The PFD amount was announced today to be $1,305. For those who don't know, the Permanent Fund was established from oil royalties but is now invested in a diversified portfolio of mainly stocks. Each year, state residents who have lived here the previous full calendar year get a cut of the royalties, depending on how the portfolio performs over a five-year average. It is generally around $1000 a person, give or take a few hundred, and the IRS takes a cut of it. Emotions run high about it, from long-term residents' anger that new residents get a cut, to Outsiders' sneers at Alaskans' annual "welfare handout." There are also locals who are absolutely livid that a supposed flood of out of state residents move up here every year, just to cash in on the dividend. While all of these emotionally-charged opinions get flung around, I wonder, does anyone really think that about 800 dollars (after the IRS takes its cut) is some sort of windfall? It only just offsets the higher cost of living, if even that. Think about the cost of fuel oil (I just had my 200-gallon tank filled for about $580, and it'll probably last me two winters, but that's sharing my heating load with wood). Higher cost fresh produce, Winter tires in addition to Summer tires, more expensive warm clothes and boots, a higher power bill due to plugging in the car on cold days, etc all eat into that money. Granted, quite a few of these costs (like Winter clothes and Winter tires) amortize over several years, but even being generous and saying you come out ahead by, say, $500, is it reasonable to say that it's a windfall, or a legitimate reason to move over 3000 miles?
In other news, temperatures have now dropped below freezing for real. I dug out my trusty magic hat (comfy for a range of about 80 F degrees), my favorite magic boots (comfy for a range of about 50 F degrees), and a light scarf. I'm now ready for the next month of temperatures!
6 comments:
I've puzzled over this, too. Assuming someone makes 20,000 a year, 1,000 is 1/20th of their income. But assuming a 25% difference in cost of living across the state (generous), that person only has an effective 15k compared to purchasing power in the states. The PFD brings it to, what, 16k before taxes?
COL definitely swallows the Pfd. I've never met anyone who moved here for the pfd - anyone stupid enough to do so obviously quickly realizes the error of their ways.
People don't move there for this tiny dividend, but it is still necessary and reasonable to offer residents this "token" for good will only ...
HI also has higher living costs without having to offer anything to its residents.
The top ten highest cost of living zip codes in the US are all either in that old-money New York-ish region, or in California. Not Alaska or Hawaii. I think the cost of housing still dominates over the cost of shipping consumer goods.
If offering this "token money" to AK residents is not because of AK's higher living costs, then it must be for its harsh environment.
I just read this fantastic article about the 08 salmon harvest and how it impacts the native villages that are just barely clinging on as it is. http://tinyurl.com/ydwmcrl
It's a long article, btw - set aside some time
Surely you'd have to stay for a lot of years to offset the cost of moving, if nothing else?
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