ANCHORAGE, Alaska — Nearly all Alaskans received a financial windfall of more than $3,000 on Tuesday, the day the state began doling out payments from the Alaskan Investment Fund that was fueled by money from the oil riches of the state.
The payouts, officially called the Permanent Fund Dividend or the PFD locally, were $2,622 – the highest amount on record. Alaska lawmakers added $662 as a one-time benefit to help residents with high energy costs.
A total of $1.6 billion in direct deposits began hitting bank accounts on Tuesday, and checks will arrive later for those who chose them.
Residents use the money in a variety of ways, from buying big-screen TVs, vehicles or other goods, to using it for vacations, or putting it into savings or funds for studies. In rural Alaska, cash can help offset huge fuel and food costs, like $14 for a 12-pack of sodas, $4 for a bunch of celery, and $3 for a small pot of Greek yogurt. .
“We are experiencing record inflation that we haven’t seen since the first PFD was paid for in 1982,” Gov. Mike Dunleavy said in a video. “Alaskans have borne the brunt of this inflation from the gas pump to the grocery store, and this year’s PFD will provide much-needed relief as we head into winter.”
The timing of the checks couldn’t have come at a better time for those living on the state’s vast west coast, which was devastated last weekend by the remnants of Typhoon Merbok. Damage to homes and infrastructure was widespread along 1,000 miles (1,609 kilometers) of coastline.
Among the most damaged communities is Nome, the largest city on the coast with around 3,500 residents and known for being the finish point of the world’s most famous sled dog race.
Howard Farley, now 90, helped secure Nome as the finish line for the Iditarod more than 50 years ago. His century-old home was sheltered from the storm on Nome Heights, but they lost about 100 feet (30.48 meters) of frontage and a building on the family campsite about 8 kilometers east of town. .
“The beach is much closer,” he said.
He said the payments — which would be more than $16.00 for a family of five — are much needed.
“Even people who haven’t suffered damage, with inflation here, it’s really, really tough,” he said.
Farley said gasoline is $7 a gallon and will remain so until the next delivery arrives next spring because barges cannot deliver once the Bering Sea freezes over.
“The price won’t come down like in Anchorage and other places because you can get deliveries almost anytime,” he said.
“What that will mean for a lot of families is that they can break even with the high prices we are paying,” he said.
The oil wealth check, which some in Alaska consider a right, is usually derived from income from the nest egg investment account. The diversified fund was created when the Trans-Alaska Pipeline was built in the 1970s and is now worth $73.6 billion.
There is an annual application process and residency requirements to qualify for a dividend. Dividends have traditionally been paid using income from the Alaska permanent fund. In 2018, lawmakers began using fund revenue to help pay the government as well, and sought to limit the amount that could be withdrawn from revenue for both purposes. The amount allocated to the dividend this year represents half of the authorized drawdown.
Residents received the first check, $1,000, in 1982. Amounts varied over the years and were traditionally calculated on a five-year moving average to cushion economic downturns.
The smallest check ever was $331 in 1983. The largest before this year’s check was $2,072 in 2015. If someone cashed all the checks since 1982, that would equal $47,049 .
Mildred Jonathan, 74, and her husband, Alfred, 79, live about 100 miles west of the Canadian border in the village of Tanacross in interior Alaska.
There will be no frivolous spending when they receive their paper check in October. Instead, the Jonathans’ main purchase will be firewood.
“The wood I’m hoping to get is $1,600, and it’s a 10-cord load,” she said. “I will survive the winter if I buy this.”
Snow was already falling on the nearby mountains and temperatures in Athabascan Village during the winter are usually well below zero. “It’s cold, cold, cold,” she said.
Any money the couple have left will go towards a new hot water system, flooring in their home and Christmas gifts for their grandchildren, who want new phones.