Economic development is a common "buzz" word among politicians in Alaska as one way to solve our state's financial woes.
In fact, we already have economic development in our state and it's not helping our state coffers at all.
For example, the Canadian-owned Fort Knox gold mine outside of Fairbanks has mined well over a half a billion dollars worth of Alaska's gold and has yet to help our state's monetary problems and probably never will (they may not even be paying the U.S. income taxes).
Why? Unlike oil, precious metals like gold have no royalty tax per ounce extracted and processed. Alaska's policy allows large foreign-owned companies to mine large amounts of gold (and other precious metals), ship the gold and profits outside, and not give the state anything for it.
Alaska's present policy for precious metals is a royalty tax on net profit. After seven years of operation, Fort Knox has yet to declare a net profit and most likely won't in the future.
Canadian-owned Pogo gold mine near Delta will soon be doing the same. Pogo won't even have to pay property taxes because Delta isn't an organized borough!
These operations do create jobs. However, some employees are brought in from outside. In fact, Alaska's present Department of Natural Resources commissioner was previously brought up from Nevada to work at Fort Knox.
So the monetary impact these large Canadian mining operations has for our state is zilch. Our state is gambling that there won't be severe environmental problems in the future to clean up.
Alaska needs to align their precious metal policy with that of oil so that these large Canadian mining operations can contribute something to our state coffers. Then Alaskan politicians can continue promoting economic development to help our state.
Margaret J. Johnson
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