PFDs, Baby!!!

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I’ve been a little under the weather over the weekend, not to mention the workout I had Friday was killer, and it hasn’t stopped raining (or feels like it hasn’t stopped raining) for forever.  But a subject came up in a funny way that I thought maybe good to clear up.  That’s the PFD, or better known as the dividends the state pays Alaskan Residents just to live in Alaska.  It’s topical because checks arrived in the mail this week (so i heard) and I am getting a kick out of the reaction.

PFD stands for Permanent Fund Dividend.  Officially, it is a cash dividend disbursement based on 5-year income earned by the Alaskan Permanent Fund Corporation (APFC).  APFC is actually a private company, but is wholly state owned.  It takes funds gained from a percentage of state income (not completely, but dang near almost, from the licensing and taxing of oil fields), invests them like any other financial holding company would do, then writes a check annually to the citizens of Alaska.

Alaska first tried to do this on its own in the 1970s when Prudhoe Bay (the big oil fields that pay my paychecks) but struggled with separating politics from business.  The whole purpose of the fund is tied back to that “P” word … Permanent.  From day one, politicians realized that the oil is going to run out – not right away, but someday.  They didn’t want to tap the land of its resources and leave generations in the future unsupported.  So the fund was created to establish a means to continue to pay back to the citizens of Alaska as long as there is an Alaska.  Proof of this as well is in the “D” … its a Dividend, not a random paycheck.  Citizens are paid an amount that is based on how much income the fund made, so as long as the fund makes money people get money … but the fund has to make money.  I guess the other proof in this is that the fund currently sits at 42 Trillion dollars too.

As it turns out, I didn’t get a check, and I won’t next year either.  You have to be a resident for a full calendar year.  By that rule, I won’t have lived here for a year until January 1st, 2014.  Sucks a little, but the rule is the rule.  The actual payout isn’t that bad either; its based on an accumulated income over the last 5 years, so with the booms of 08 and 09 dropping off, the dividend is as long as its been in a long while — just over $800 — and it has been as high as over $2000 not too long ago.  They don’t post the amount until just prior to writing the checks, but folks can pretty much depend on a good number on or around the beginning of October.

Because let’s face it, you don’t have to be from Alaska to know what happens when everyone has a whole bunch of money in their pocket all of a sudden.  That’s right … they spend it!

For one thing, I am probably going to take advantage of the “PFD sales”.  Many electronic stores are quoting lower prices, and I am likely to find a good deal on tires.  Car Dealerships are flooding the commercials (though I am happy with the RAV4 for now), and people are pushing PFDs for Christmas layaways.

But for this outsider trying to find a way to overcome the wet weather blues, I have to admit it was the reaction in the bar on Friday.  The place was packed and folks were having a great time.  As I was nudging a fairly cute girl who was three sheets to the wind (plus a few more for safekeeping) what the occasion was, her response in a whooping, drink spilling, high tone screech was a simple “F*ing PFDs, Baby!!! I LOVE THIS STATE.”

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