or statewide sales tax, faces chronic deficits because it relies on oil for about 80 percent of its revenue. At the end of the last fiscal year, the state had a deficit of nearly $400 million.
But the Legislature is restricted by law against touching the fund's principal. And the dividends are all but untouchable politically.
While many urban Alaskans are fantasizing about buying expensive toys, many residents of rural Alaska spend it on essentials, such as home heating fuel and other household bills, hunting gear and gas to operate snowmobiles to go hunting.
"It is really important for people out here, especially those that are subsistence hunters and gatherers. They rely on that money," said Stella Havatone, secretary for the school in Shishmaref, an Inupiat Eskimo village on an island in the Chukchi Sea. "I can't imagine our people without a PFD."
Anchorage Chrysler Dodge was offering used cars for one to five PFD checks. Matthew Tennant, a 28-year-old single father of twin, 2 1/2-year-old girls, bought a 1988 Chevrolet truck for $1,000. Tennant said he has been taking the bus but needs the truck to move his things to a new apartment.
"I'm moving out of the ghetto into a better neighborhood. My kids come first," he said.
As for more frivolous things, Christine Manning, manager of The Look, the store that placed the sexy PFD newspaper ad, said she expects business will be hopping with customers picking up feather boas, vinyl miniskirts, platform shoes and leather corsets.
The checks are smaller this year. But "it is still free money for extra fun stuff," Manning said.
ON THE NET
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