JUNEAU — Banks stocked up on cash and merchants braced for an annual shopping spree to rival Christmas as about 400,000 Alaskans awoke yesterday flush with cash.
The Alaska Permanent Fund made its annual direct deposits of dividends from the state's oil-investment account into the bank accounts of eligible Alaskans.
This year, 406,682 Alaskans received their $1,850.28 dividend by direct deposit, injecting more than $752 million into consumer accounts in a single day. An estimated 190,000 other residents will begin receiving checks after next week.
All checks will be mailed by Nov. 2, the state Department of Revenue said. Overall, the 2001 Permanent Fund will distribute $1.09 billion to an estimated 590,423 eligible Alaskans.
Dividends are paid to every Alaska man, woman or child who has lived in the state for at least a calendar year, as well as Alaskans serving in the military or attending college outside the state.
From humble beginnings 24 years ago, the $734,000 account has grown to $24.8 billion, and become an important ingredient in the state's economy.
"It's one of our biggest basic industries now," rivaling fishing, mining and tourism, said Scott Goldsmith, economist with the University of Alaska at Anchorage. State economists estimate dividend checks equal about 11 percent of the $9.7 billion in wages and salaries paid annually to Alaskans.
The fund was established by referendum in 1976 and became a rainy-day account for some of Alaska's excess oil revenues. It received its first deposit a year later, and in 1982 residents began receiving annual checks.
Alaska residents who have been around since the first $1,000 payout in 1982 will have received $20,361 from the program after this year's distribution.
Dividend amounts had doubled over the past eight years, from $915 in 1992 to a record $1,963 last year.
The first payout of the Permanent Fund checks sparks a plethora of sales at car dealerships, furniture stores and other businesses.
"The two biggest spikes (in sales) we see are the Permanent Fund and the first snow. Sometimes they happen on the same day," said Jeff Stultz, of the Army Navy Store in Anchorage.
Both Alaska Airlines and the state's ferry system, the Alaska Marine Highway System, offer to trade dividend checks for rides. A Juneau cabdriver was selling his cab for the price of two checks yesterday.
"I've been here for 22 years, and I'm going to go somewhere where there's sunshine for a while," said the cabdriver, who would give only his first name, James.
But some Alaskans may not see an entire check coming. The state can garnish checks for unpaid child support, back taxes and small-claims judgments. This year the state expects to collect about $21.4 million to help delinquent Alaskans pay off those debts, said Nanci Jones, director of the Permanent Fund Dividend Division.
Anchorage, the state's most densely populated city, will seize $1.5 million from residents for unpaid parking tickets, back taxes and other debts, Jones said.
Poor stock performance caused the fund to lose money for the first time in its 25-year history, dropping by $1.7 billion by June 30. The fund's net income was $1.2 billion on June 30, about half of the $2.22 billion earned last fiscal year.
But since dividend checks are calculated on a five-year average of net income, checks fell by only $113.58, the department said.