Session: State Capitol, Room 411 Juneau, AK 99801-1182 Toll Free: (877) 465-3004 Phone: (907) 465-3004 Fax: (907) 465-2070 Interim: 119 North Cushman Street, Room 213 Fairbanks, AK 99701-2879 Phone: (907) 452-1088 Fax: (907) 452-1146

Vision Will Lead State to Prosperity

We Alaskans have reason for significant, but guarded optimism. We can be optimistic based upon our resource economy; oil, gas, minerals, timber, fish, tourism; all of which may provide opportunities for generations to come. We can be optimistic based upon our strong work ethic, our cultural diversity and our collective can-do spirit; intangibles which will ultimately define Alaska and its people. We most assuredly should be optimistic about the future based upon our financial situation; with $25 billion dollars in the bank, and no individual taxes, we are the envy of the nation.

And yet, despite the apparent good news, our optimism should be guarded; warning signs are also apparent. Our market share for oil has declined and the great bulk of our natural gas has not yet been taken to market. Market access for Alaska's minerals is hampered by a limited transportation infrastructure. The timber industry is paralyzed by a national political environmental policy battle. The fishing industry, particularly salmon, is hemorrhaging market share due to the efficiencies and subsidies of fish farming. The growth of the tourism industry is temporarily halted as a result of the September 11th terrorist attack.

These warning signs have been manifested statistically; while other state's economies have grown rather dramatically in the last decade, Alaska's has declined. That fact of Alaskan economic life is felt by each of us. Simply put: the size of our collective economy is smaller, therefore, the opportunity to achieve individual prosperity is lessened. Even more simply: we Alaskans are becoming poorer; demonstrated by the statistical fact that Alaskan's average income has receded from amongst the highest in the nation to barely the national average.

And so, we may conclude that, while our resources and the attendant wealth are intact, our ability to control the amount and flow of wealth from our resources is not. Succinctly put, the reasons for our economic predicament are:

• We have lost control of our fishing and timber basis to market and political forces beyond our influence,
• We have lost control of our oil and gas resource base to corporate entities, which have no choice but to serve their own interests,
• We have not designed our transportation infrastructure to allow for economic growth and diversity, and
• We do not have in place a fiscal system that connects economic growth to state revenue, and thereby sustainable economic growth.

The first of this combination of reasons for economic stagnation is, and will remain, beyond our ability to control in the near term. However, the remaining three are within our ability to correct. Here's how:

• Our oil and gas resources are leased not sold. Lease language is written by the State. It must be re-written to require both oil and gas production, and to not allow continued warehousing of resources.
• Our transportation infrastructure must be built parallel to an Alaskan vision that provides economic growth opportunities for all of us, throughout this century and into the next. That vision must include:
  
  
1. a natural gas transportation system; which will ensure free enterprise, by guaranteeing competitive access,
2. connecting ourselves to the continental rail system,
3. a road system connecting Alaskan communities and,
4. a world class deep-water port connecting us to world bulk commodity markets.
   
   
• Our budget need be balanced and a mechanism must be put in place to sustain balance. This will require:
  
  
1. Constant spending vigilance
2. A broadly based tax
3. Utilization of some earnings of the permanent fund, and most importantly, an over-riding emphasis on;
4. Economic growth.

Yes, we Alaskans should be optimistic. Our future can be bright and prosperous. We have an enviable array of opportunities. However, our ability to make opportunity become reality is directly related to the intangible components which will define us; our strong work ethic and our collective can-do spirit. As a part to that can do spirit, we must insist that our legislature and governor have the vision and fortitude to boldly move us forward. It is time we Alaskans define ourselves: we are winners; let's act like it.

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