Perspectives on Business and Economics, Vol. 40

3 to a predetermined formula. Because the legislature had already drawn heavily upon the CBRF, SB 26 was intended as a stopgap measure; nonetheless, it fails to address the underlying causes of the budget crisis (Hederman et al., 2019). From its establishment up to 2017, the Alaska PFD program has distributed close to $22B, in amounts varying from around $300 to $2100 per Alaskan per year (Guettabi, 2019). In 2021, the dividend amount was $1114 per resident, and approximately 643,000 eligible residents were estimated as having received the dividend, which resulted in about $716.3M being distributed (Kitchenman, 2021). These annual dividends have had financial implications for many Alaskans. Economic Impacts of the Permanent Fund Dividend on Rural and Native Alaskans In response to the ongoing budget challenges, the legislature has proposed eliminating the PFD in order to appropriate most of the ERA savings to cover the deficits. Based on the 2021 dividend, this option would make available approximately $716.3M toward closing the budget deficit. Nevertheless, it is critical to consider the economic impacts of the PFD on factors such as poverty rates among rural and Native Alaskans and employment. Without considering the PFD, poverty rates in urban areas have always remained much lower than poverty rates in rural Alaska. In 2015, the poverty rate for urban areas was about 12%, although the rural Alaska poverty rate averaged 20% (Berman & Reamy, 2016). This disparity can be explained by the higher cost of living in rural Alaska and the greater economic opportunities available in the urban areas. Additionally, Figure 1 shows that poverty rates, over time, for Alaska Natives have been significantly higher than for non-Native Alaskans. According to a study conducted by the University of Alaska Anchorage Institute of Social and Economic Research, the PFD reduced poverty rates in Alaska from 11.4% to 9.1% over the five years, 2011 to 2015 (Guettabi, 2019). More specifically, in rural Alaska Native/ American Indian Non-Native 0 5 10 15 20 25 30 2000 2002 2004 2006 2008 2010 2012 2014 2016 Population Below Povery Threshold (%) Figure 1 Percentages of American Indian/Native and Non-Native Alaskans Below the Poverty Threshold Source: Berman & Reamy, 2016.