Alaskans upbeat about fiscal outlook

Posted: Tuesday, October 16, 2001

ANCHORAGE (AP) -- Alaskans are more optimistic about the economy than are most other Americans, said state labor economist Neal Fried.

Unlike other parts of the country reeling from the slump in the technology-sector and massive layoffs, Alaska is enjoying slow but steady economic growth, Fried said.

The spirit of optimism contrasts sharply with the inferiority complex many Alaskans felt just a few years back when Wall Street was booming and computer science majors fresh out of college were snapping up big salaries and stock options in Silicon Valley and other tech centers.

Fried made his comments last week at the Alaska Travel Industry Association annual convention in Anchorage.

Alaska's sense of well-being is fueled in part by healthy oil prices and activity on the North Slope combined with increased federal spending in the state. Federal grants to Alaska over the past five years nearly doubled from $1.2 billion in 1995 to $2.2 billion last year, Fried said.

The Permanent Fund, valued at $24 billion, is another huge factor that sets Alaska apart. The state's oil wealth savings account distributed $752 million this week as part of the yearly dividend program. This year's total payout of $1.09 billion will be complete as checks are mailed out by Nov. 2. The Permanent Fund dividend is, in essence, an industry unique to Alaska and makes the state's economy look less and less like the national economy every year, Fried said.

Tourism is another bright spot for the state. Unlike traditional industries in Alaska, including oil, fishing, timber and mining, tourism has experienced long-term, sustained growth, steering clear of boom-and-bust cycles, Fried said.

Two-thirds of growth in Alaska's economy in the past 10 years has been in the services and retail sectors, where tourism plays a role, he said.

Cruise ships represent Alaska tourism's big kid on the block. Passengers and crews spent an estimated $181 million in four Southeast communities in 1999, according to research from Juneau's McDowell Group firm. The sheer volume of cruise passengers arriving in Alaska is staggering. The numbers of passengers disembarking in Juneau, for example, grew by 167 percent over the past decade, Fried said. Most recent figures show 680,000 cruises visiting Alaska ports, said Tina Lindgren, the travel association's president and chief operating officer.

Tourism's expansive growth can also be measured in bed taxes and room sales. In Mat-Su, for example, where developers have built several large hotels in recent years, bed taxes exploded by 475 percent between 1990 and 2000, Fried said. More than 3,000 hotel rooms statewide have been added in the past five years.

''The tourism industry during the past decade was growing much faster overall than the rest of the Alaska economy. They were a top performer,'' Fried said.



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