Panel calls for cash to spur tours

Funds would offset 9/11 losses

Posted: Thursday, December 20, 2001

A state task force has recommended that the Legislature spend $12.5 million to help the tourism industry rebound from the Sept. 11 terrorist attacks.

The one-time expense would allow the industry to heavily market Alaska and help thwart an expected loss of revenue and tourism jobs next season, according to the report by the Task Force on Jobs and the Economy since September 11, which was appointed by Gov. Tony Knowles.

"Of all the factors that could turn around our situation, we have the power to affect only one - to speak to the vacationing public and convince them to come to Alaska," the report said.

Knowles, a Democrat, has not decided whether to seek the money from the GOP-led Legislature, according to a spokeswoman. Key Republican budget writers could not be reached for comment by the Empire's midday deadline.

Knowles appointed the panel of business leaders, economists and state officials to examine the effect of the attacks on the Alaska economy, according to his office.

Forecasts by the task force, which based its findings on predictions by leading Alaska economists, are:

Alaska's fiscal situation will worsen due to the dramatic drop in crude oil prices.

The flow of federal funds to Alaska could be curtailed.

The U.S. Postal Service may scale back a program that

subsidizes rural mail service and some small air carriers.

Foreign air carriers may continue to bypass Alaska due to increased security at the Anchorage airport.

The cost of doing business in Alaska will increase due to a loss of productivity and increased insurance and security costs.

National Guard deployments may affect some small businesses by reducing the available labor pool in Alaska.

Tourism in Alaska is likely to decline because of a fear of flying and the poor economic situation in Japan.

The panel's request for tourism marketing money mirrors a plan unveiled last week by the Alaska Travel Industry Association, which said it will ask lawmakers for $12.5 million in emergency funds to promote Alaska.

Tourism was the hardest hit sector of the national economy, and it's the second largest private-sector employer in Alaska, the task force said.

Alaska businesses receive more than $1.3 billion annually from tourism while state and local governments get $124 million in taxes, fees and other assessments, according to the report, which estimated the downturn will cost businesses more than $220 million and state and local governments $28 million next year.

The Legislature would cut the losses by more than half if it appropriated $12.5 million in marketing funds in time for the 2002 season, the task force concluded.

"Half of Alaska's visitors book their trip within three to six months prior to travel. This makes the January-May period a critical one for communicating with the consumer," the report said.

The panel said the recommendation was not unanimous and that some members opposed specifying a dollar amount.

The task force also recommended the state continue to monitor effects on the economy of the attacks and appeal to the federal government for financial and legislative assistance. The governor should reconvene the task force quarterly for the next 12 months to address specific topics that may arise, the report said.

Task force members included Chris von Imhof of Alyeska Resort, Cliff Argue of Alaska Airlines, Susan Bell of the McDowell Group, Judy Brady of the Alaska Oil & Gas Association, Dennis Brandon of Cook Inlet Region, Eric Britten of CSX Lines, Mike Burns of Key Bank, Scott Goldsmith of the University of Alaska Anchorage, Terry Hoefferle of Bristol Bay Native Association, Jim Jansen of Lynden, Brian Rogers of Information Insights, Therese Sharp of Walsh, Kelliher & Sharp, and state officials.

Kathy Dye can be reached at kdye@juneauempire.com.



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