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Leery of Washington, Alaska feasts on its dollars

PALMER, Alaska – Backed by a blue row of saw-toothed mountain peaks, Republican state lawmaker Carl Gatto finds himself on a fine roll.

Roll it back, he says, roll back this entire socialistic experiment in federal hegemony. Give us control of our land, let us drill and mine, and please don’t let a few belugas get in the way of a perfectly good bridge.

"I’ve introduced legislation to roll back the federal government," he says. "They don’t have solutions; they just have taxes."

And what of the federal stimulus, from which Alaska receives the most money per capita in the nation? Would he reject it?

Gatto, 72 and wiry, smiles and shakes his head: "I’ll give the federal government credit: They sure give us a ton of money. For every $1 we give them in taxes for highways, they give us back $5.76."

He points to a newly graded and federally financed highway, stretching toward distant spruce trees. "Man, beautiful, right?"

Alaskans tend to live with their contradictions in these recessionary times. No place benefits more from federal largess than this state, where the Republican governor decries "intrusive" Obama administration policies, officials sue to overturn the health care legislation and Sen. Lisa Murkowski, a Republican, voted against the stimulus bill.

Although its unemployment rate sits at just 7.9 percent, about 2 percentage points below the national rate, Alaska has received $3,145 per capita in federal stimulus dollars as of May, the most in the nation, according to figures compiled by Pro Publica, an investigative website. Nevada, by contrast, has an unemployment rate north of 14 percent and has received $1,034 per capita in recovery aid. Florida’s jobless rate is 11.4 percent, and the state has obtained $914 per capita.

Alaska has pension and budget woes, and, more perilously, oil production is slumping. But its problems are not mortal; last year, the ax fell on new police headquarters and replacement Zamboni blades rather than on teachers and libraries. And the state has avoided the unemployment devastation visited on the Lower 48 in part because federal dollars support a third of Alaskan jobs, according to a University of Alaska, Anchorage, study.

Not that this has assuaged the anti-government rancor. The one congressman from Alaska, Republican Don Young, denounced the stimulus as appalling, done under the cover of night and without full disclosure. He also promised Alaskans that "if there are earmarks, we will have our fingerprints on them."

(Curiously, that pattern also plays out in Louisiana, Wyoming and the Dakotas, states relatively low in unemployment but high in per capita stimulus, federal aid and growling anti-government animus.)

Sitting in valleys rimmed by mountains, glaciers and a vast alluvial delta, Matanuska-Susitna Borough, with its 83,000 residents, is a sub-Arctic suburban district north of Anchorage. Its largest city, Wasilla, is home to Sarah Palin. A year ago, while still governor, she took a stab at rejecting $28.6 million in federal stimulus for weatherization. As Alaska incurs a notable winter, Republican and Democratic state legislators overruled her and accepted the money.

Matanuska-Susitna Borough officials received about $111 million in federal stimulus, according to Pro Publica. There was $28 million for schools, $25 million for highways and $900,000 for a park-and-ride lot for commuters heading to Anchorage

(Wasillans have a practiced eye for federal dollars; when Palin was mayor, she hired a lobbying firm that reeled in $25 million in federal earmarks for a city of fewer than 7,000 residents.)

Fairbanks, Alaska’s second-biggest city behind Anchorage, pulled in more than $4,000 per capita in stimulus aid, including tens of millions for schools. But Jay Ramras, a Republican state representative from Fairbanks who is seeking the nomination for lieutenant governor, says he feels a tug of suspicion as he looks at that cash.

"If you want to feed us federal money like it’s a narcotic and make the state into a junkie of the U.S. Treasury, OK," he allows. "But we would like to be an Emersonian Alaska and just get control of our resources."

Here is the cognitive dissonance. More and more Alaskans, particularly of the Republican stripe, identify the federal government and pork-barrel spending as the enemy, although Alaska was built by both.

Alaska’s appetite for federal dollars has always been voracious and even today is not confined to the stimulus. A study by Professor Scott Goldsmith of the Institute of Social and Economic Research at the University of Alaska, Anchorage, noted that an "extraordinary increase" in federal spending drove the state’s pile-driver growth of the past 15 years.

In 1996, Alaska’s share of federal spending was 38 percent above the national average. Thanks to the pork-barrel politics of the late Republican Sen. Ted Stevens, who was chief of the Senate Appropriations Committee for several years, and to the military, which keeps expanding its bases here, Alaska’s share now is 71 percent higher than the national average.

Some of this owes to the expense of serving Alaska’s rural reaches. But much is bred in the bone. The federal government expended great amounts of money carving this young state out of the northern wilderness, and officials here learn to manipulate federal budget levers at a tender age.

Still, many in the state see strings attached. Lynn Gattis, a state Republican Party official, lives by a lake in Wasilla, surrounded by aspens. She is a sourdough Alaskan, meaning she was born here, and she is a pilot, which means she threads her way around those cloud-hugging peaks. She knows that the federal government paid for the port of Anchorage, the highway that leads to Wasilla and a portion of the sewers that allowed Target and Sports Authority to take root.

But she sees a government that delays oil exploration, as President Barack Obama did recently; that regulates timber and salmon harvests and hydropower; and that, in her view, cares more about polar bears than about Alaskans. (The government lists as endangered the beluga whales of Cook Inlet, a vast gray expanse that stretches out from Anchorage. Some Alaskans argue that this could stall construction of a multimillion-dollar bridge, which as it happens would be paid for by the federal government.)

"It just feels like the federal government intrudes everywhere," Gattis said. "Enough Ivy League lawyers – let’s get people who can dig a mine and run a business."

This sentiment baffles Tony Knowles, a long drink of a man who worked on the North Slope oil rigs before becoming the governor of Alaska in 1994 as a Democrat. He understands the frustration that comes with bumping into federal officials at each turn. But the trade-off is not so terrible, he notes, such as having the feds pay to put broadband in Alaskan villages.

"Nobody likes to have all their eggs in one basket, and so you do feel vulnerable," he said. "But Ted Stevens, who was a Republican and beloved, was never shy about bringing money in."

Some Alaskans have made a founding narrative of their sense of grievance.

"Before statehood, when a distant federal bureaucracy managed our resources, Alaskans experienced devastating economic effects," Gov. Sean Parnell, a Republican, says on his website.

Alaska became a state in 1959. The historical record is a bit more complicated. Federal construction dollars, fishing and timber sustained Alaska until the discovery of oil in the 1960s. Victor Fischer, who helped write the state constitution in the 1950s, shrugs.

"There’s all this verbiage that says we’re the frontier, rough and ready," says Fischer, lithe and sardonic in his mid-80s. "The feds paid for everything, but the conflict runs through our history."

Unemployment rose as the great recession blew through, although state residents still pay no sales or income tax. As an editorial in The Anchorage Daily News noted, Alaskans pride themselves on a libertarian ethos but the state makes so much money from the oil companies that it sends every man, woman and child a dividend check each autumn.

The check this year will be about $1,300.

Still, uneasiness is palpable here, and perhaps it accounts for the political anger in the air. Oil production, the state’s lifeblood, is winding down. Federal dollars of the nonstimulus variety have slowed, too.

All of which tends to reinforce that Alaska remains much as it was 50 years ago, dependent on drilling, mining and federal aid. The sense of history repeating itself is disquieting.

When Goldsmith looks out his window, he sees more office buildings than in the past, a hint of high tech. But the landscape – the snow-capped volcanoes and vast waters of Cook Inlet – is overpowering.


"Californians wait for a new entrepreneurial wave to lift them," Goldsmith says. "For us, the traditional extraction economy still rules."

That is why, he adds, "historically, we take whatever largess comes our way. A federal dollar is a good dollar."


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