The Institute of Social & Economic Research has just released a new study “How PFDs Reduce Poverty in Alaska” which addresses how reducing PFDs hurt the most vulnerable Alaskans. A previous ISER study demonstrated how cutting the PFD had the most adverse effect on Alaska’s private economy, even more adverse than either an income tax or sales tax. The bottom line of this research: “Reducing or eliminating PFDs to help fill the budget gap will significantly increase the number of Alaskans below the poverty threshold.”
(Graphic by Clemencia Merrill)
Here is the conclusion from the ISER research (Matthew Berman and Random Reamey):
“It’s not only in Alaska that census data don’t include all the income of children under 15—since the same census questionnaire is used nation-wide. But the under-reporting is almost certainly more acute in Alaska, since nearly all Alaska children receive PFDs, and some receive Alaska Native corporation dividends. Even after we adjusted census data to include all PFD income, we saw that poverty rates have been rising in Alaska, especially for children and residents of urban areas. One reason PFDs have not stemmed those increases is that more new residents arriving in urban areas are poor and not eligible to receive PFDs right away. Still, poverty rates in urban places remain far below those in rural Alaska, where there are fewer jobs. Reducing or eliminating PFDs to help fill the budget gap will significantly increase the number of Alaskans below the poverty threshold. But unless the census revises its methods for collecting income data, poverty in Alaska will actually increase by more than the official poverty rates show.” (emphasis added).