People in the “Lower 48 (or 49)” who have never lived in Alaska are unde the impression that Alaskans get “free money” just for living here. And, they are right! But, don’t ever say that in front of most Alaskans. You will be called all sorts of names! So, if you can’t call it “free money” what would you call it? First, let’s explore what the Permanent Fund Dividend (PFD) is:
According to Wikipedia, a brief overview of it says: The Alaska Permanent Fund is a constitutionally established permanent fund managed by a state-owned corporation, the Alaska Permanent Fund Corporation (APFC)…. Shortly after the oil from Alaska’s North Slope began flowing to market through the Trans-Alaska Pipeline System, the Permanent Fund was created by an amendment to the Alaska Constitution. It was designed to be an investment where at least 25% of the oil money would be put into a dedicated fund for future generations, who would no longer have oil as a resource…. The Corporation is to manage for maximum prudent return, and not — as some Alaskans at first wanted — as a development bank for in-state projects. The Fund grew from an initial investment of $734,000 in 1977 to approximately $53.7 billion as of July 9, 2015.
So, as it states, the PFD was essentially a way of “buying out” all present and future Alaskan land owner rights to oil found in the state. That also means that EVERY eligible Alaskan receives this payment every year, whether they own land or not. The payment amount has ranged from around $330 to as much as $3,200 (with a special payment added thanks to Sarah Palin).
This sounds like a socialist benefit to me. Of course, I support it 100%!! But, when I posted on Facebook stating that the PFD was a socialist benefit, you can imagine the types of responses I received from the people of a REALLY Red State. It is interesting the differing opinions that surfaced.
In another question I posed to this group — with regard to an investment made by the Alaska Permanent Fund Corporation in an out-of-state seed company — I asked if they would have rather seen the money spent:
- On a higher PFD that year
- Local, year-round farms as an investment in the future
- The investment in the seed company
Even though there were only a few responses, you can see there is a close divide between investing that $100m in a cash payout to the people and improving food security for Alaskans. Now, consider this: In 2016, the PFD total payment to the people was $651,529,880.18. So, if there was an extra $100m added to that, the max benefit for each person who received a PFD that year would have been about $156. Believe me, that is chump change up here. BUT, if the corporation had invested in the local farms for year-round production, the amount saved by Alaskans on fresh produce at the store and create an surplus supply that could have been EXPORTED from the state. Exports are something this state severely lacks.
I could not find details of the investment with the seed company that the money actually went to. So, I can not speak to the matter of whether or not the investment in the out-of-state seed engineering company is a more sound financial move for the state’s economy. But, I can assure you that the trickle-down effect of spending $100m to create indoor farms will increase the state’s prosperity both directly and indirectly. From savings on healthcare costs due to better access to fresh food all the way to the aforementioned export potential, it should be the next diversification move the state makes. And, the SOONER, the BETTER!