It’s often said we study history so as not to repeat mistakes of the past. But we learn from success stories, too. Unless, that is, we’re choosing selective shorts like Julie Anderson did in her speech last week about growing the economy.
Anderson is the new commissioner of the Alaska Department of Commerce, Community and Economic Development. She told her Chamber of Commerce audience that we should look to the challenges Alaskans overcame during “pre-pipeline, honey bucket days” to find “the type of skills we need to turn the economy around.” And she suggested putting those to work will create “jobs that generate that first dollar, the primary dollars, that are then the building blocks of the service economy, of health care and education.”
No doubt it took a lot of hard work and ingenuity to overcome many of the obstacles people faced in Alaska’s pioneering days. But no one solved the honey bucket problem without government funding. And it’s still a problem in some rural communities. Which is why U.S. Sen. Dan Sullivan, R-Alaska, sought to add more than billion dollars to the reauthorization of the Water Resources Development Act.
It was government funding that built Alaska’s schools, too. Yes, revenue from North Slope oil played a major role. But that’s only because our Constitution’s “common use” clause required the oil companies pay the state a royalty for extracting our natural resource wealth.
The logging of the Tongass National Forest is a similar common use story. Those lands and their wealth of trees belong to the people. Under the Twenty-Five Percent Fund Act of 1908, the federal government paid the state 25 percent of the receipts taken in from the sale of timber. The law required those funds be dedicated to public schools and public roads.
That well dried up when the pulp mills in Ketchikan and Sitka closed 25 years ago. In its place is Secure Rural Schools, a federal program that provides millions of federal aid dollars to help districts impacted by diminished timber sales revenues. Sullivan has fought to keep that money coming into the state too.
The original payments were just one of the indirect financial benefits Alaskans received from logging on the Tongass. The other, and bigger, came from the local economies spun off jobs created and sustained by government subsidies.
After President Theodore Roosevelt created the Tongass in 1902, the U.S. Forest Service began offering long-term timber sales conditioned that a pulp mill be built. It took four decades to find the right government incentives to make it happen.
The $54 million pulp mill was built by Ketchikan Pulp and Paper Company, a subsidiary of Puget Sound Pulp and Timber and American Viscose. Territorial Gov. B. Frank Heintzleman called it “the largest single industrial investment ever made” in Alaska. Almost 1,000 people were employed during construction, 500 found year-round jobs once it opened, and about 2,500 new residents moved in the area.
And after signing a similar contract, the Japanese-owned Alaska Pulp Company built a mill in Sitka that employed more than 400 people. Sitka’s economy took off too.
But neither mill could sustain operations without government subsidized timber sales. How much is debatable. But one regional forester justified them as part of the “Forest Service’s role to help provide an economic base.” And comparing them to federal farm and tobacco subsidies, an industry attorney said it’s a way “to keep jobs in the American economy.”
I’m not arguing for reviving large-scale logging of the Tongass as a jobs program. But it certainly lifted the region’s economy at a time when Alaska was struggling to get on its statehood feet and the rest of America was booming.
The main point is imagining our economy can grow entirely on the back of small business startups, no matter how creative they might be, is pulp fiction. Like the early 20th century magazines that gave us that term, it’s an elaborate cover on top of a cheap fantasy.
What we need from our leaders is an honest reading of how the public and private sector have collaborated to improve Alaska’s economy. Government spending has been and will always be part of that story. And sometimes it’s the source of the first dollar that gets it moving.
• Rich Moniak is a Juneau resident and retired civil engineer with more than 25 years of experience working in the public sector. He contributes a weekly “My Turn” to the Juneau Empire. My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire.