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Act now to boost the state's economy

Posted: Sunday, December 09, 2001

Juneau's McDowell Group reports what many suspect. Only Juneau has experienced any economic growth in Southeast in the past 10 years because it's the state capital. Other SE communities have experienced drops in jobs, payroll and personal income.

The picture gets gloomier when with expanding Chilean seafood competition and the plight of a visitor industry hurt by a world recession. Even Southeast's bright spot is threatened with the loss of the Legislature.

The Fiscal Policy Caucus of lawmakers produced various plans on how to raise more revenue from Alaskans and their surviving industries. It was enough to raise rumors in Anchorage that at least one oil company is about to sell out in Alaska and move operations to the Gulf of Mexico.

Remember that the timber industry left Alaska not because it went broke. Companies moved to other countries. Is there a reason companies holding rights to Alaska natural gas want to move it from Alaska to Canada by the shortest route before sending it south?

There is competition for every Alaskan product from oil to scenery. Lose to competition and Alaskans lose jobs and revenue to run their state.

Aside from appropriating money to sell the state, Alaskans must review regulations to be sure they are reasonable and put to work their research agency, the University of Alaska.

But most off all, the state must mount an aggressive plan to make Alaska more attractive to visitors and industry, which also enhances businesses and Alaskan's lives.

That means selling revenue bonds to build revenue-producing projects, selling general obligation bonds to improve infrastructure to attract revenue and job-producing business.

Congressmen hint they are ready to subsidize a gas pipeline from Alaska. The state should jump in for a share of that. It must be sure there is an individual income tax and payroll tax in effect to provide revenue for providing services. Both taxes were in effect when the trans-Alaska oil pipeline was constructed.

Construction jobs alone from such programs help the economy but the long range should be considered. For example, the state owns Ketchikan Shipyard and has leased it to Alaska Ship and Drydock to develop a maritime service industry. The shipyard was never finished so Alaska Ship and Drydock is unable to operate it to its full potential, although it has proven there is a market. Bonding to finish the yard improves the income to the state and the operator. More high-paying jobs and better services to those operating in Alaska waters are long-term benefits.

Bond funds to revitalize the state ferry system cuts costs and increases income plus it increases services to Alaskans. Ferry traffic sank almost as fast as the Titanic in the last half of the '90s. Since 1992 when Southeast ferries handled 372,680 passengers and 97,239 vehicles, traffic dropped in six years to only 303,076 passengers and 84,328 vehicles. That is according to the latest figures the state has posted. Indications are losses will be worse when the last three years are revealed.

Southeast's economic slump caused part of that drop. But most of it is from antiquated equipment and mismanagement. Mismanagement includes raising some prices to the extent ferry use is discouraged. Management now advertises for ferry workers while in the 1980s there was a waiting list of job-seekers.

But what can be expected from 40-year-old ships designed before recreational vehicles, before the American Disabilities Act, before computers, before gas turbines, before air and water discharge rules and before international safety at sea rules?

The three original mainliners should be sold and replaced with modern ships designed to take advantage of current traffic trends. That means two trips a week from Bellingham to Skagway with stops at mainline ports, including Prince Rupert. Ferries leave Bellingham every Friday now with a full car deck. It's alleged the state makes money on that run. Prince Rupert also can be served with a Ketchikan shuttle. But the traffic volume has moved to Bellingham where one ferry a week most of the year and two ferries in the summer embark as many cars and passengers as Prince Rupert with three to five ships a week.

Local port authorities should be encouraged to provide small vessel service to mainline ports, such as the Prince of Wales communities are doing. Those ships meet local needs less expensively, especially with modern vessels, and provide jobs in outlying ports. The only place with the traffic to make a high-speed vessel feasible, if at all, is between Juneau and north Lynn Canal. It'll be even more feasible if roads are extended to shorten the ferry run.

Those are two examples of how the state government can stimulate the economy after it adopts policies that don't scare industry to our competitors.

Instead of sitting on our bunk, stuffing decreasing oil revenue into our mattress, Alaskans must get off our duff and act to boost the economy.

Williams is the retired publisher of the Ketchikan Daily News.



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