The University of Alaska's Institute of Social and Economic Research (ISER) has released a new report by Scott Goldsmith - an economic base analysis of Alaska's economy: Structural Analysis of the Alaska Economy: What are the Drivers?
The Federal government (direct and indirect impacts) accounts for about a third of resident employment and 40% of resident personal income. Petroleum is next, with about 30% of resident employment and almost 30% of income. Seafood, mining, timber, agriculture, tourism, air cargo, and other manufacturing and services account for about 30% of employment and about 20% of income. Retirement and non-earned income accounts for the rest.
Given the importance of the Federal government, it's reasonable to ask, How Vulnerable Is Alaska’s Economy to Reduced Federal Spending?, as Goldsmith did in an ISER policy piece last July:
About a third of all jobs in Alaska can be traced to federal spending here—and over the past
decade the rapid increase in federal spending drove much of the economic growth. Federal
spending in Alaska more than doubled between 1995 and 2005, and in 2006 it was $9.25 billion.
But now federal spending here has stopped growing, and many Alaskans are worried that the
economy is vulnerable to spending cuts as the federal budget tightens. This analysis estimates
that Alaska could be vulnerable to federal spending cuts in the range of $450 million to $1.25
billion—which could cost the economy anywhere from about 7,000 to 20,000 jobs in the future.
Alaska's senior senator, Ted Stevens, who was not reelected this fall, has had considerable clout in the Senate appropriations process for many years, and is widely credited with bringing home large sums of money home to Alaska (Alaska gets $1.91 back for every $1.00 in Federal taxes;It helps to have a Senator on the Appropriations Committee).
Now Alaskans are asking (along with Richard Mauer and Erika Bolstad): Will Alaska pay price for ousting Stevens? They went back to Goldsmith, to see what he had to say:
Goldsmith was able to correlate Stevens' rise to the chairmanship of the Senate Appropriations Committee in 1998 with an increase in the shipment of money to Alaska.
"It's a pretty dramatic jump," he said.
Through the 1980s and 1990s, Alaska generally got 30 to 40 percent more money per capita than the nation as a whole.
When term limits forced Stevens out of the appropriations chairmanship in 2004, he held on to the defense appropriations subcommittee and took over as chair of the Senate Commerce Committee. Appropriations to Alaska remained high, Goldsmith said.
Now, if Alaska must return to 40 percent above average, about $900 million would be lost to the economy, Goldsmith said.
"That would be a significant drop -- that would be like losing 10 percent of our federal dollars."...
alaska does a lot for this country. The fishing is a big part of the economy.
Posted by: oilfield equipment | April 05, 2009 at 06:22 PM