Real issue in governor's race is how to reverse poor economic trends

Posted: Tuesday, June 25, 2002

Early into the race of Alaska's next governor, the issue of the state's economy -- how bad it is, or isn't, and who's to blame -- quickly became a hot campaign topic. And a report released last week by the U.S. Department of Commerce only added fuel to the fire.

The report, done by the department's Bureau of Economic Analysis, listed Alaska as one of only two states that seemed to miss the economic expansion of the 1990s. Instead of increasing, the report stated, the total state output actually shrank, while virtually all other states saw their gross state products grow.

Even before the report came out, Sen. Frank Murkowski, R-Alaska, who is ready to trade his Senate seat for the governor's office, had made an issue of the state's economy. After the report was released, his office sent out a long list of reports detailing the decline in Alaska's per capita income relative to other states and the decline in the number of young adults in Alaska.

Meanwhile, a spokesman from Lt. Gov. Fran Ulmer's campaign, said the report is really more indicative of the downward trend in the state's oil industry than something state government could control. She says state Labor Department figures decry the idea that Alaska is losing its young people to the Outside, and that the decline can be attributed to a reduction in births a few decades ago, not a mass exodus now.

Murkowski's camp points out that the senator has been working to reverse the oil industry's decline in Alaska through a variety of measures including attempts to open the Arctic National Wildlife Refuge. Meanwhile, Ulmer's camp says the report proves the need to diversify the state's economy.

Actually, they are both right.

While just how the report made its calculations and how accurate they are of the real picture has been called into question by at least one state Department of Labor economist, the point is clear: Alaska's economy is not one of the best-performing in the nation.

There is no doubt this issue will continue to be a major campaign issue, but the focus should not be on pointing fingers. Politicians would much better serve Alaskans not by looking to place blame, but by focusing on how to reverse the trends. And that will take a combination of finding ways to strengthen and extend the oil industry's life in Alaska, while diversifying our economy so that it is not so dependent on one industry that has proven time and again to be volatile.

A variety of factors -- the state's far-flung location, extreme temperatures and relative costs of doing business -- will make both efforts a challenge. But if the candidates meet that challenge and put forth solutions instead of accusations, the state will be the better for it.

-- The Fairbanks Daily News-Miner

June 18

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