ANCHORAGE, Alaska — Almost every Alaskan will be $1,106.96 richer this year, thanks to dividend checks from the state's oil royalty investment program distributed annually to eligible residents just for living here.
Gov. Frank Murkowski on Wednesday night announced the amount of the checks, which end a five-year slide in dividend amounts from the Alaska Permanent Fund, established in 1976 after North Slope oil was discovered. Dividends have been paid since 1982, ranging from $331.29 to a record high of $1,963.86 in 2000.
Steve Meads is among the 602,350 Alaska men, women and children waiting for the money to begin flowing in October. The 62-year-old Anchorage hotel doorman said his check is already spoken for.
"I'm going to spend it on a new set of teeth," he said. "I need a partial rebuild and I don't have dental insurance. Without this money, I'd be out of a job because I have to smile so much."
When dividend season hits, so do advertisements trying to get Alaskans to spend their dividend checks on their next car, their next home, their next vacation. Many people take advantage of special dividend deals.
But in the northwestern coastal village of Point Hope, 125 miles north of the Arctic Circle, Molly Stone's family is using the money to catch up on utility bills and an account at the village store as well as other necessities. Some large families pool dividend checks to buy big ticket items, she said.
"It's pretty hard to stay afloat around here, except for people with lots of kids. Then they can get a vehicle or take a trip," said Stone, city clerk in the community of 700. "I might buy myself a new outfit, but we really need a new alternator for our car. We have to jump-start it every day. And if there's enough left over, we could use a new windshield."
Payout based on fund amount
Counting the upcoming dividends, the fund has yielded $14.2 billion to Alaskans since the first payout of $1,000. Anyone who has lived in Alaska for a full calendar year can apply for the money.
Despite an increase in this year's checks, dividends are nowhere near their peak, even though the fund is valued at a near-record $34.5 billion, with total returns at 11 percent in the fiscal year ending June 30.
But dividend amounts have nothing to do directly with the total value of the fund and nothing to do with still robust oil prices, either, said fund spokeswoman Laura Achee. Oil prices can boost the fund's principal, but the money must be invested.
Payouts are calculated on a five-year average of investment income from bonds, stock dividends and sales, and other investments.
"In 2002 and 2003, those were very low income years for the fund and those years are still part of this five-year average," Achee said.
Direct deposit of the dividends is scheduled for Oct. 4 for about 259,000 people who signed up online in January and Oct. 19 for approximately 218,000 people who signed up later. Recipients who want paper checks will start receiving those in mid-November, according to the state Department of Revenue.