Remarks of Anchorage Mayor Mark Begich
Fairbanks Chamber of Commerce
Noon; November 1, 2005; Westmark Hotel

Thanks, Marilyn Romano.

It’s an honor to be back here in Fairbanks. I was here a little over a week ago for the AFN conference. Fairbanks certainly deserves congratulations for hosting an excellent AFN convention. I heard very favorable reviews of your hospitality.

And I appreciated the sentiments expressed by the Interior mayors - that we Alaskans are one large family, and must work together for the benefit of all of us.

Speaking of mayors, I hope you’ll excuse me a quick moment to settle a debt. Last hockey season, egged on by the News-Miner, Mayor Thompson and I entered into a friendly little wager. The loser of the Governor’s Cup would buy the other lunch.

Now, I know Mayor Thompson is out of town – I’m sure it’s not in some warm location down south. But I wanted to cover his next lunch at the Chamber, so I’m leaving this.

I seem to recall another small provision in that bet – something about the loser wearing the jersey of the opposing team. As fellow politicians, Mayor Thompson and I like to be on the right side of every issue. So I’ve got the perfect solution.

After losing four years in a row to the UAF Nanooks, Chancellor Maimon assures me this is UAA’s year.

(Power Point Slide 1: Cover)
Thanks to the Fairbanks Chamber for providing this forum. Today, I wanted to continue on that theme we mayors addressed at AFN – that cooperation across borough boundaries and political parties produces benefits for all the citizens of our state.

That’s certainly the case in my community. And it’s so, I believe, because for the most part we’re trying to put aside political differences and working together.

I’ll touch on several areas of cooperation between our regions, including tourism, transportation, air cargo and economic opportunities in rural Alaska.

(Slide 2: scenics)
Overall, I believe prospects are extremely bright for our regions and state as we enter the 21st century.

At the same time, there are several storm clouds forming. I believe these are serious threats to progress in the Railbelt region we share in common, to rural Alaska where we have mutually reliant relationships, and to our entire state. Those include an energy crisis in the Railbelt and an economic crisis in our rural communities.

Inaction by our state – which I believe each of us can, and should, influence – jeopardizes Alaska’s continued prosperity.

First, the good news. Down in Anchorage, we like to say our city is poised for greatness. 

(Slide 3: listing of kudos)
It seems almost weekly that another national publication names us one of America’s top cities to do business, raise a family and retire.

The latest was “Business Development Outlook” magazine, which pronounced Anchorage America’s “best place for a thriving economy.” This comes on the heels of U.S. News and World Report declaring us America’s Number 3 retirement destination. And even Men’s magazine named Anchorage one of America’s “happiest” cities.

(Slide 4: Anchorage stats)
Anchorage is currently in our 17th consecutive year of economic growth, with 2,100 new jobs projected this year alone. And Standard and Poors just improved its economic outlook for the city from “stable” to “positive.”

Anchorage voters proved they share this optimism in our city election this past April.

(Slide 5: Ballot successes)
For first time in about 20 years, they approved every single proposition on the city ballot - six out of six - including:

• A new $93 million civic and convention center,
• A $100 million expansion of our museum,
• Nearly $50 million worth of road improvements, and
• Property tax relief.

I mention these developments because I believe they’re evidence of what’s possible when a community, a region, or a state - works together. That’s been the theme of my administration in the two and half years I’ve been mayor. And I believe cooperation should be the mission of our broader relationships across municipal, borough and village boundaries. There are many examples already.

(Slide 6: tourism)
A bright spot for all of us is the visitor industry. Each year, Alaska benefits from the 1.7 million or so tourists who visit our state.
About 900,000 of them visit my community, leaving behind more than a billion dollars in economic benefits.

Here in Fairbanks, I understand the tourism industry has been growing at a healthy clip – your bed tax revenues were up nearly 10 percent last year - and brings close to half a million visitors here annually.

I know our visitors’ bureaus work cooperatively on joint tourism promotion. Like hosting a hundred travel writers last May, and national exposure for both of us through last fall’s Celebrity Sports Invitational.

(Slide 7: transportation)
Another area ripe for regional cooperation is transportation. A good model is the Regional Transportation Planning Organization we currently have with the Mat-Su Borough.

Our elected and transportation officials, including the State, meet quarterly to discuss key issues from port developments, roads, the Knik Arm crossing and state and federal funding. I know this is especially critical to Mayors Whitaker, Thompson and Jacobson because of recent congressional action.

It surprised all of us to hear that congressional transportation earmarks apparently are counting against our normal federal highway allocation.

For Anchorage, this means a drop from 42 million-dollars last year to just 17 million this year. I understand Fairbanks is looking at half of last year’s amount – down to about 4 million-dollars.

We’ve got to continue focusing on the meat and potatoes of our transportation system – local roads. I’ve already asked Congressman Young for his help.

(Slide 8: airport)
Another enormous opportunity for both of us is our international airports. One in nearly nine jobs in Anchorage depends on doing business with the rest of the state.

Fairbanks certainly is a major part of that. We happily export most the jet fuel produced in this region by Flint Hills which is shipped south on the Alaska Railroad. We sell that fuel in the 600-plus cargo planes which operate through Anchorage weekly.

(Slide 9: China trade)
Alaska’s exports will grow dramatically as trade between Alaska and the Pacific Rim booms. Of about 100 new flights from China headed to America, 62 will land in Anchorage. That means enormous opportunities for business and other relationships for both of us.

Several organizations in our community, including UAA and our Economic Development Corporation, are exploring new initiatives in China. We’d welcome a partnership with Fairbanks in this area.

(Slide 10: urban/rural)
Another area of vital cooperation easily overlooked is the mutually reliant relationship between urban and rural Alaska. Everyone in this room knows that much of what’s good for Alaska’s cities comes from rural Alaska – both in terms of natural resources and our rich cultural diversity.

As we in the urban areas benefit from the wealth produced by Native organizations and rural communities, I believe we have an obligation. To open the doors of our community to rural residents. To stand arm-in-arm for fair and equitable state and federal policies and funding.

I commend Fairbanks on your efforts to seek closer ties to the Kotzebue area, which we recently read about.

I ask you to join me with another initiative as the Legislature gears up for another session.

(Slide 11: rural villages)
In just the past year or so, nine of our neighboring rural communities already have ceased day to day operations. Eighteen more are having serious enough financial problems to be considered insolvent.

And another 39 communities are having severe financial troubles, forcing the elimination of essential services – police, water and sewer, basic administration.

To me, this is unacceptable in one of America’s richest states - a state with more than 32 billion-dollars in savings. Especially in a year when record high oil prices have created a surplus of a billion dollars or more.

It’s shameful that Alaska is one of the few states in America that doesn’t directly share the state’s wealth with communities.

Anchorage absorbed the 11 million-dollar hit to our budget a few years ago when the Legislature eliminated revenue sharing. I understand Fairbanks lost more than two and a half million.

It wasn’t easy for us, but at least we have the tax base to make it work. But the impact on rural Alaska has been devastating. And the fallout will soon land on the doorsteps of those of us in Alaska’s urban areas.

Building on the good work of Alaskans like Wally Hickel and the late Jay Hammond, I believe we must devise a community dividend.
Tie it to the fluctuating price of oil. When it’s high, we all share a portion of the state’s wealth. When it’s low, we get a lot less.

The Alaska Conference of Mayors will be taking up this issue when we gather in Anchorage next week for our annual pre-legislative session conference.

(Slide 12: energy)
As I mentioned earlier, I believe there’s another dangerous threat to our future economic good health. That’s a pending energy crisis. Hard to believe in Alaska, America’s energy storehouse.

My region has long been blessed with a cheap, abundant source of natural gas from Cook Inlet. This has warmed our homes and fueled our businesses for a couple of generations.

(Slide 13: gas production)
Now, gas production from Cook Inlet is falling and known reserves are not sufficient to meet current demand – residential, commercial and industrial needs - beyond 2009, at best.

We saw just the tip of that iceberg with the Agrium fertilizer plant on the Kenai.

At the same time, natural gas prices are rising for all users dramatically. Up 17 percent in just the most recent hike.

Here in the Interior, while you benefit from affordable electricity produced with Usibelli coal, your energy prices have risen because you’re not blessed with readily available natural gas.

(Slide 14: gas development)
I believe a critical question facing Alaskans is: where will our future energy supplies come from, and at what price?

Extremely high energy costs will reduce our attractiveness to new business and industry. Or cost us existing industry. Economic development would be further hindered by the uncertainties over future energy supplies.

We’ve been looking at this issue for months. I have a Mayor’s Business Development Council which has produced a White Paper on the issue.

The time for study is past. The time for action is now. We must get North Slope gas to Alaskan homes, businesses and industries.

I commend Mayor Whitaker for keeping this issue in the public’s eye.

(Slide 15: gas development goals)
I believe any development of North Slope natural gas must achieve three goals most Alaskans agree on when it comes to developing this resource owned by all Alaskans:
• Alaska hire;
• Opportunities for Alaskan-owned businesses; and
• A fair share of revenues for Alaskans.

The state administration seems focused on the billions in taxes and royalty revenues over the life of a natural gas pipeline. That’s all well and good, but very little of that money comes to this community, to my community or to hundreds more across our state.

It doesn’t finance a village public safety officer in Selawik. It doesn’t cover the cost of bulk fuel in Anvik. It doesn’t pay for worker’s compensation in Yakutat.

I care a lot less about which route a pipeline goes from the Slope, as long as it meets this bottom line: deliver gas to my community. And to this community. And to hundreds of others across our state.

All the tools are in place – federal incentives, state laws, adequate demand. The time’s past to stop talking and start building.

(Slide 16: concluding scenic)
As I hope is obvious, I’m bullish on Alaska’s future. If we keep our eye on the future, set aside our differences and believe in the possibilities of cooperation across our regions and state, what we can accomplish together is limitless.

Thank you. 

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