Save It or Spend It ­– Sitkans State PFD Plans

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Category: Local News

Created on Friday, 05 October 2018 00:40

By SHANNON HAUGLAND
Sentinel Staff Writer
    Disbursements of Permanent Fund Dividend checks – for $1,600 each – began today for the more than 600,000 eligible Alaska residents.
    And Sitkans had no end of ideas of how to spend the money – or not.
    This year’s payout is up by 45 percent from last year’s $1,100 to each of the state’s 615,590 eligible residents.
    The state used a five-year rolling average to calculate the fund market value, with a 5.25 percent withdrawal that was divided between PFDs and state operations. The dividend was originally expected to be $2,700 this year, but was decreased under a new formula.
    The state issued 70,452 printed checks and 523,012 direct deposits to residents’ bank accounts.
    Sitka Sen. Bert Stedman said the Permament Fund is a great asset for the state, but says fixes to the system are needed.
    “The great thing about the Permanent Fund is, when you have a finite resource – in this case oil – it saves some of the value for future generations,” he said. “The concern I have with the 5.25 payout is it’s too high and the current generation is using too much of the future value of the fund.”
    He has pre-filed legislation for the upcoming session that would lower the drawdown to 4.5 percent, and divide it 50-50 with a minimum of 50 percent going to dividends. That would have increased the payout this year to $2,000.
    He hopes lawmakers will pass his legislation for a more even split between dividends and government costs.
    “The rest will go for schools, DOT, prisons, cops, general state overhead,” Stedman said.
    Putting earnings into the pockets of residents makes sense, he said, because Alaska is the only state in the U.S. that owns the “subsurface.” In other states, the subsurface is privately owned.
    As to how he’ll spend his own dividend, Stedman said, “I’ll give it to my wife; it goes to pay bills, general bills.”
    Most of the Sitkans who spoke to the Sentinel today said they planned to spend their dividends on every day expenses. One lifelong Alaskan said she will divide her dividend check among charities, including Planned Parenthood.

Wendy Alderson, a full-time resident since 1995: “I am saving my Permanent Fund, I’m saving my husband’s Permanent Fund and I’m saving my daughter’s Permanent Fund, for a rainy day. We haven’t had very many lately but I know we’re due for one.”

Lester Hays, a 6-year resident: “Traveling.”

Patrick Swedeen, resident for 40 years: “I’m using it for our kids schooling; we have a couple of kids getting to college age, that’s the plan.”

Charla Bernhardt, a born and raised Sitkan: said she’ll be paying bills, and paying for food.

Kelsey Marks, a born and raised Sitkan: “I’ll probably use it to start up at UAS, taking classes at UAS.”

Robert Truman, raised in Sitka: “Travel ... to Las Vegas, Phoenix or Hood River, Oregon, and to visit family.”

Spencer Severson, resident since 1981: “Expenses. I have hardly any surplus. I’m impressed with people who are donating their PFDs; I always need it.”

Jamie Jackson, resident since 1980: “I’m spending it on my new house – buying the cabinets.

Ellie Schmidt, who hopes to be eligible for her first PFD next year, said she looks forward to spending her first one on the Alaska Airlines PFD sale. “And probably on rent, so I don’t have to work so much.”

Cliff Richter, a resident since 2004: the family’s PFDs go into savings “before it goes anywhere else ... before we make any decisions.”

Bobbi Jordan, resident for 26 years: “I am paying off my credit card for this month.”