The Alaska permanent fund dividend increases residential payments for water services

Abstract

Alaska has the lowest rate of access to in-home water services in the United States. At the same time, the state also has the world's oldest Universal Basic Income (UBI) program, and every Alaska resident receives an annual payment through the Alaska Permanent Fund Dividend (PFD) program. In this study, we use a panel dataset of rural Alaska water and sewer utilities in 18 Alaska villages from 2012 to 2016 to explore the impact of the PFD on residential payments. We estimate fixed effects for eight models. Models are developed by grouping villages by low and high variability in payments, enrollment in Alaska Native Claims Settlement Act (ANCSA) regional corporations and Community Development Quota (CDQ) organizations. We find that on average, each utility is missing $14 710 in customer payments yearly, and have a median residential delinquency rate of 14%. The model with all the villages (p < 0.01), ANCSA models (p < 0.05), and CDQ models (p < 0.05) all show a significant increase in residential payments when the PFD is paid in October. Average residential payments in October are $3671 to $10 058 higher than in other months. The increased payments represent 2% to 6% of the total revenue of utilities. We estimate that across rural Alaska the PFD generates between $734 200 to $2 011 600 in additional payments for water utilities. These findings suggest that the PFD and other unrestricted cash transfers can play an important role in increasing household water security in rural Alaska and other places with similar problems.