Importance of Permanent Fund for Posterity Emphasized
September 21, 2015
(SitNews) - Alaska Governor Bill Walker and Lt. Governor Byron Mallott Monday morning underscored the importance of a stable fiscal future for future generations of Alaskans, as they broke from tradition in announcing the amount of individual Alaskans’ permanent fund dividend check. Shania Sommer, a seventh-grader from Palmer Junior Middle School, announced the exact amount of the check. Shania is a 12-year-old student enrolled in the Alaska Native Science and Engineering Program.
34th Dividend is $2072; Shania Sommer reveals the 2015 PFD amount Monday morning...
Photograph courtesy Office of the Governor
“A month ago, I asked Shania to participate in this historic announcement because I want to send a message,” Governor Bill Walker said. “This is the largest permanent fund dividend payout in Alaska history. We are paying out more in PFD checks than we are for the education of young Alaskans like Shania—at a time when we are struggling with a $3.5 billion deficit. Alaskans need to know this is unsustainable. I’m confident Alaskans will pull together to find a solution, as we always do when times are tough.”
“For the past two summers, I participated in the Alaska Native Science and Engineering Middle School Academy,” said Shania Sommer. “ANSEP has gotten me even more interested in school, and my career goals are to become a civil engineer or an Alaska State Trooper. I have been saving my Alaska Permanent Fund Dividend to help pay for my college education, so I am excited to help reveal the amount of the 2015 PFD.”
Beginning October 1, more than 644,000 Alaskans will each receive $2,072, the largest PFD payout in state history. The State of Alaska will pay $1.33 billion in PFD checks, which exceeds the $1.3 billion spent for education this year. 84% of all applicants will be paid by direct deposit the morning of October 1st and 85,142 checks are estimated to be in the mail at the same time.
This is the 34th Dividend issued to Alaskans since the first checks for $1000 were mailed in 1982. Those first checks were for years 1980-1982. For any stalwart Alaskan who was paid every divident since the program began, they will have received $39,099.31 once the 2015 dividend is issued.
The oldest 2015 PFD applicant is currently 109 ears of age, and the youngest applicants are 25 babies that were born on December 31st, 2014, before the qualifying deadline.
“From the very beginning, almost all who supported and those who created and shaped the Permanent Fund believed that the Fund’s basic purpose was to help replace one-time oil wealth with renewable and growing financial wealth to meet state needs,” said Lt. Governor Mallott, who served as a Permanent Fund Corporation trustee (1982 – 1990) and executive director (1995 – 2000).
Also on hand for the announcement was Eric Wohlforth, former Department of Revenue Commissioner (1970 – 1972) and one of the longest serving member of the Alaska Permanent Fund Corporation Board of Trustees (1995 – 2006).
“The original purpose of the Permanent Fund was to save wealth for future generations of Alaskans,” said Eric Wohlforth. “This is the people’s fund. In the months before the legislative session, groups will meet to talk about how we should manage our wealth. I urge all Alaskans to become informed investors, for their sake and for the sake of the next generation.”
To date, the Alaska Permanent Fund is worth over $51..4 billion. Since 1982, just over $23.3 billion has been distributed to Alaskans through PFD checks. Governor Walker noted the irony of this year’s large dividend payout at a time when the state is facing its largest budget gap ever.
“Across Alaska, we are laying off school teachers, cutting trooper posts, and scaling back services provided by the state,” said Governor Walker. “It is time to have an open and honest conversation about our finances, and how resources like the Permanent Fund can be used as an asset. The vision of the Permanent Fund was to turn a nonrenewable resource into a renewable one, and it is our job to determine how to best use and protect that gift for the benefit of all Alaskans.”
Established in 1976 by constitutional amendment, the Alaska Permanent Fund sets aside at least 25 percent of all the state’s mineral royalties and lease payments, and is invested as an income-producing asset for the state—which is set aside in an earnings reserve account. Each year, a dividend is distributed from that account based on the average income of the fund over the previous five years. Income in the earnings reserve account is also available for legislative appropriation.
“We are fortunate that our predecessors had the foresight and wisdom to set aside Alaska’s oil wealth for the benefit of future generations,” Lt. Governor Mallott said. “It is now our responsibility to apply that same wisdom to the financial decisions we face today so our children and grandchildren can also live in a prosperous Alaska.”
Members of the Alaska Senate Majority commended Governor Bill Walker for cautioning against associating this year’s large $2,072 Permanent Fund Dividend (PFD) amount with an improvement in the state’s financial situation.
“Our state is facing an unprecedented budget shortfall of almost $4 billion,” said Senator Anna MacKinnon (R-Eagle River). “While we certainly all look forward to the extra income, it’s important to emphasize that this year’s PFD amount in no way mirrors the state’s fiscal reality and I commend the governor for doing so.”
“Winter is coming so I would encourage Alaskans to use their dividends well,” said Senator Pete Kelly (R-Fairbanks). “In the Legislature we will work to make Alaska’s economy a powerhouse again.”
At current rates of spending and projected revenue, the state is expected to run out of savings outside the Permanent Fund by fiscal year 2018.
“It was encouraging to see the governor highlight the state’s tremendous financial problem at today’s PFD announcement,” said Senate President Kevin Meyer (R-Anchorage). “The Senate will be working overtime with the administration in the upcoming session to reduce government spending and build a sustainable budget.”
The current price of oil is roughly $47 per barrel and isn’t expected to increase in the near future.
The 2015 PFD payment is based on a five-year average of earnings in the stock market as well as several other factors, and doesn’t accurately reflect the state’s current budget woes.
Edited by Mary Kauffman, SitNews
Source of News:
Office of Governor Bill Walker
Alaska Senate Majority
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