Valley poised for PFDs

By TRACY KALYTIAK

For the Frontiersman

A total of $113,213,499 will begin flowing into the economy of the Mat-Su Borough in two weeks, when the state begins sending out this year’s Alaska Permanent Fund Dividend checks.

The first of this year’s PFD checks will be direct-deposited into bank accounts throughout the state on Oct. 7. Every man, woman and child who successfully applied and qualified for the PFD will receive $1,281. Approximately 88,379 of those people live in the Mat-Su Borough, according to U.S. Census Bureau statistics.

“It’s a big chunk of dough,” said Neal Fried, senior economist with the Alaska Department of Labor and Workforce Development. “It’s larger than a lot of payrolls.”

This year’s PFD disbursement to the Valley is only about $8 million less than the $121 million total payroll last year for all local government entities combined, including schools, the cities of Wasilla, Palmer and Houston and the Mat-Su Borough.

However, the total PFD payout in the Valley this year exceeds last year’s $92 million total payroll for retail jobs in the Valley, as well as the $90 million total construction payroll in the Valley last year.

Statewide, the PFD will contribute $821.9 million to the state’s economy, Fried said. The annual dividend is paid from investment earnings from the state’s $35.7 billion savings account. Market performance affects the size of the payout. The amount of investment earnings allocated to dividends is based on a five-year rolling average of permanent fund performance, according to information from the Alaska Department of Revenue.

Fried believes more PFD money is staying in the Valley compared to 10 years ago.

“Before, a big chunk was spent in Anchorage,” he said. “The amount spent by Valley residents in the Valley increases every year because there’s a much broader service sector there than there used to be. There is retail, restaurants, but it goes way beyond that. There is health care, entertainment, specialized services, housing. Those options are much broader now, which means more of the PFDs stay there.”

There have been other shifts in the way people handle their PFDs, Fried said.

“The way we spend it over time changes,” he said. “For the first number of years we really saw it as a windfall, it came to us. Now, we treat the windfalls as regular income. It’s a loaded question when you ask people what they’ll do with the PFD; there’s a lot of emotion tied up in the PFD. People don’t want to seem frivolous even though they might be.”

Valley residents who responded to a Frontiersman Facebook inquiry about the PFD say they are still spending their dividend on things like vacations, but some are balancing their spending with frugality.

“I have always put my PFD in savings since I was 18,” said Molly Hawkins, 22, a Palmer resident. “It’s helped with bills and shopping trips, but I am saving for a trip to Costa Rica.”

Erin Lea Cross is using part of her PFD as spending money on vacation, putting part into savings and using the rest for “essentials like filling the freezer with meat for the winter, pre-winter tune-ups for cars,” she said.

Saving money, paying bills, paying off credit cards and taking care of tax payments top the list for some Valley residents’ PFD plans.

Shirley R. Novak plans to use her PFD on something profoundly practical: “Fuel oil to stay warm.”

Sylvia Inman plans to “pay some bills; buy things put on hold due to shortage of funds; maybe buy ahead a little for the big holiday coming up; and paying ahead on some bills.”

Rebecca Mshar-Oprish said she will be “either paying off my credit card or buying new tires for my car.”

“I’ll probably split it and do both.”