Alaska oil dividend declines to $1,305 per person

ANCHORAGE, Alaska (Reuters) - Each Alaskan adult and child will receive a $1,305 dividend from the state's oil-wealth trust fund, but the annual payment will be less than half last year's record windfall.

The reduced payout comes after a tough year for the Alaska Permanent Fund, which lost $6.6 billion, or 18 percent of its value in fiscal 2009, according to its annual financial report.

The dividend, which will start to be paid in two weeks, was announced late on Wednesday by Governor Sean Parnell at a ceremony in Anchorage.

Annual dividends are based on a five-year earnings average, so last year's losses were outweighed by investment success.

Last year, $3,269 was sent to each Alaskan, including a record $2,069 dividend, plus a one-time "energy rebate" of $1,200 per Alaskan championed by then-Governor Sarah Palin, who went on to be the Republican vice presidential nominee.

The Alaska Permanent Fund was created in 1976 as a repository for a portion of the state's oil-royalty earnings. The dividend payout, which started in 1982, is now an Alaska tradition. Merchants rely on the infusion of money to fuel a seasonal buying spree.

(Reporting by Yereth Rosen; Editing by Bill Rigby and Peter Cooney)