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Two cities touched by AMHS move

Capital city faces loss of 44 high-paying ferry positions

Posted: Friday, March 26, 2004

Editor's note: This is the second part of a three-day series that looks at the relocation of the Alaska Marine Highway System headquarters from Juneau to Ketchikan.

Today: How the move could affect Juneau and what relocation means for Ketchikan. On Sunday: Is this capital creep and a look at the building that will house the agency.

The dozens of Juneau jobs headed for Ketchikan with the Alaska Marine Highway System's administrative offices will take substantial salaries with them. They'll also leave their mark on the capital city's schools and real estate market.

But some believe the positive effect for Ketchikan will be greater than the negative one on Juneau.

The state announced March 8 the marine highway headquarters will move to Ketchikan this summer.

The jobs that will be lost include eight vessel construction managers, two port engineers, two architects, as well as several administrative clerks, a secretary and an accountant. Most of the jobs pay quite a bit more than the average annual salary in Juneau.

About half of the 44 positions that will move pay $55,000 to $85,000 a year. Fourteen of the jobs pay about $35,000 to $47,000 a year.

The Juneau Economic Development Council, which prepared an economic impact statement on the move, estimated that the average annual income of these employees, including benefits such as health care and vacation, is $70,000 to $75,000 - a conservative estimate, said Lance Miller, executive director of the Juneau Economic Development Council.

These jobs will cause a loss of other jobs in the economy such as those in the community's retail sector, restaurants, schools and public services. The total payroll loss in Juneau could be $3.8 million annually, Miller said.

"It's a significant impact," he said. "These are good jobs. These are people who have been in the community for a while, have established connections and are a part of the community. So in addition to potential payroll loss, we're losing citizens."

Though Miller is optimistic Juneau's economy will recover from the loss, the specific maritime jobs lost in the ferry system move probably will not be replaced, he said.

According to the Alaska Department of Labor, an average of 17,331 residents per month were employed in Juneau in 2002, with average annual earnings of $34,488. In Ketchikan, 6,732 residents per month were working in 2002, with an average annual pay of $32,184.

Juneau's unemployment in 2003 was 6.2 percent, while Ketchikan's was 8.9 percent, said Neal Gilbertsen, Southeast Alaska economist for the state Department of Labor.

From an economic perspective, moving the ferry system may help Ketchikan more than it hurts Juneau, Gilbertsen said.

"A one-shot loss of 50 jobs is not good, but it's pretty small in relation to our economy," he said. "The impact to Ketchikan's economy is somewhat greater."

Gilbertsen pointed out, however, that the addition of jobs to Ketchikan's economy will not necessarily decrease Ketchikan's unemployment rate, because many of those jobs will presumably be filled by Juneau residents.

Whether employees of the ferry system in Juneau will move to Ketchikan with their jobs is an important question that is not easily answered. Several ferry system employees have said they will not go to Ketchikan, but others are waiting to make a decision.

Because they don't know how many homes ferry system employees own in Juneau, local real estate brokers can only speculate as to how the loss of jobs will affect the housing market.

Pat Stevens, president of the Southeast Alaska Multiple Listing Service and owner of Alaska Realty Network, estimates 10 to 20 homes could enter the market with the move.

"But even if it was 40 houses on the market, and a variety of housing types, which it would be, I can't imagine this hurting us too much," Stevens said.

This week, 39 houses are for sale in Juneau - an inventory that is "very low," Stevens said.

Forty houses on the market in Juneau would sell within a couple of weeks, Stevens predicted.

Mike Race, also a real estate broker in Juneau, said he doesn't believe 40 homes on the market would affect the selling prices of homes here.

"Right now the market's pretty thin, so having houses on the market would be pretty advantageous from a real estate sales angle - there would be more product for potential buyers," Race said, adding that spring is traditionally the busiest time of year for home sales.

As ferry system employees leave Juneau, so will their children. The Juneau School District receives an average of $4,000 in funding per student, and anticipates having to adjust its budget because of the ferry system move, said district Superintendent Peggy Cowan.

"Depending on where the students go to school, it would result in a loss of teachers, because the number of teachers in the district is determined by the number of students in the schools," Cowan said.

But the loss of students does not necessarily indicate a loss of teaching positions, Cowan said. If the students who move are equally distributed among the district's 10 schools, teaching positions may not be affected, but other services might be reduced.

"That money goes to textbooks, principals, custodians, oil, so there could be associated reductions," she said.

• Christine Schmid can be reached at christine.schmid@juneauempire.com.



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