• Possibly losing a large number of military personnel and dependents from Fairbanks and the Anchorage area.
• Half of the National Petroleum Reserve - Alaska deemed off limits for oil exploration.
• Virtually all of the Arctic National Wildlife Refuge managed as Wilderness.
• Oil at $50 per barrel.
• A budget based on $120 per barrel oil.
• A gas pipeline ten years away, if we are lucky.

It appears that there has been a steady stream of bad news for Alaska in the past six months. What should we as a resource organization do to ensure that our economy in Alaska thrives during these most difficult times? What type of policies should we encourage those that see themselves as leaders in our political arena that will encourage a strong economy?

There are several messages we can send in both our actions and our words to our employees,our neighbors and our leaders. First and foremost: Don’t hurt all aspects of the private sector in order to sustain the current role of government. Leaders at all levels of all governments, local and state, must look at the economy as a whole as they make difficult decisions on cuts and taxes. They must avoid the trap of simply taxing the business community to meet short-term goals of getting enough cash to pay the bills for a short period of time. The marketplace in all industries in Alaska will respond accordingly, and those taxed industries will simply shrink, and the overall problem that the government is facing will still not be addressed, but now will have fewer private sector jobs and less private sector investment in Alaska.

We will have to be smart as a state in order to weather the storm we have encountered. While it will require that tough choices must be made,as Alaskans we have made tough choices before.

We created the Permanent Fund in order to turn a nonrenewable resource into a sustainable fund. After the crash in the 1980s, we created the Constitutional Budget Reserve (CBR) so that we did not fall victim to the short-term vagaries of the oil market. We have steadily tried to add value added processes to industry. Some of these have worked better than others, but the eye of the people of Alaska is always on the prize of trying to get more out of our natural resources.

Historically, the state has gone back and forth with respect to treating private sector investors as partners or adversaries. Now more than ever, we need to treat investors of all kinds as welcome partners. As discussions come forth on the subject of tax policy towards the private sector, we must keep some fundamental rules in mind. If we tax the fishing industry, we will get fewer investments in fishing boats, processing plants, and the associated effects of that industry. If we tax tourism, we will get fewer tourists, and the associated downside of the fewer dollars they spend with local businesses and government tax revenues. Higher mining taxes leads to fewer mines.

While some extreme environmental groups may see a declining private sector in Alaska as a good thing, an overwhelming percentage of the public will not. Donations to non-profits will decline if taxes go up, and the services they provide to the community will have to then be borne by a governmental entity. This is not a good cycle to be caught up in.

RDC and our members certainly want to be part of the discussion, but we do not want to be the only ones at the table.

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