Does the Alaskan Government Pay People $1200 to Live There?
Yes, the Alaskan government indeed pays eligible residents a yearly cash dividend through the Permanent Fund Dividend (PFD) program. This dividend, which can be around $1200 or more, varies based on the state's oil revenue and other factors. The PFD is funded by the Alaska Permanent Fund, which is designed to manage the state's oil wealth. However, as we'll explore in this article, the future of this generous program is uncertain.
Eligibility and Application
To qualify for the PFD, residents must meet specific residency requirements and apply for the dividend each year. Once the application is approved, it typically takes about a year before the dividend is received. Those who have made the application process can attest to the thorough investigation that first-time applicants undergo to prevent fraud. Penalties for fraud can be severe, including bans on future dividends. Experienced residents often take legal action against those found guilty of fraud.
Value and Comparison
Once you've been living in Alaska for a couple of years, the PFD is often comparable to the average income tax refund—one way to think about the dividend is that it roughly equalizes the higher cost of heating your home in Alaska compared to other regions of the country. With financial woes continually growing, the future of the PFD looks uncertain, with the state legislature moving towards prioritizing the fund for budget items before allocating funds to dividends for residents.
The Scale and Future of the Permanent Fund
The Alaska Permanent Fund is currently a massive fund with over $60 billion in funds. In 2019, the PFD payout was a substantial $1600. However, the current trend indicates a shift in how the fund is utilized, with legislative efforts aimed at first using the fund for budget items and only then distributing smaller amounts to residents. This change suggests that future recipients may see a reduction in their PFD payouts or no payouts at all.
Understanding the Permanent Fund Dividend
For those interested in more details about the Permanent Fund Dividend, the following resources offer comprehensive insights.
For a detailed look at the workings of the Alaska Permanent Fund, visit Alaska’s official website.
For a beginner-friendly guide to the Permanent Fund, check out Permanent Fund 101: The Basics - How the Perm Fund Works.
Whether you're a new resident or a seasoned Alaskan, understanding the PFD and its current status is crucial for managing your financial expectations and planning your future in the state.