The third year that the Permanent Fund dividend was issued, 1984, it was the lowest in history at $331.29.
If this year’s dividend was to match that smallest dividend in history, factoring in inflation, it would be $872 today.
The $525 dividend that is in the 2022 budget for eligible Alaskans is only worth $195 in 1983 dollars, also because of the effect of inflation.
That makes it by far the smallest dividend in the history of the fund, at a time when the fund is nearing $82 billion, the largest balance in history, an account that is far greater than the gross domestic product of Luxembourg ($72 billion).
It amounts to $1.43 a day for each eligible Alaskan, not enough to be helpful to private sector workers who have been bludgeoned by the pandemic policies of 2020-2021.
The reason the $525 was established for this year’s dividend check is because the rest of the dividend was used as a hostage against the Legislature’s fiscal hawks to force them to vote for budget items they disagree with, or lose more than half of the possible $1,100 dividend.
It was a carrot and stick approach to get them to vote for something less than what is guaranteed by Alaska Statute.
According to Alaska Statute, the lawful calculation of the dividend is based on a five-year average of the Permanent Fund’s performance. It varies depending on the stock market and other factors. Alaska Statute mandates that the dividend is calculated through this method:
- Add fund statutory net income from the current plus the previous four fiscal years.
- Multiply by 21%
- Divide by 2
- Subtract prior year obligations, expenses, and PFD program operations
- Divide by the number of eligible applicants
If that formula was followed, this year’s dividend would be over $3,000. But since the Gov. Bill Walker era, Alaska Statute has been ignored, and now it’s the “leftover dividend.”
The highest dividend awarded was $2,072 in 2015.
Then-Gov. Bill Walker vetoed half of the 2016 dividend and allowed $1,022 to be remitted to Alaskans for their share of the oil wealth.
Once the statutory calculation was abandoned, all bets were off as the dividend became not a calculation, but a calculated way to leverage other budget items through the legislative process.