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My turn: A look back at the Murkowski years

Posted: Sunday, December 03, 2006

In a campaign speech delivered to the Anchorage Petroleum Club in 2002, Frank Murkowski said resource development would solve the state's fiscal and economic problems. He promised to boost Alaska oil production by 3 percent a year starting in 2005. As we know now, oil production actually fell - by more than 4 percent a year.

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Let's look at the other key goals Murkowski set for his administration, and compare each with the reality that played out.

• Alaska's economy: In 2002, many voters felt a sense of economic malaise, and Murkowski shrewdly hammered on themes that resonated with this. He cited reports showing that young adults were leaving the state in droves, and he decried the loss of high paying "family jobs' in the resource industries, blaming these problems on his predecessor, Tony Knowles. Murkowski predicted his resource-based fiscal plan together with newfound discipline on the spending side, would induce outsiders to flood the state with new investment, creating thousands of high-paying jobs.

Like the oil promise, it was a fantasy. Alaska's economic performance during Murkowski's four years wasn't much different than during the preceding eight years under Knowles. Job growth under Murkowski averaged 1.7 percent per year, versus 1.8 percent under Knowles. Outmigration of young adults continued.

• Fiscal discipline: Murkowski got off to a good start, squeezing more fat out of the state budget in his first year with less harm to services than I thought possible. When the Legislature refused to cooperate, the governor brought them to heel using his veto pen. It seemed Murkowski really knew how to play political hardball.

Unfortunately it didn't last. The administration's commitment to fiscal discipline melted away in the face of rising oil prices. General fund spending during Murkowski's four years increased by 65 percent, far outstripping inflation and the growth of Alaska's population.

• Permanent fund earnings: Murkowski thought it was crazy for the state to have a huge permanent fund and be unable to use income from that fund to resolve the state's chronic fiscal problems. He kept this view to himself as a candidate, but as governor he pushed a state constitutional amendment to redefine fund earnings, and use half of those earnings to support state government.

To put this amendment before voters Murkowski needed support from both Republicans and Democrats in the Legislature, yet his approach to negotiating with legislators was tardy, erratic and unbending. During the showdown special session the governor called in 2004 to resolve the issue, the measure never made it to the floor. After that Murkowski gave up, turning his efforts to the gas pipeline.

• Gas pipeline: If there was a single achievement that Murkowski hoped would define his administration, it was jump-starting construction of a gas pipeline. During the last two years, Murkowski focused all his administration's energy on this task. With the failure in 2006 of repeated special sessions seeking ratification of his proposed contract with major oil producers, it's clear that the glory of achieving the gas pipeline - if it comes at all - will fall to some other governor.

In terms of achieving his own key policy goals, Murkowski was the least effective governor in the state's history. If Alaskans had foreseen this four years ago, would they have elected Fran Ulmer, instead of Murkowski? I have doubts.

The oil officials listening to Murkowski's Petroleum Club speech in 2002 scoffed at his fantastic production promise, but most of them voted for him anyway. Many Alaskans suspected that the dream of resource development might be a fantasy, but it was a fantasy they really liked. Murkowski's arrogance made him the most unpopular governor in Alaska's history; setting that aside, I'm not sure voters couldn't still be seduced by that ill-considered dream.

• Gregg Erickson is a Juneau economic consultant and the editor - at-large of the Alaska Budget Report, a newsletter covering the state budget and economy.



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