As the universal basic income movement has gained popularity in the US in recent years, interest in Alaska’s Permanent Fund Dividend (PFD) has grown, but so have misperceptions. It’s not a universal basic income, but it is a unique program in America that has become ingrained in Alaskan life.
It started with former Alaskan Gov. Jay Hammond, a Republican. When he was elected governor in 1974, Alaska had only been a state for 15 years, and had used the highest income taxes in the nation to sustain itself. So, when the Trans-Alaska Pipeline System was completed in 1977, oil seemed a savior. But Hammond was wary. He took OPEC cofounder Juan Pablo Pérez Alfonso’s assessment of oil as “the devil’s excrement,” and wanted to work toward “diapering the devil,” as he explained in a treatise of the same name — that is, he didn’t want Alaska to burn out its newfound wealth.
He was going to put a portion of Alaska’s oil profits into a permanent fund, stabilizing the state over the long term, and keep taxes low. A few years later, the state established the independent Alaska Permanent Fund Corporation to manage the funds. The permanent fund is split into a corpus that cannot be touched except through a vote by Alaskans, and an earnings reserve that could be adjusted with a legislative vote. Starting in 1982, the state began sending a portion of the earnings reserve to every registered Alaskan, regardless of age or income, as long as they lived in the state for more than a year and were not a convicted felon.
Alaskans register each year from January to March, the year’s PDF amount is announced in September, and Alaskans typically receive their payments in October. The amount usually ranges from $1,000 to $2,000 per person ( $4,000 to $8,000 for a family of four).
Last year, independent Gov. Bill Walker did not run for re-election, and his hugely unpopular reduction of the dividend amount was a key factor. Republican Gov. Mike Dunleavy is now proposing ways to distribute back payments, and the fight over the Permanent Fund’s future is raging.
Business Insider sent out a request to Alaskan readers asking how they spend their dividends. The following responses we’ve collected are not meant to be representative of the entire state, or illustrate all the ways Alaskans use the PFD. That said, they show that while a family’s PFD is far from a salary replacement, it’s cemented into all types of lifestyles.
INSIDER’s Chloe Miller contributed reporting.