Alaskans Get a Yearly Check, Are Irked That It's Shrinking

State may have to dip into Alaska Permanent Fund's earnings
By Newser Editors and Wire Services
Posted Mar 26, 2018 7:33 AM CDT
In this Monday, Sept. 21, 2015, file photo, student Shania Sommer of Palmer, Alaska, announces that nearly every Alaskan will receive $2,072 from the year's oil dividend check during a news conference...   (AP Photo/Mark Thiessen, File)
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(Newser) – The joke has always been that Alaska is so wealthy it pays its residents to live there. But those yearly checks have gotten smaller and could undergo a massive change as Alaska struggles to pay state troopers and fix roads amid years of low oil prices. After oil started flowing from Alaska's North Slope in the late 1970s, so did the checks, which were eventually paid with earnings from an oil-wealth fund that's grown to about $65 billion through investments. Times were so good, the state in 1980 repealed its personal income tax, a decision that has been politically impossible to undo as the state grapples with a multibillion-dollar budget deficit. Now, with oil revenue unable to sustain the state budget and their options for filling the deficit dwindling, lawmakers may have no choice but to use earnings from the Alaska Permanent Fund to help pay the state's bills, reports the AP.

Over the years, the size of residents' annual checks has varied based on the market's performance, averaging about $1,145. They reached an all-time high of $2,072 in 2015—totaling more than an extra $10,000 for a family of five—before state leaders started contemplating some use of fund earnings for government costs and Gov. Bill Walker limited the payout. Dividends were cut in 2016 to $1,022. Lawmakers agreed to a similarly reduced amount last year. The fund's principal is protected in the state constitution; the checks aren't, and major proposals for using the fund's earnings involve changing how the checks are calculated. Fund earnings, by one estimate, could total around $16 billion by the end of this fiscal year; Alaska faces a deficit of about $2.3 billion. The AP has much more here.
(Read more Alaska stories.)

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