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Anchorage Daily News on strong news about state, but challenges ahead:

Posted: Monday, January 15, 2001

There was a mood of minimalist satisfaction in Juneau Wednesday as Gov. Tony Knowles delivered his seventh State of the State Address, declaring that ''the state of our state is strong.''

There is, in fact, much to like. Jobs are up, unemployment is down. Welfare rolls are shrinking. Violent crime is down. Home ownership by Alaskans is at an all-time high. The Alaska Permanent Fund is growing and taxes -- except on big oil -- are next to nothing.

Incomes remain strong, even if they're falling relative to the rest of the country. The Special Olympics World Winter Games are coming to Alaska, we lead the nation in Internet use, and we ran a clean election in November -- even increasing the voting levels of young Alaskans. The governor wants construction to start on a natural gas pipeline before he leaves office in two years -- and the prospects are improving dramatically.

Gov. Knowles made three challenging proposals that will demand a great deal of his own determination if they're to make headway. The first is a renewed call for a solution to the subsistence dilemma, the issue that most threatens our unity as a state. The second is for a hike in the minimum wage, to try to push Alaska's general prosperity down the income scale. And the third is for a solution to the state's structural budget gap that would clear a big storm cloud from our economic horizon.

He's right on all three, and on putting Alaska's interests front and center regarding a gas pipeline.

The governor's agenda is pretty much the same one he's been pushing for seven years: jobs, families, education and subsistence. He took a few shots at the federal government, recognized some genuine Alaska heroes -- as has become obligatory in these speeches -- and commended the Legislature for its public service. He asked for action on the gas line, education funding, public health, and veterans care. None of that is likely to raise many eyebrows or excite much imagination.

Not even the Republican legislative leadership, in their post-speech review, took much exception. ''We agree with the warm wishes in his wish book,'' said Senate President Rick Halford. ''The devil's in the details.''

Then why not just accept all the good news everyone was trying to enjoy? Because, as the motivational gurus might say, good enough never is.

Subsistence has not been solved, even though there are only a handful of votes in the Legislature blocking the path to a public vote. Somehow, Alaskans must be given a chance to express their wisdom here.

The economy is good but not as good as it would be if we had kept pace with national growth. One estimate shows Alaska ''lost'' more than 25,000 jobs it would have had between 1985 and 1999 if we had kept up.

Productivity has fallen. And despite our high rate of Internet use, Alaska is late to the new-economy party. Forty years ago, two-thirds of our personal income came from federal employment. Today we've diversified -- the current figure is about one-third -- but we've largely replaced dependence on the feds with dependence on an even more volatile industry, oil and gas.

Higher education got mention as the key to the new knowledge-based economy, but there's still a lot of work and leadership ahead to define a mission for the University of Alaska, build public support, and secure diverse funding -- from the state and from other sources. UA President Mark Hamilton has taken the lead, happily, but some hard thinking in Juneau would help.

And there remains the fiscal gap -- a wholly unnecessary hazard in a state with the tools we have on hand.



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