For years there has been talk of ending the Alaska Permanent Fund Dividend by simply offering all qualified residents some sort of large pay-out in the 25K range. While as a lifelong Alaskan resident I have seen very little actual legislation on this suggestion, it is certainly a matter of public debate each year. Personally, while I’d love to get around 150K for my family of six all at once, I would strongly oppose such an action. Why?
Many Alaskans depend on their PFD annually.
It’s hard times everywhere in the U.S. right now, Alaska included. Many residents use their PFDs to survive the long, low-income winters. As they arrive in October, PFDs sometimes offer lifesaving funds to families that would otherwise be cold, hungry, or at the least just have a very, very lame holiday season. The last few years my PFD has gone to clear debt we accrued during the start of the winter when work hours slow down.
Cashing out your investments is never wise.
It would be very tempting for many, especially multi-child families, to resist a big payout to say, payoff their house, but cashing in on your investments is never wise. The permanent fund has grown rather steadily over the years, and has only seen a few bad years. If kept, all residents will receive money, hypothetically, forever, not just right now. Resisting instant gratification pays off in the long run. The PFD is really a resident-gained investment for everyone from the newborn to the elderly. Then, you also have to remember that those same family’s would have to pay federal taxes on that money, which could add up to a big chunk of what was paid in the first place.
It would hurt Alaska’s economy.
First, you have to consider how many residents may move provided with that much money at once. The state could be literally funding a mass exodus. Next, a great deal of that mass pay-out would probably go to debts such as home and auto loans, many of which are not Alaska-based. The money would be flowing out of Alaska. Finally, the yearly income to residents also means yearly income to businesses. While of course some of the yearly money probably still goes out of state, some is used in state and provides a boost to businesses in the slow season.
As stated, currently there is no active, public legislation to offer a pay-out and elimination of the Alaska PFD, though every year there is often action to “cut-in” to the profits so to speak for state funding of something. This Alaskan will continue to support the to preservation of the fund for the people of our state, whether it means no big pay check in my pocket or not.