Today is Dividend Day! Well, it’s the first of what’s to become many Dividend Days: today we learned just how much the State of Alaska is going to pay each of its residents profits from interest on oil revenues.
And that amount is… $1281. A flight to Asia. A used car. A wood stove. A credit card payment.
So what is the PFD and how does it work?
Basically, 25% of profit from oil and mineral revenue is invested, and the interest on those investments is averaged over five years and divided between the number of residents who applied and were approved for a payout. Because there’s a five-year average, we haven’t felt the recession as much as you’d expect; last year’s payment was $1305 (though the year before that was a record-breaking $2069).
Before you pack up your van and move to Alaska for that yearly check, there are a couple things to consider. First, you have to be a resident for a full year, meaning that if you arrive on January 2, 2010, you aren’t eligible for that year’s dividend. You’ll need to apply for 2011’s, which means you won’t see any money until October 2012. Second, it’s extremely expensive to live here. Though receiving over $1000 for doing nothing seems ridiculous, consider that we pay more for generic-brand groceries than you do for a similar product at Whole Foods. Gas costs well over $3.50 a gallon, and that’s just in the bigger cities. Move out to the villages and you’re paying well over $5.
Still, the check is a nice little bonus that makes living up here through tough winters a bit more bearable.
[Photo credit: Flickr user yomaninmus]