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AEDC Says Permanent Fund Dividend May Rise This Year

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AEDC
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Forecasting suggests that this year’s Permanent Fund Dividend is expected to rise significantly.  KDLG’s Chase Cavanaugh has more on the market analysis.

The Anchorage Economic Development Corporation predicts that the declining dividends in the Alaska Permanent Fund are expected to reverse this year.  Established in 1976, the Permanent Fund sets aside oil revenues in a dedicated place for future generations.  Part of this program is an annual dividend paid to Alaska residents, last year’s totaling $900 per individual.  Bill Popp is AEDC’s CEO, and he says this year’s dividend will increase significantly.

“We started asking questions and started getting some feedback from a number of our financial center sources telling us that they felt the permanent fund was going to see a potential spike this year because of the fact that the last of the bad investment years for the fund in the five year trailing average, 2009 was about, was dropping off. The information that we were getting from most of our analysts was telling us that we would see at least a 50% increase in the fund.”

“Bad investment” refers to the transactions done by the funds managers in 2009.   These were strongly affected by a poorly performing stock market, and contributed negatively to the five year average of investment earnings used to calculate the dividend.  Popp says this year’s dividend could go even higher than predicted, adding that while it isn’t a ton of money, its simultaneous distribution generates a significant amount of economic activity.

“The Permanent Fund Corporation is now on record as saying that they feel the dividend could as much as double. That’s very substantial for the Anchorage economy. That’s hundreds of millions of dollars going into the economy in the fourth quarter and can have a substantial effect on retail sales, travel, investments, paying off bills, buying homes. It will definitely have a reverberation in the economy, especially for a dividend of that size that could be approaching seventeen, eighteen hundred, two thousand dollars in the fourth quarter of this year.”

AEDC’s predictions are part of its 3-year economic outlook, which can be viewed at the group’s website.  The final dividend calculation is expected in September.