The truck that arrived ahead of schedule at Allyssa Canoy’s home in Fairbanks brought enough heating fuel for the frigid winter months ahead — and a surprise bill for $2,600.
Canoy and her two sons have checks arriving that will cover that expense and leave some money for the boys, too. Starting Thursday, Alaska plans to begin distributing to residents their annual dividend derived from the state’s $83 billion oil wealth fund, a sort of bonus that Alaskans get for living in the state.
For some, it’s extra spending money for a new set of tires or a vacation to a sunnier clime during the long, dark winter. For others, it’s a vital supplement in a state where the cost for internet service, gas and groceries can be sky-high.
Here’s what to know about the Alaska Permanent Fund dividend:
This year’s payout is one of the lowest in 20 years
Alaskans are getting $1,000 per person — the lowest amount since 2020, when they each received $992. The payout has been below $1,000 only two other times since 2006.
There used to be a formula for calculating the amount, tied to the fund’s market performance. But lawmakers widely consider that formula unaffordable and within the last decade have abandoned it.
Politicians now set the amount. It’s often one of the last items settled during sensitive budget negotiations. Lawmakers must weigh the check’s size against other programs and public needs, including education, and in 2018 began using earnings from the fund — long used to pay dividends — to also help balance the budget.
This year, $1,000 is what lawmakers argued they could afford while also backing an increase in K-12 funding and trying to limit draws from savings.
Had the old formula been followed, residents would be getting about $3,800 each.
The Alaska Permanent Fund is nearly 50 years old
Voters created the fund in 1976, during the heady, early years of oil in the state. The goal was to save some of Alaska’s mineral wealth. The fund has grown through investments, and while the state constitution protects the fund’s principal, its earnings can be spent.
Dividends have been paid since 1982. Proponents saw them as a way to ensure Alaskans maintained a vested interest in the Alaska Permanent Fund.
More than 600,000 of Alaska’s roughly 740,000 residents are set to receive this year’s check. To qualify, one must meet residency and other requirements.
Three times, including last year, Alaskans received an energy relief payment along with their dividends, according to the state.
Plenty of ways to use the money
For some Alaskans, the check is a nice extra. Some put it into college funds or savings accounts or donate to charities. Others rely on it for necessities, such as heating oil, winter tires or snowmachines, which are critical modes of transportation in rural villages where residents rely on hunting or trapping.
Canoy, a single mom of two, is selling her home and downsizing. She had planned to fill her home’s fuel tank as a gift to the new buyers at closing, but the fuel truck came early while she was away. So instead of putting the $3,000 her family is receiving toward other projects, as she’d hoped, she’s using it to pay that bill. She plans to let her sons spend the remaining $400.
Canoy said she lives comfortably and sees the dividend as a blessing. Still, she wishes lawmakers would find a better way to set the amounts — “at least to just give Alaskans maybe a little peace of mind that, yeah, we’re actually doing everything that we can to make sure that you guys get the most out of the permanent fund dividend.”