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In Alaska, even toddlers file tax returns

The state's annual Permanent Fund Dividend payments are out. Individuals will use their $1,174 checks for things like sled dogs and overdue mortgages.

By Donna_Freedman Oct 7, 2011 1:14PM
Since 1980, every eligible Alaskan has gotten an annual check ranging anywhere from $1,106.96 to $2,069. Yes, even the little kids: As long as you can prove residency for at least a year, you're in.

Seems like a pretty sweet deal, getting a check every year just for living there. That is, unless you're paying $7 a gallon for gas.

The yearly PFD checks come from earnings from the state's $35.7 billion savings account, a fund created back in 1976 during the trans-Alaska pipeline construction era. Residents voted to amend the state constitution to create the fund and keep it safe for future generations.

The total of dividends paid, including this year's checks: $18.8 billion. It's the Last Frontier's own little economic stimulus as airlines, auto and snowmachine dealerships, hardware stores and even hamburger shops run PFD specials.

An Associated Press article published in the Anchorage Daily News pointed out that since the state is largely roadless, "the cost of going to the nearest city to shop -- or just get away -- adds up fast."
"While the extra money is a great perk, it doesn't always go far in a state where some rural residents pay $7 or more a gallon for gasoline and one study showed food costs for a week could run into the hundreds of dollars for a family of four," the article notes.

A resident of Hooper Bay (about 500 miles west of Anchorage) told the AP that he might spend his dividend on a couple of new sled dogs. State revenue commissioner Bryan Butcher used to work for the Alaska Housing Finance Corp., and recalls that many delinquent mortgages were caught-up in the month of October. Post continues after video.
I lived in Alaska for 17 years. We joked about the PFD being just enough to cover annual trips back to the East Coast to visit both sets of parents.

But I remember other stories of dividend use: hot tubs, down payments on new trucks, family trips to Hawaii. One politician (wish I could remember his name) financed a campaign with his kids' PFDs.

When my daughter hit middle school she found that some kids actually got to spend their dividends. However, she knew better than to ask if she could do the same.

Readers:
What would you do with an extra $1,174? Start an emergency fund? Pay bills? Make an extra house payment? Go to Vegas and put it all on red? 

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