Slashdot Mirror
Alaska: The Only US State Where Everyone Gets Free Money
merbs writes: Alaska’s Permanent Fund was established in 1976, in the midst of a black gold rush; the massive Trans-Alaska pipeline was in the process of being built, and the state had reaped $900 million in revenue from the sale of drilling leases in Prudhoe Bay, the largest oil field in North America, in a matter of years. In a matter of a few more, it’d spent it. Alaskans soon recognized that their enormous oil reserves were nonetheless limited, so, with a kind of longterm forward-thinking rarely seen in politics today, they voted to add an amendment to the state constitution to establish a fund that would protect a portion of all incoming oil wealth for future generations. In 2014, the net income of the fund was $6.8 billion dollars and the dividend doled out $1,884 to 640,000 citizens, despite a decline in oil revenues that year.
Cute. The 640,000 citizens received in total $1.2 billion dollars.
If this had happened in Texas (another state that produces a lot of oil, though in general doesn't have all the natural resources Alaska has), those $1.2 billion would amount to... less than $45 for each of it's 27 million inhabitants.
Now it doesn't look as cool, does it?
Alberta just put the royalties into general revenue and spent it. Now that the price of oil has collapsed they are facing a huge budget deficit and have nothing to show for it. (Well, some infrastructure may have been built that wouldn't have.)
Norway placed high royalties on their oil and invested it. I think their fund is the largest sovereign fund in the world. There is a budgetary rule that only 4% of the value of the fund could be taken out in a year to be used in their budget. So far the fund has always grown by more than 4% each year so it looks good for them.