Economic recovery has to begin at home

Frontiersman editorial board

As Governor Frank Murkowski makes good on his promise and vetoes $125 million in proposed spending in the legislature's budget, it's important, now more than ever, to listen carefully to the language that accompanies the cuts and describes the path the governor envisions for our state.

In today's Spectrum, Director of the Office of Management & Budget, Cheryl Frasca writes that the administration "advised the legislature and Alaskans of two goals: Spend less and reduce the state's reliance on its savings to prop up spending." She also writes that, while the legislature succeeded in the first goal, it didn't protect the state's savings sufficiently enough -- leading to the governor's vetoes.

All of that is true. There was another goal that is not mentioned in today's Spectrum, however. That was the goal of increasing revenue. The primary source of that increased revenue is intended to come from more aggressive development of the state's natural resources. Many legislators are quick to point out that the legislature passed several pieces of legislation that will help achieve that goal … in time. The basic idea is to make it more appealing for Outside interests to invest in resource development in Alaska. The legislation that was passed aims to achieve that by easing regulation and by providing economic incentives. There's nothing new about that.

What the plan fails to take into account is the harsh reality of resource development in Alaska. While the state is rich with several appealing resources, some of them are hard to get at, expensive to refine and even more costly to ship. Resource development in Alaska is largely dependent upon the market, and the general economy. To make resource development appealing in our state during tough times may require incentives that greatly reduce the state's benefits from its own resources. In any case, resource development is a long process.

At a time when revenue generation is critical, the governor is cutting funding to programs and entities that benefit Alaska's tourism industry -- the one Alaska resource that is ready to be exploited now. When Americans are leery of foreign travel, they are poised to visit Alaska. Instead of supporting the tourism industry and developing a more aggressive statewide tourism plan, the Governor, who doesn't like taxes, seeks to apply user fees and increased sales taxes that specifically target tourists. When his focus should be upon supporting local businesses and the people who work for them, the governor seems determined to make life difficult for Alaskan entrepreneurs while courting bigger companies from Outside. The best medicine for Alaska's economy is to create a healthy environment for Alaska businesses. After all, as the governor likes to say, "Alaskans are Alaska's best resource."