Friday, September 12, 2008

Thanks, State of Alaska!

This morning, all qualified residents will find an extra $3269 in their bank accounts for those that chose direct deposit.

$2069 comes from the Alaska Permanent Dividend Fund. I appluad those farsighted politicians who created the fund back in the 70s. Origainlly started as a rainy day fund, it is now enshrined here. We say, you may not touch our PFDs, not ever ;) The fund grows tremendously each year, thanks in large part to its investment strategies and some judicious participation in individual projects/stocks. The amount is calculated based on the previous five years earnings (I think with a portion set aside for inflation proofing) and distributed to qualified residents anually. Usually, this takes place in mid October and it fuels an amazing boost to the economy.

Not too long ago, the PFD was in the $1100 range...the growth is from gains made as the markets ramped up just prior to the correction recently. The PFD allows people to buy houses, purchase better vehicles, pay off debts and of course, some just blow it partying or buying luxuries they have long coveted. For myself, I have always used the PFD to stock up the house for the coming winter and pay ahead on the heating oil bill. Some years, I managed something small for myself, such as new clothing-or, it helped with Christmas shopping. I am sure many people are the same, but lots will buy motorized toys and games and big screen TVs and you will not find me within a half mile of ANY store today, lol!! It will be a zoo and I have sympathy for retail employees and the tellers at the bank who will be swamped.

The additional $1200 comes from an appropriation from the legislature this year. It is in direct response to the crippling cost of energy here in Alaska. In some areas, diesel for heat is $7 a gallon, or more. For people living in Bush Alaska, this is a godsend...there is also relief at the pumps, when the state tax of eight cents a gallon rolled back the first of the month.

Of course, gas is still over $4 a gallon ($4.19) and diesel is outrageous at $4.87 a gallon. I know when we topped our heating oil tank, the bill was stupendous and I can't imagine using 150 gallons a month in the winter at $4.69 each. Very scary. Naturally, the local gas utility has applied for another increase also, 22 percent. The commission that oversees that has never seen a rate request they didn't approve, so that totals something like 70% in a year and a half for those on gas heat.

For us, I am not sure what we are doing with the extra money, aside from sticking some away for the taxes we'll owe on the additional income. We have one major project to do-get this house converted to NG, which is going to be a large expense based on the system we have now. And of course, make a hefty payment to the heating oil distributor ;)

1 comment:

Unknown said...

Oh, how I hate depending on the PFD to cover my butt....but that is what is does.
First off, bought enough heating oil for the winter (ouch!).
Second, hay, but not quite enough for the winter though.
Third, taxes, I went ahead and paid the government their share, bleh.
PFD now gone.
Was quick and somewhat painful.