PFD cuts felt hardest in the bush
While a lawsuit has been filed and a bill introduced to restore the full amount of the Permanent Fund Dividend, rural Alaskans in Nome and the region try to deal with the impact of half a PFD on the local economy.
For many residents in Alaska’s bush, the annual permanent fund dividend pays for many necessities, like heating oil or winter clothing. It may be too early to tell how the cuts will affect local businesses, but it is clear that the Governor’s decision to cap the PFD at $1,022 per person, or half the expected amount, means a loss for many local families.
The Alaskan Permanent Fund was established in 1976 by constitutional amendment. The amendment states, “At least 25 percent of all mineral lease rentals, royalties, royalty sales proceeds, federal mineral revenue-sharing payments and bonuses received by the state be placed in a permanent fund, the principal of which may only be used for income-producing investments.” Of the fund, the principal is not spendable, while the earnings reserve may be used for any public purpose. Since 1982, the majority of the fund’s earnings have been paid out in dividends to the residents of Alaska. Payouts have ranged from a low of $331 in 1984 to a high of $2,072 in 2015. Perhaps last year’s “highest ever” dividend makes local residents feel this year’s cut even more.
Bob Hafner, President of the Nome Chamber of Commerce, says it’s too early to tell how the PFD cuts are affecting local businesses in real time, but he is sure that every business is going to feel it in some way. “The dividend is a big chunk of their income for a lot of people out here in the bush,” he said. “When you take a villager’s income and compare to somewhere like Anchorage, it’s a big difference.” He said that now maybe those families don’t get to buy that four-wheeler or a heater for their home, and instead have to finance it or to put it off entirely.
Hafner said many bush Alaska businesses are already feeling an impact with online ordering, but now with the PFD cuts, they are sure to feel it even more. Especially the larger item businesses like snow-machine retailers and four-wheeler shops.
Pat Johanson of Morgan Sales & Service told The Nome Nugget that it’s too soon to tell how the PFD cuts will affect this year’s sales. But, he said right now he’s doing well and business is on the same pace as last year. Johanson said he would know more in a few weeks, since the majority of his customers usually wait for their paper checks to come in the mail. After those payouts are received is when business will pick up for him, normally after the first week in November.
Safeway, or locally referred to as Hanson’s, managers told The Nome Nugget that sales are good. Store manager Tim Motis said he couldn’t really compare last year’s sales during PFD time to this year’s yet because it’s not apples to apples. He said because the PFD is distributed in a different week than last year as well as a different amount, he couldn’t really say the difference right now. Motis said, “Business is good, sales are good.”
Unalakleet resident Karen Nanouk wrote in a letter to The Nome Nugget that she is “feeling the crunch” of the bite taken out of the PFD. Nanouk describes how many residents use their dividend money for rent, winter clothing or to buy gas or oil. Nanouk proposes a petition to revoke Walker’s decision and for the PFD to only be granted to longtime residents of Alaska. Nanouk writes, “I could have sworn that there was a clause in the writing of the PFD document stating that it cannot be touched/manipulated in the way that Governor Walker did.”
Nome resident Monica Rose told The Nome Nugget that it’s tough for many families, because when they knew they were getting $2,000 per family member, they could pay some bills, buy fuel for the winter, and still have some money left to go shopping or maybe buy plane tickets for travel. Rose said, “They [the government] promised they wouldn’t touch it, and they did.” According to a report by the Bureau of Labor Statistics, BLS for short, the average weekly wages in 29 areas throughout Alaska (one municipality, 16 boroughs and 11 census areas) ranges from $529 to $1,881 per week. The 2015 report serves as an overall comparison of wages between metropolitan Anchorage and the rest of the state. BLS reports that Anchorage had an average weekly income of $1,071, placing it in the top 20 percent of the nation.
Out of the 29 areas in the BLS report, 22 have average weekly wages below the national average of $968, with some falling way below. Six areas reported wages below $700 per week. So, while Anchorage makes up 45 percent of Alaska’s employed population with higher than average incomes, over 36 percent of Alaska’s working population have wages well below the national average.