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Government The Almighty Buck Politics

Alaska: The Only US State Where Everyone Gets Free Money 284

merbs writes: Alaska’s Permanent Fund was established in 1976, in the midst of a black gold rush; the massive Trans-Alaska pipeline was in the process of being built, and the state had reaped $900 million in revenue from the sale of drilling leases in Prudhoe Bay, the largest oil field in North America, in a matter of years. In a matter of a few more, it’d spent it. Alaskans soon recognized that their enormous oil reserves were nonetheless limited, so, with a kind of longterm forward-thinking rarely seen in politics today, they voted to add an amendment to the state constitution to establish a fund that would protect a portion of all incoming oil wealth for future generations. In 2014, the net income of the fund was $6.8 billion dollars and the dividend doled out $1,884 to 640,000 citizens, despite a decline in oil revenues that year.
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Alaska: The Only US State Where Everyone Gets Free Money

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  • by Anonymous Coward on Saturday September 05, 2015 @01:42PM (#50463013)

    And Alaska living isn't easy or cheap.

    • well, gimme a hut with fibre and I am dandy ;)

    • And Alaska living isn't easy or cheap.

      In a previous job, I worked with a few Alaskans who absolutely loved the place. These particular guys lived in houses that didn't have electricity and relied on well water. They loved to go out and trap food. That's not the norm up there, but it does appeal to some folks.

      My wife and I visited Alaska many years ago - it's a very beautiful state. Lots of green, lots of animals, amazing mountains and glaciers... And not so many people. You get to see the Aurora regularly.

      It's hard to read the road signs, thoug

    • by creimer ( 824291 )
      Not necessarily. I had a college roommate who was 1/4 Native American who collected a small check from the Alaskan fund. Never mind that he was born in California, grew up in California, went to college in California, and only saw snow when he went up to Lake Tahoe in California. Not sure if his parents or grandparents came from Alaska. Otherwise, he's 3/4 Irish with the crazy red hair and identifies as being white. I guess that's what you call white privilege these days.
      • by AK Marc ( 707885 )
        No, he didn't. There are other organizations on the planet that pay dividends. Your friend didn't get a check from the Alaskan Permanent Dividend Fund. Most likely he's a member of one of the native corporations that dispenses dividends. Either his parents set him up and he doesn't understand what it is, or you didn't listen very well.
        • by creimer ( 824291 )
          Since he's 1/4 Native American, he probably got his money from one of the native corporations. I doubt the native corporations got their money from operating casinos on the tundra.
          • by AK Marc ( 707885 )
            https://en.wikipedia.org/wiki/... [wikipedia.org] 13 big ones, and hundreds of little ones. As for the 1/4, all the tribes have different rules for membership. I know someone 1/16th native who's not a member of his tribe (and can't even apply), but others in the tribe who are 1/32 or less and are full members. But that's for a non-Alaskan tribe. But the rules are set by the tribes, and vary.
    • Alaska is the closet thing to paradise for those who want to move to a crowded place like Colorado, Montana, Oregon, etc.

      It has lake front property for cheaper than these areas due to excess supply. If you love the city and did not grow up as a kid in the woods or near lakes or enjoy outdoor recreation activities then it may suck for you.'

      This is from a former Alaska resident. It wasn't hard ... my exwife cried and started to loose her mind as she became depressed and hated the outdoors and refused to leave

  • Not free money (Score:5, Insightful)

    by Alomex ( 148003 ) on Saturday September 05, 2015 @02:09PM (#50463123) Homepage

    They are royalties for resources held in the ground which are government property, not free money. Who else has a better claim to it, than the owners of the land, i.e., the people.

    We paid for it when purchased under President Johnson, at the behest of Seward.

    • Re:Not free money (Score:5, Insightful)

      by Punchcardz ( 598335 ) on Saturday September 05, 2015 @02:33PM (#50463211)
      In that case the residents of the other 49 states would like to talk to you about their cut.
      • Or at least the folks that had paid taxes up to the time of the purchase...

      • In that case the residents of the other 49 states would like to talk to you about their cut.

        48 states. Texas also keeps the oil royalties.

      • by Alomex ( 148003 )

        In fact some of them are, but revenues from sale of federal rights are ridiculously low, thanks to lobbying groups. In other words, if you are unhappy complain to your house representative and ask them to increase federal land rights.

      • Hawaii was not part of the US until 1898, so Hawaiians don't deserve any.
  • by Smurf ( 7981 ) on Saturday September 05, 2015 @02:26PM (#50463175)

    In 2014, the net income of the fund was $6.8 billion dollars and the dividend doled out $1,884 to 640,000 citizens, despite a decline in oil revenues that year.

    Cute. The 640,000 citizens received in total $1.2 billion dollars.

    If this had happened in Texas (another state that produces a lot of oil, though in general doesn't have all the natural resources Alaska has), those $1.2 billion would amount to... less than $45 for each of it's 27 million inhabitants.

    Now it doesn't look as cool, does it?

    • by jopsen ( 885607 )

      If this had happened in Texas those $1.2 billion would amount to... less than $45 for each of it's 27 million inhabitants.
      Now it doesn't look as cool, does it?

      True, but using it for infrastructure/schools/etc. and giving a tax reduction might work too...

    • If this had happened in Texas (another state that produces a lot of oil, though in general doesn't have all the natural resources Alaska has), those $1.2 billion would amount to... less than $45 for each of it's 27 million inhabitants.

      Something else Texas doesn't have: a state income tax.

    • by tuxgeek ( 872962 )
      Many invest their children's PFDs to put them through college
      Some piss it all off at walmart, etc ..
      I usually invest mine in my home.
    • If this had happened in Texas (another state that produces a lot of oil, though in general doesn't have all the natural resources Alaska has), those $1.2 billion would amount to... less than $45 for each of it's 27 million inhabitants.

      I think that you're forgetting that Texas produces about 8x as much crude [eia.gov] as Alaska. If they had setup a similar fund we would be talking about at least $400 per year. Not too shabby.

      Now, if either state had followed Norway's lead [wikipedia.org] and kept most of the oil profits for themselves, we would be talking about substantially larger amounts of dividends or savings. Norway's fund is now approaching a trillion dollars in value -- for a country with a population one fifth that of Texas's, and approximately the sam

  • Confessing ignorance, I wonder how Alaska's method compares with what other oil-rich governments have done and with what effect : for example, Norway, or the Canadian province of Alberta.
    • by CanadianMacFan ( 1900244 ) on Saturday September 05, 2015 @04:42PM (#50463753)

      Alberta just put the royalties into general revenue and spent it. Now that the price of oil has collapsed they are facing a huge budget deficit and have nothing to show for it. (Well, some infrastructure may have been built that wouldn't have.)

      Norway placed high royalties on their oil and invested it. I think their fund is the largest sovereign fund in the world. There is a budgetary rule that only 4% of the value of the fund could be taken out in a year to be used in their budget. So far the fund has always grown by more than 4% each year so it looks good for them.

      • by j-beda ( 85386 )

        Alberta just put the royalties into general revenue and spent it. Now that the price of oil has collapsed they are facing a huge budget deficit and have nothing to show for it. (Well, some infrastructure may have been built that wouldn't have.)

        I think the Alberta Heritage Savings Trust Fund has managed to do a bit of good. But it doesn't look like it has been as effective as Norway or Alaska's systems.

        https://en.wikipedia.org/wiki/... [wikipedia.org]

    • by Trepidity ( 597 )

      Some of the revenues in Norway are used to pay for a comprehensive welfare system. The rest goes into a sovereign-wealth fund to save for the future.

    • by tomhath ( 637240 )
      Pennsylvania had a big squabble over the money from Marcellus Shale leases. The legislature wanted to keep most if it as a reserve and spread it over many years, but the governor (Rendell) wanted to piss it all away while he was in office. Thankfully, the legislature mostly won.
  • by swell ( 195815 ) <jabberwock&poetic,com> on Saturday September 05, 2015 @02:47PM (#50463265)

    How can the reader tell when a word is a Proper Noun, Trademarked, etc; or when it is an Ordinary Word? I've complained about this before and some have claimed that the slashdot way is always used by journalists. Well that's not true and here is proof. Slashdot's way is stupid and unconscionable. Look at this summary extracted from today's headlines at Google news. Note the familiar publisher's names and how they handle capitalization in titles:

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  • Of a lower 48 payout of FCC spectrum leases, US forest logging revenue, and mineral royalties.
  • Yes for non_americans reading this they are properly addressed and not called Indians like the rest of the lower 48. Alaskan English at it's finest :-)

    Since we are stealing their land we compensated them for it. That money will greatly help them out where jobs are scarce in the arctic villages and prices and supplies high in cost. During a good year the PFD can be as high as $3,000 a person. If you are a family of 4 in a village on the arctic coast up north that money will buy fuel for the winter and a new

    • The idea of stealing land from nomads is oxymoronic.
    • No, not close. You're confusing the Alaska Native Claims Settlement Act [wikipedia.org] with the Permanent Fund.

      Many, but not all, Alaskan Natives get regular dividends from the various businesses and resources controlled by the native consortia (not tribes). All Alaskan residents get a dividend from the Permanent Fund (unless it has been garnished). Most Native Alaskans get both. For many natives, those two funding sources constitute the majority of their income.

  • The Permanent Fund was originally conceived by Gov. Miller (R) and brought to fruition by Gov. Hammond (R). At the time the state legislature (dominated by Democrats) wanted to keep the money in the general fund where they could decide how it would be spent, but the residents of Alaska preferred the idea of distributing the money.
  • by illtud ( 115152 ) on Saturday September 05, 2015 @06:45PM (#50464317)

    Quick calculation seems that the fund is worth about $70k per head (pop 740k). Not shabby.

    Norway (pop ~5M) has the largest fund in the world, also from oil revenues, which owns an estimated 1% of world equities. That fund value is about $170k per head. It doesn't pay dividends to citizens, rather using the money to pay government pensions (thus saving gov revenue).

    I can't find (from perfunctory searching) historic figures of value (thus growth) for both that I can compare, but it would be interesting to compare the investment return of both, and the management fees.

  • ...who are trying to destroy the petro economy, that will then go away.

    Congrats.

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