“WE HAVE”, notes Clark Gruening, an Anchorage lawyer, “a problem most states would die for.” No kidding. Like many states, Alaska has a budget deficit: $475m, around a fifth of annual state spending. But unlike other states fighting red ink, Alaska has an unbelievable asset: a pile of cash worth $28 billion. Taxes on oil from Prudhoe Bay in northern Alaska created that stash, which began to build up in 1977. So on the one hand, Alaska is bust. On the other, it is the richest state in the country.
The hoard, called the Permanent Fund, has mostly been left alone (Mr Gruening was a member of the board that helps to oversee it). With one exception: since 1982, every Alaskan has received an annual cheque, ranging from a low of $333 in 1984 to a high of $1,963 in 2000. The amount depends on how well the fund's investments perform. “The dividend”, as Alaskans call it, has become an annual ritual much anticipated by car dealers in Anchorage, cash-strapped trappers in remote Eagle, and snow-weary Juneau residents dreaming of holidays in Mexico.