An old northland joke describes an Alaska sourdough as someone who has gone sour on the country but lacks the dough to pay for passage to friendlier environments to the south.
And a poll conducted for the Alaska Chamber suggests there might be more than a little truth to the joke these days. In the current economic climate, it found that Alaska old-timers hold the darkest view of where the state is headed while almost two-thirds of newcomers are cheerily optimistic.
A full 65 percent of those who’ve spent nine years or less in-state judge the economy good, Dittman Research reported. Outside the cheechako group, however, optimism faded fast.
A bare majority – 52 percent – of those resident for 10 to 20 years saw the economy as good and for the true sourdoughs – 20-plus years in-country – the number dropped to 43 percent.
In other words, 57 percent of today’s sourdoughs thought the economy had wobbled into the ditch.
Given the poll was conducted back in March, there might be more of them thinking that way now. Dittman pollster Matt Larkin said that tracking polls since spring show views on where Alaska is headed and what is happening with the economy have only worsened since Gov. Mike Dunleavy and the Alaska Legislature went to war over the state budget.
After the Legislature refused to make significant cuts in state spending, Dunleavy vetoed about $400 million from the $5.3 billion state budget. Opponents of the cuts accused him of trying to destroy the University of Alaska, which lost 40 percent of its state funding; doom the sick who take advantage of Medicaid; cripple the elderly; and continue the state’s already three-year-long recession.
“The public hearing that stuff,” Larkin said, “you know how much the economy is about consumer confidence.”
How one views the economy also appears to be colored by politics. Republicans, who supported Dunleavy run for governor in November, are more upbeat about the state than their fellow Alaskans.
Sixty-one percent thought the economy was perking along well back in March while an equal percentage of nonpartisans thought recessionary Alaska sucks. Democrats were in the middle, but leaning toward the latter at 52 percent bad.
Given a margin of error of nearly 4 percent on the poll of 705 likely Alaska voters, that number could be even worse than it looks or split the Dem view 50-50 given that 44 percent thought the economy bad.
Dems represented the largest group of Alaskans undecided on this issue. Four percent of them couldn’t make up their mind. Republicans and nonpartisans all had up or down views.
Those undecided Democrats have likely picked a side since Dunleavy took that big, red pen to the budget in an effort to reduce a state deficit of more than $1 billion.
Opponents of the budget cuts have forecast big time gloom and doom. Anchorage Mayor Ethan Berkowitz, a one-time Democrat candidate for governor, declared a “civil emergency” because of the loss of $5.8 million in state funding for local facilities to help house and feed the homeless.
A statement from the mayor’s office predicted that the cuts – which equal about 1.1 percent of the municipal budget for the year – will spark an “unprecedented housing and public health and safety crisis.”
The Anchorage Economic Development Corporation (AEDC) on Tuesday forecast the cuts will lock the economy of the state’s largest city in recession for several more years. It was just showing the first hints of recovery after three straight years of job losses.
ADEC argued in a prepared statement that “sources of renewal in the economy cannot compensate for the damage being done by Alaska’s ongoing policy-induced recession.”
The belief the end is near runs so deep most media didn’t even try to balance their reporting with the views of economist Ed King, the former chief economist for the Alaska Office of Management and Budget.
Now back in the private sector at King Economics, he pushed back at early July claims of a growing recession emanating from the UA Institute of Social and Economic Research (ISER), an office tied to the state entity taking the biggest budget hit. ISER projected the budget cuts would cost the state 4,217 jobs.
King disagreed and forecast an increase of 800 and then challenged ISER.
“It’s more simple than that. ISER put out a forecast, so I will publish my own. When the data are in, we can compare the results. If I end up being wrong, I’ll own that fact.”
More than state jobs
King agreed with ISER that the budget cuts would cost state jobs, but he predicted an uptick in oil patch jobs as development continues on the Liberty, GMT2, and Pikka, and other projects; continued growth in the tourism industry; a mini-boom in the construction industry thanks to military projects underway in the state; and a slight bump in the trade sector.
He did, however, concede a continuation of the recession is possible. (Some are calling the half percent growth in jobs in the last labor report the end of the state’s great recession, but the half percent is smaller than the margin of error in job tallies.)
“With the vetoes in place, Alaska slips back into a recession in 31 percent of the simulations I ran,” King wrote. “That compares to 12 percent of the simulations with no vetoes. Most of those situations occur due to global economic forces pushing down on growth everywhere or another collapse in oil price.
“So, the most I would be willing to say is that the near-term chances of another recession go from unlikely to possible due to these vetoes. But, that is not a good justification for overriding them.”
How one likes those odds depends on how they like to gamble. There is, by King’s measure, a 3-in-10 chance of a recession with the vetoes and a 1-in-10 chance without. The vetoes double the chances of a continuing recession in this view, but the overall odds remain pretty low.
Dunleavy is so far standing firm on his budget decisions. He Monday attacked continuing legislative efforts to find a way to restore funding for some state programs and especially the University of Alaska, which lost 40 percent of its state funding and accounted for about 33 percent of the entire budget cut.
“The add-backs to spending – to the tune of $400 million – are yet another attempt to blow up the size of government,” Dunleavy said in a prepared statement. “I stand by the decisions made on June 28the and the focus we’ve made on providing a sustainable budget and sustainable systems. These reductions are not meant to harm Alaska or Alaskans, but to turn the corner and make the necessary changes in order to put Alaska on a sustainable path forward.”
North to the future
Alaskans who’ve been here a long time have seen these tussles before. Several governors have pledged to cut state spending when oil prices or oil production fell and along with it the bulk of state revenue which comes from oil royalties and taxes.
Larkin said he can’t be sure why their view is so grim this time around nor why newcomers to Alaska have a far more positive view of the state’s future, but offered a few opinions, starting with the fact most of the cheechakoes are younger and came north in response to a job offer.
“They generally have a more positive, forward-looking view,” he said, while the pessimists comprise an “older demographic, better informed, with a better perspective.”
Or certainly, one shaped by a lot of long, dark winters with weather that can wear on both man and beast. The dark more than the snow, the wind, the rain, the blizzards, the snowpocalypses and the general gloom has a way of taking a little of the shine off the Alaska mystique that colors the view of new arrivals.
As the 41-year-old Larkin, now approaching his 20 anniversary in Alaska observed, “I just remember being blown away with the place. I can identify with those (new) Alaskans.”
They look at the glass, see it half full, and think they’re lucky to be here. The sourdoughs look at the same glass, see it half empty, and wonder why they’re still hanging around.
Historically, the latter didn’t hang on long before bailing either. Alaska’s demographic profile used to look like a pyramid with a lot of young people at the bottom and a few old ones at the time. The days it looks more like the Michelin Man with a big bulge above the middle and an oversize head.
Alaska is the most rapidly aging state in the U.S., Money reported last year “The older population increased by 65.6 percent between 2006 and 2016. There are 77,206 people age 65 and older in Alaska.”
That’s about 10 percent of the population. Alaska’s elder population remains the lowest in the nation, but percentage-wise it’s about five times what it was in 1970. And many in this could-be bounty of wise, old elders – if the polls are to be believed – have morphed into grumpy old and men and women driving the Debbie Downer Syndrome now sweeping the state.