Remarks of Anchorage Mayor Mark Begich
Fairbanks Downtown Rotary Club
Noon; Oct. 25, 2007; Fairbanks Westmark Hotel

Thanks, Jeff Cook. Appreciate that introduction and thanks for your service to this community and state.

It’s good to be back in Fairbanks.

Earlier today, I had the opportunity to join Mayors Whitaker, Thompson and Isaacson in addressing AFN. Fairbanks certainly deserves congratulations for hosting another excellent AFN convention.

Thanks to the Fairbanks Downtown Rotary for providing me this forum. As in Anchorage, I know this Fairbanks’ cream of the crop, so I appreciate the Rotary accommodating us.

Today, I want to underscore some of the themes of cooperation we mayors discussed this morning at AFN.

Increasingly, I believe Alaska’s communities are key to our state’s prosperity: both our economic well-being and our rich cultural diversity.

Across the board - from climate change to the meth epidemic, from creating economic opportunities in our rural villages to devising an energy policy – Alaska’s communities are working together and setting our state’s agenda.

Yet, I sense a growing frustration across Alaska. The state is enjoying record surpluses from 80-dollar oil and sits on a 40-billion-dollar saving account.

But in towns and villages across the state, crime is on the rise, our schools are hard-pressed to make ends meet and many rural communities are disintegrating. We’ve got to do better.

In Anchorage and Fairbanks, we’re enjoying nearly 20 years of continued economic growth, low unemployment and both our economies are increasingly diversified, which better protects us from the boom and bust cycles of a generation ago.

At the same time, I see storm clouds forming which pose serious threats to our progress. These include an energy crisis in the Railbelt and an economic crisis in our rural communities.

First, the good news. Every summer in Anchorage I appear before our Chamber of Commerce to give what we call the State of the City report.

I know you’ll be shocked to hear that for each of the past four years, I’ve pronounced the state of Anchorage as excellent. I’ve brought extra copies if you want to see for yourself.

We’re enjoying the most aggressive building boom in a generation, lower property taxes for most, and improvements to roads, buildings and parks from Eagle River to Girdwood.

2006 set a record for the second highest value in building permits ever – topping $800 million. That includes 70 projects valued at more than a million dollars and a dozen exceeding 10 million dollars. These are significant investments for our community.

Anchorage voters have shown their confidence in our community when in both 2004 and 2006, they approved every single proposition on the city ballot.

That’s the first time that’s happened in 20 years, and includes millions in bonds to improve roads, public buildings and parks and recreation facilities.

The cornerstone in downtown Anchorage’s revitalization is the new Dena’ina Civic and Convention Center, named in honor of the Native people of our region. It’s now 67 percent complete, with the grand opening set for September ’08 – just in time for next year’s AFN convention.

The Dena’ina Center will be a great venue for local events and will position Anchorage for many lucrative conventions we couldn’t even consider before because we lacked the space.

As we invest in our community, we’re working hard to limit the growth in property taxes used to fund city services. This year, property taxes comprise about 46 percent of the revenues used to provide city services, compared to 59 percent when I took office four years ago.

Thanks to 37 million-dollars from the state over the past two years, the average single-family homeowner is seeing a property tax savings this year of about 363-dollars.

I’m certainly no expert on Fairbanks, but I understand this region is prospering as well:
• Job growth up 23 percent over the past decade;
• The military presence – a backbone of this community – strong and growing;
• A healthy mining industry and booming construction – I see sky cranes all around town.

I believe we can generate even more good news numbers by enhanced cooperation across municipal, borough and village boundaries. There are many examples already.

A bright spot for all of us is the visitor industry. Each year, Alaska benefits from the nearly 2.5 million tourists who visit our state.

About a million 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 hotel/motel room receipts were up nearly 20 percent in the first quarter, bringing in more than $50 million annually.

Let’s keep our visitors’ bureaus working cooperatively on joint tourism promotion.

Another enormous opportunity for Anchorage and Fairbanks 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 import most of the jet fuel produced by Jeff’s company, Flint Hills – about 500 million gallons a year - which is shipped south on the Alaska Railroad.

We sell that fuel to the 15 daily flights between Anchorage and Fairbanks and the 650-plus cargo planes which operate through Anchorage each week.

Speaking of growing business at our airports, let me float an idea - even if it’s a little controversial.

Let’s consider an independent authority to run Anchorage and Fairbanks international airports so we can better shape and implement our vision.

Our airport director does a great job and I’m certain yours does, too. But in reality, our airports are controlled by a Juneau-based state bureaucracy.

I’ve long believed we need to better involve the cities and companies which depend on the good health of our airports, and to insulate long-term decisions affecting these economic engines from state political changes.

While we’re at it, let’s include the city-owned Port of Anchorage in a transportation authority with the airports, so there’s even better coordination on international shipping.

Ninety percent of all consumer goods sold north of Cordova come through the Port of Anchorage, including virtually everything you enjoy here. That’s one reason we’ve got a 400 million-dollar Port expansion underway.

Unfortunately, not all the news is good. Alaska’s rate of sexual assault remains alarming, alcohol continues to plague our communities and meth abuse is at epidemic levels.

Right after this meeting, I’ll be visiting several of your human service agencies and the Food Bank at the Wise Family Center, which receive kudos for providing one-stop services.

On meth, the state Department of Public Safety reports that arrests have doubled and distribution arrests have quadrupled over the past five years. In 2004 alone, 66 meth labs were busted in our state.

We’ve really cracked down on it in Anchorage, but now it’s become especially troublesome in the Mat-Su Valley and Kenai Peninsula.

That’s why a couple of years ago, the Tri-Borough Commission - composed of Anchorage, Mat-Su and the Kenai Peninsula borough mayors – decided to act.

We raised nearly $200,000 and launched a media campaign aimed at young Alaskans, to whom meth is particularly attractive - and dangerous.

The three boroughs each contributed, we received generous contributions from area hospitals and the Legislature, and Fairbanks and Juneau also joined in. I’d like to thank Mayor Whitaker and state Representative Jay Ramras for securing state funds for this vital mission.

For the sake of our youth, we’re got to stay focused on eradicating a problem that threatens our future.

Another area of cooperation is the mutually reliant relationship between urban and rural Alaska. With AFN meeting just down the road, 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 for your efforts to reach out to rural Alaska through the Economic Development Corporation, Visitors Bureau and Chamber. You should be proud of the Morrie Thompson Center as a physical symbol of the bridge-building underway in this community.

Although we in Anchorage are proud to claim title to Alaska’s largest Native village, we’ve too often taken our relations with rural Alaska for granted. We’re committed to turning that around, with our new convention center, outreach to villages and cultural sensitivity efforts across the city.

At the same time, scores of our neighboring rural communities have simply ceased day to day operations, have become insolvent or are forced to eliminate essential services – police, water and sewer, basic administration.

To me, this is unacceptable in one of America’s richest states.

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

We are grateful to the state for the 13.5 million-dollars we received this year as a type of revenue sharing. And I know the 4.4 million-dollars that went to this region was sorely needed.

Yet, the impact on rural Alaska from uncertain and dwindling state aid has been devastating. And the fallout from collapsing rural communities will soon land on the doorsteps of those of us in Alaska’s urban areas.

I endorse the good work of Alaskans like Wally Hickel and the late Jay Hammond who advocated a community dividend or capital matching grants.

You may remember the old capital matching grant program, which operated between 1994 and 2003. It provided up to 20 million-dollars a year for communities to match for basic needs – roads, clean water, public buildings.

What makes the case even stronger now was Governor Palin’s veto of hundreds of millions of dollars in capital projects earlier this year.

Overnight, we lost 81 million-dollars worth of very worthy projects, 26 percent of what the Legislature approved for Anchorage. This area lost 14 million-dollars, about 22 percent of your total.

We’ve struggled since then to find out the types of projects the administration will support. Standing here today, I have no idea because they’re not telling us.

So let’s ask the state to set aside a portion of its enormous oil wealth – I suggest two-billion-dollars - which communities can use as match to meet locally determined needs. That should spin off 200 million-dollars or so annually – far short of the need, but certainly a decent start in the right direction.

As I mentioned earlier, I believe there’s another dangerous threat to our future economic good health - 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.

Now, gas production from Cook Inlet is falling and known reserves are not sufficient to meet current demand – residential, commercial and industrial needs - beyond 2015.

We saw just the tip of that iceberg with closure of the Agrium fertilizer plant on the Kenai and the resulting loss of nearly 300 jobs.

Here in the Interior, your energy prices are rising because you’re not blessed with readily available natural gas, and likely won’t be for years to come.

I don’t see much action by the state to deal with these issues. There’s no state energy policy and none in the works. We seem to be putting all our eggs in the AGIA basket, with no guarantee of a successful applicant.

Meanwhile, extremely high energy costs and uncertainty will reduce our attractiveness to new business and industry. Or cost us existing industry.

Through the Tri-Borough Commission, we’ve been focused on this problem. In cooperation with the Anchorage Chamber, we’re producing our own energy policy for our region.

We believe the cornerstone of Alaska’s energy policy is delivering affordable energy to Alaskan homes, businesses and industries. This mean promoting more drilling in Cook Inlet and building a gasline from the North Slope to Cook Inlet to secure our energy future. It also must emphasize conservation and renewable energy resources. And we must recognize that Alaska is at Ground Zero when it comes to global climate change.

Just two weeks ago, I was pleased to join Luke Hopkins from your Assembly in a presentation to the Legislature’s Climate Change Commission. Our message was simple: Alaska’s communities are leading with policies and specific actions to curb global warming.

In Anchorage, just retrofitting the lights in City Hall will save $35,000 a year. Putting the 3,000 city computer monitors on a “sleep mode” when they’re not in use saves $84,000 a year and cuts carbon emissions the equivalent of taking 251 cars off the road.

Here, I know Golden Valley is a leader in promoting alternative energy, providing consumer incentives to those who want use renewable energy like solar and wind, and supporting the Fire Island Wind Power program. Unfortunately, the Fire Island project was vetoed.

We certainly welcome your participation in development of an Alaska energy policy, and especially of getting the attention of state policy makers.

As I hope is obvious, I’m bullish on Alaska’s future.

Working cooperatively, Alaska’s communities are setting our state’s agenda and improving opportunities for our citizens. Certainly there are challenges ahead, especially when it comes to energy and those facing rural Alaska.

If we keep our eye on the future 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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