JUNEAU Alaska (Reuters) - Nearly every Alaska resident will soon be $1,884 richer, thanks to an annual payout from an oil wealth trust fund that has been credited with keeping many low-income families out of poverty, state officials said on Wednesday.
More than 640,000 Alaska residents will receive the payment from The Alaska Permanent Fund next month, which Department of Revenue Commissioner Angela Rodell says is the third largest since the state began paying such sums in 1982 with a $1,000 check.
The sum is more than twice the $900 paid to each Alaska resident last year and more than the collective payments from each of the last two years. But it is still off from a high of $2,069 paid in 2008.
Alaska’s Permanent Fund was established by a constitutional amendment passed by voters in 1976 requiring a portion of state oil revenues be put into a savings account to be available for the distant future, when North Slope oil fields are tapped out.
The annual direct payout to citizens, derived from a formula averaging the Permanent Fund earnings over a five-year period, is unique to Alaska, even though other jurisdictions have resource wealth funds.
This year’s boost comes in part from dropping the dismal recession-driven 2009 figures from payment calculations. That fiscal year, the fund closed with a $29.9 billion balance, compared to $51.2 billion on June 30 of this year.
Alaska residents must live in the state an entire calendar year before becoming eligible. Governor Sean Parnell said the oldest applicant was 109 years old while the youngest were infants.
The dividend remains an important perk of Alaska residency and a major economic force, used for college and retirement savings, big-ticket purchases, vacations and bill-paying.
Economists have credited it for keeping many low-income families out of poverty. The annual announcement typically gets set against the backdrop of retailers promoting discounts, often on big-ticket items like electronics, furniture, cars and air travel.
Parnell said he and his wife, Sandy, will likely put their checks toward their youngest daughter’s college tuition.
“Unfortunately it’s not going to be something new from a retail store here,” Parnell said. “I hope many Alaskans will avail themselves of that opportunity.”
Editing by Cynthia Johnston and Jim Loney