Alaska residents cash in on annual dividend

updated 5:34 p.m. ET Sept. 5, 2008

ANCHORAGE, Alaska - It's the season for Alaskans to be rewarded just for living here and this year's take is extra sweet: $3,269, a record share of the state's oil wealth combined with a special cash payout to help with stratospheric energy prices.

Lt. Gov. Sean Parnell announced Friday that every eligible man, woman and child will receive $2,069, thanks to dividend payments from the state's oil royalty investment program distributed annually. On top of that, the checks will include another $1,200 from the state treasury to help offset soaring fuel prices.

The one-time energy boost was proposed by Gov. Sarah Palin and approved by state lawmakers last month. Palin has since been tapped as the running mate of Republican presidential hopeful John McCain.

"The royalty dollars that flow through the state are the people's wealth," said Parnell. "The $1,200 resource rebate goes to that philosophy."

People must live in Alaska one calendar year to qualify for the payout. For residents in Alaska's rural communities, the money can't arrive at a more crucial time.

Filling up the tanks
"When it gets real cold in winter, it can take five gallons of fuel for heating overnight," said Wanda Sue Page, who lives in the Arctic village of Noatak, where residents pay more than $9 for a gallon of gasoline and nearly $10 for a gallon of heating oil.

"I'm going to fill my 52-gallon tank up to the top and put the heat up real high," Page said. "And when it gets empty, I'm going to fill it again."

Sam Shields, who lives in the Kuskokwim River town of Bethel, also is among the 610,768 people who are receiving the dividend this year. The state's estimated population is just under 680,000 people.

Shields said the money is desperately needed in his community, where he recently saw a whole chicken selling for $23 at the local grocery store. Gasoline is going for almost $6 a gallon, but that price is expected to reach the $8 mark when the last barge of the season delivers its load of fuel.

To make ends meet, Shields and other residents are relying more on subsistence foods like moose and caribou meat, salmon and berries. The state payout is already spoken for, he said, destined to pay for fuel, bills and a new wood-burning stove that should cut down on his heating costs.

"Everyone around here was happy to hear how much we're getting," he said. "Mainly everybody here is saying they're going to use it on fuel."

Dividend payments
The fund was established in 1976 after North Slope oil was discovered. Including the upcoming dividends, the fund has since yielded $16.5 billion to Alaskans since the first payout of $1,000 in 1982, according to the state Revenue Department. That's not counting the energy relief money, which alone totals $730 million.

Before this year's bounty, dividend payments ranged from $331 to $1,963 in 2000. Last year's dividend payout was $1,654.

The fund is valued at almost $36 billion, with total returns at a minus-3.6 percent in the fiscal year ending June 30. The poor global economy is blamed for the reduction of the fund's value, according to acting Revenue Commissioner Jerry Burnett.

Dividend amounts have no direct link to oil prices or the fund's value. Oil prices, which sank below $106 a barrel Friday, can boost the fund's principal, but the money must be invested.

Payouts are calculated on a five-year average of investment income from bonds, stock dividends and sales, and other investments.

Direct deposit of the dividends is scheduled earlier than usual this year, Sept. 12, for more than 493,000 people. Paper checks for recipients who want them will be mailed out, starting Sept. 30.

If residents have received a payment every year since the first was issued, their total take in the program would be $29,605. That does not include the energy relief amount.

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