Washington View: When Alaska prospers, Puget Sound follows suit

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photoDon Brunell recently retired as president of the Association of Washington Business.

The 1896 Yukon gold rush triggered a boom for Seattle as prospectors flocked to ships bound for Alaska. In 1968, ARCO found black gold — oil — on Alaska’s North Slope around Prudhoe Bay, triggering a boom for Tacoma’s port, where equipment was loaded onto ships and barges set off for our 49th state.

Today, Alaska Gov. Sean Parnell (R) is launching a campaign to bring more business to his state. Parnell, who served as Sarah Palin’s lieutenant governor, has been traveling the country telling people that Alaska is open for business. He says his state is a good place to invest, and he and the legislature are determined to make it even better.

One of the stops on Parnell’s whistle-stop recruitment tour was Tacoma, where he recently told a packed house at the Tacoma Transportation Club that Alaska’s doors are open for more Puget Sound business. Cargo moving to and from Alaska accounts for more than 100,000 jobs in Puget Sound and some $3.8 billion in goods and services annually. Cruise ship and airline traffic create thousands more jobs and additional billions in revenue.

The Port of Seattle estimates that each Seattle-based cruise voyage nets the city $1.9 million, as passengers eat, shop and rent hotel rooms, and vessels stock up on supplies and pay for services such as unloading and trash disposal. But the Port expects to see about 62,350 fewer cruise visitors this year, a $53 million drop in income for the City of Seattle.

While the weak economy is mostly to blame, part of the problem was Alaska’s “head tax,” a per-passenger surcharge assessed on cruise ships calling on Alaska’s ports. Because the tax increased cruise prices, it caused Holland America and other cruise lines to curtail their Alaska-bound cruises. In effect, the 223 ships leaving Seattle dropped to 195. Alaska responded by lowering the tax.

That, noted Parnell, was just the start. While other states struggle with the stalled economy, Parnell says Alaska has lowered business-related taxes and streamlined permitting processes to attract more business.

Energy development

Alaska is feeling the impact of an uncertain national economy, dwindling federal funds and declining oil production taxes. To keep the state fiscally sound, Parnell vetoed over $400 million in spending from the state’s $11.4 billion budget last year and set spending targets to help the state deal with the lean times ahead. At the same time, Parnell increased the state’s budget reserves to $3 billion, partly to help stabilize education funding.

Parnell stresses the need for future energy development, and his budget includes more than $1 billion for energy projects, including hydroelectric generation and transmission, renewable energy grants, weatherization, home energy rebates and power cost equalization.

When asked if his initiatives would foul the environment, he said, “We live in Alaska and are not about to dirty our nest. In fact, we have some of the strongest environmental protections anywhere on the North Slope and I’d bet there is more contamination on a city street or parking lot in the lower 48. When a vehicle stops, a mat is placed underneath it in case it is leaking. That’s how clean we keep our environment. ”

Parnell wants to stimulate oil and natural gas production and plans to lower taxes to make its oil and gas more competitive worldwide. He says the pipelines, pumping stations and operations centers are already in place, and Alaskans have the knowledge and technology to ramp up domestic production — much of which comes to Washington’s refineries, where it creates jobs for our residents.

The good news is Parnell and Alaskans are looking to the private sector to create new jobs. Parnell’s pitch to Tacoma business leaders is simple and straight forward: “Bottom line, when Alaska prospers, the Puget Sound prospers.”

Don Brunell is president of the Association of Washington Business, Washington state’s chamber of commerce. Visit http://www.awb.org.