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Alaska residents receive $1,654 each from oil investment fund
JUNEAU, Alaska -- Nearly every Alaskan will soon be receiving a check for $1,654, their share of the state's oil riches, Gov. Sarah Palin announced Wednesday.
The dividend checks are derived from the state's oil royalty investment program and distributed each year to eligible residents -- just for living here one full calendar year.
"Oh, baby!" Palin said as she announced this year's dividend at the Valdez Convention and Civic Center.
Slightly more than 600,000 men, women and children in 248 communities will receive the dividend this year, according to the Revenue Department. The state's estimated population is just more than 670,000 people.
Anyone who has lived in Alaska for a full calendar year can apply for the money -- including children.
Of those receiving checks this year, about 41 percent -- or 244,695 of the state's residents -- were born in Alaska.
It's a perk that separates Alaska from the rest of the country and was recently parodied in "The Simpsons Movie," which prominently features the television cartoon family's journey to Alaska.
The movie depicts Alaska almost as a separate country. As Homer Simpson crosses the border with Canada, he's greeted by a customs agent who says, "Welcome to Alaska," then hands Homer a wad of cash, saying every Alaskan gets a stack of bills so oil companies can exploit the environment.
But for many residents, the check is no joke.
It means getting caught up on bills and supplementing income that for some is a week-to-week living in Alaska, where the cost of living is high in part because of its distance from shipping centers in the Lower 48. In Galena, a town of 600 residents located 250 miles west of Fairbanks, air taxi pilot Colin Brown said the money will help cover rising fuel costs that have beset the state's isolated rural villages.
Brown says he pays about $4.70 for a gallon of gasoline, about $2 per gallon more than national average, according to the Energy Department's most recent data.
Others use the bonus to supplement their subsistence lifestyles.
"A lot of times village people will spend it on fishnets to renew their equipment that's worn out," he said.
Brown added that struggles to cover energy costs are not restricted to those living on part-time wages or government entitlement programs.
"It's a day-to-day, month-to-month thing trying to keep up and get the funds to pay the bills," Brown said. "The dividend makes it possible to continue to live out here in the Bush."
Cynthia Dau, a framer for Gallery of the North in Juneau, said she and her husband Michael will use the money for a long-awaited holiday trip to Hawaii.
But the Daus didn't always have that option when the dividend checks were first being issued to Alaskans more than two decades ago. It was essential to the couple when raising two daughters.
"Back when it first came out, it was used for diapers and food," Cynthia Dau said. "When they got older, it went into the bank for college. It gave you a little bit of breathing room."
The state established the Alaska Permanent Fund in 1976 after North Slope oil was discovered. Dividends have been paid since 1982, ranging from $331 to a record high of $1,963 in 2000. Last year's dividend check was $1,106.
The fund is valued at a near-record $38.7 billion, with total returns at 17.1 percent in the fiscal year ended June 30. In the last fiscal year, the fund earned $622,000 an hour.
Dividend totals are not directly tied to the fund's total value or with robust oil prices, said fund spokeswoman Laura Achee.
Oil prices, which topped $80 a barrel this week, can boost the fund's principal, but the money must be invested.
Payouts then get calculated on a five-year average of investment income from bond interest, stock dividends, asset sales, plus other investments.
Familiar stock investments include high-profile brands such as Pepsi, Microsoft and Apple. Also among the fund's top 50 stocks are North Slope oil producers Exxon Mobil Corp., ConocoPhillips and BP PLC.
Direct deposit of this year's dividend is scheduled for Oct. 3 for those who applied online in January. The next payout will be an Oct. 17 direct deposit for those who applied online later.
The Revenue Department will begin mailing paper checks on Nov. 13 for those who chose that option.
If a resident has received a check every year since the first was issued in 1982, their total take in the program would be $27,536.