• 2016 Alaska's Construction Spending Forecast

      Goldsmith, Oliver Scott; Cravez, Pamela (Institute of Social and Economic Research, University of Alaska Anchorage, 2016-01-01)
      The total value of construction spending “on the street” in Alaska in 2016 will be $7.3 billion, down 18% from 2015.1,2,3 Oil and gas sector spending will fall 25% to $3.1 billion from its record level of $4.2 billion last year. All other construction spending will be $4.2 billion, a decline of 11% from $4.7 billion last year. Private spending, excluding oil and gas, will be about $1.4 billion, down 24% from $1.8 billion last year—while public spending will decline 6% to $2.8 billion from $2.9 billion. Wage and salary employment in the construction industry, which increased an estimated 6 percent last year to almost 18,000, will decline slightly in 2016.4 The decline in construction spending in Alaska in 2016 can be traced directly to the precipitous drop in the price of oil over the last 18 months, after the previous period of unprecedented high prices a few years earlier. In mid- 2014 the price was above $110 per barrel, but as this report is being written the price has fallen below $30 for the first time in 12 years. Furthermore, the short-term outlook is for the price to remain low, or even decline further, because supply continues to outstrip demand and inventories continue to accumulate. The longer term outlook for price also continues to fall, because of the resilience of production in the face of the falling price. The high price stimulated increases in construction spending across all sectors of the Alaska economy, particularly among oil and gas companies and the state government. The low price is now beginning to reduce construction spending within the economy, except for federal spending and spending by basic industries that benefit from lower oil prices. So far the price drop has been felt most directly in the oil and gas sector. Although many companies announced optimistic investment programs for 2016, most, if not all, have recently announced cutbacks or postponements. The longer the price remains low, the greater the likelihood of further cutbacks in the oil patch. Because of the oil price drop, a deficit of $2 billion opened in the state general fund in FY2014, and it has increased to $3.5 billion for each of the last two years. Although the state has been fortunate to have sufficient cash reserves to offset this revenue shortfall in the short term, it has meant a dramatic decline in new state funding for capital projects. Whereas the general fund capital appropriation in FY2013 was more than $2 billion, in this past year it was only enough to cover the required match on federal transportation grants. And looking ahead, there is very little prospect for a significant increase in the capital budget in the coming years. But the sharp decline in the state capital budget over the last three years has so far had limited effects on construction spending. This is because it takes considerable time for appropriated funds to become “cash on the street.” Several billion dollars of capital appropriations remain “in the pipeline,” which will keep state spending from falling dramatically this year. However, the amount of construction spending will be winding down in many communities like Juneau, Kodiak, and Fairbanks (excluding Eielson Air Force Base) because of declining state spending. Because of the size of the state budget deficit, it is possible that some projects in the pipeline that have not yet been approved could be cancelled. However, this will be moderated by concern over the negative impacts on the economy from such cancellations. Spending for national defense will be higher this year. And fortunately, federal spending not related to defense—mostly consisting of grants, both to the state for transportation (roads, harbors, railroad and ferry system) and sanitation projects and to non-profits for health facilities and housing—is not sensitive to the price of oil. Since 2013 the Alaska economy has underperformed compared with the national average in spite of the stimulus of high oil prices that led to record high levels of employment in the oil and gas and construction sectors. Job growth has been less than 1% annually and is forecast to be negative in 2016. State population has not increased in the last two years. This slowdown, combined with the heightened uncertainty about the future direction of the economy, brought on by the sudden fall in the oil price, will slow new private investment—particularly in the commercial and residential construction sectors as investors adopt a “wait and see” attitude, in regard to both the private economy and the ability of the state government to deal with the deficit. The decline in private construction spending this year is also partially due to the completion of a number of large utility and hospital projects. As in past years, some firms are reluctant to reveal their investment plans, because they don’t want to alert competitors; also, some have not completed their 2016 planning. Large projects often span two or more years, so estimating “cash on the street” in any year is always difficult because the construction “pipeline” never flows in a completely predictable fashion. Tracing the path of federal spending coming into Alaska without double counting is also a challenge, and because of the complexity of the state capital budget, it is always difficult to follow all the flows of state money into the economy. We are confident in the overall pattern of the forecast. However, as always, we can expect some surprises as the year progresses.
    • 2017 Alaska's Construction Spending Forecast

      Goldsmith, Oliver Scott; Cravez, Pamela (Institute of Social and Economic Research, University of Alaska Anchorage, 2017-01-01)
      The total value of construction spending “on the street” in Alaska in 2017 will be $6.5 billion, down 10% from 2016.1, 2,3 Oil and gas sector spending will fall 15% to $2.4 billion, from $2.9 billion last year. All other construction spending will be $4.0 billion, a decline of 7% from $4.3 billion last year. Private spending, excluding oil and gas, will be about $1.6 billion, up 2% from last year—while public spending will decline 12% to $2.5 billion. Wage and salary employment in the construction industry, which dropped by 8.5% in 2016 to 16.2 thousand, will drop another 7.4% in 2017 to 15 thousand, the lowest level in more than a decade.n 2016 the Alaska economy slipped into a recession that is expected to continue at least through 2017. Total wage and salary employment fell in 2016 by 6.8 thousand, about 2%. This year it is anticipated the decline will be 7.5 thousand, or 2.3%, which will return the economy to the 2010 level.5. Weakness in the economy is also reflected in a net outmigration of population over the last four years.
    • 2018 Alaska's Construction Spending Forecast

      Leask, Linda; Goldsmith, Oliver Scott (Institute of Social and Economic Research, University of Alaska Anchorage, 2018-01-01)
      The total value of construction spending “on the street” in Alaska in 2018 will be $6.6 billion, up 4% from 2017.1, 2,3 The increase is due to a recovery in Petroleum sector spending which will grow 15% to $2.6 billion from its low of $2.2 billion last year. All other construction spending will be $4.0 billion, a decline of 2% from $4.1 billion last year. Private spending, excluding petroleum, will be about $1.5 billion, down 5% from $1.6 billion last year—while public spending will decline 1% to $2.5 billion. Wage and salary employment in construction will decline 3% to 14.5 thousand.4 After falling by half in the last two years, spending by the petroleum industry will start to recover because of the rise in the price of oil, and more support for the industry from the federal and state governments.
    • Adapting to Environmental and Social Change: Subsistence in Three Aleutian Communities

      Schmidt, Jennifer; Berman, Matthew (Institute of Social and Economic Research, University of Alaska Anchorage, 2018-04-19)
      Our surroundings and society are both constantly evolving. Some changes are due to natural processes. People are responsible for other changes, because of what we do—for example, increasing the size of the population, expanding technology, and increasing mobility and connectivity. And some changes—like climate change—are due to a combination of natural processes and actions of people. In the Arctic, including the Aleutian Islands, marine and coastal ecosystems have seen the largest number of regime shifts with direct and indirect consequences for subsistence activities, commercial fisheries, and coastal communities (Council 2016). This paper describes current subsistence activities and changes local residents have observed over time in three Aleutian Island communities—Akutan, Nikolski, and Atka. As described more later, we did initial household surveys in 2016 and a second round in 2017, as well as more detailed interviews with some residents.
    • Alaska 1332 Waiver - Economic Analysis

      Bibler, Andrew (Institute of Social and Economic Research, University of Alaska Anchorage, 2016-12-23)
      The four guardrails that a successful 1332 waiver must meet are as follows: 1. Coverage - There must be at least a comparable number of individuals with coverage under the waiver as would have had coverage without the waiver. 2. Affordability – The waiver should not result in an increase in out-of-pocket spending required of residents to obtain coverage, relative to income. 3. Comprehensiveness – The waiver should not decrease the number of individuals with coverage that meets the essential health benefits (EHB) benchmark. 4. Deficit Neutrality – The waiver should not have any negative impact on the federal deficit. In this report, the first three guardrails are briefly discussed to reaffirm that the actuarial analysis conducted by Oliver Wyman demonstrates that the proposed waiver meets them. The actuarial report from Oliver Wyman projects that the proposed waiver will increase the number of individuals taking up insurance in the individual market, lower average premiums, and have no impact on the comprehensiveness of coverage. The numbers reported in the actuarial analysis are then used to help evaluate the impact that the proposed waiver will have on the federal budget.
    • Alaska 1332 Waiver- Economic Analysis

      Bibler, Andrew (Institute of Social and Economic Research, University of Alaska Anchorage, 2016-12-01)
      The four guardrails that a successful 1332 waiver must meet are as follows: 1. Coverage - There must be at least a comparable number of individuals with coverage under the waiver as would have had coverage without the waiver. 2. Affordability – The waiver should not result in an increase in out-of-pocket spending required of residents to obtain coverage, relative to income. 3. Comprehensiveness – The waiver should not decrease the number of individuals with coverage that meets the essential health benefits (EHB) benchmark. 4. Deficit Neutrality – The waiver should not have any negative impact on the federal deficit. In this report, the first three guardrails are briefly discussed to reaffirm that the actuarial analysis conducted by Oliver Wyman demonstrates that the proposed waiver meets them. The actuarial report from Oliver Wyman projects that the proposed waiver will increase the number of individuals taking up insurance in the individual market, lower average premiums, and have no impact on the comprehensiveness of coverage. The numbers reported in the actuarial analysis are then used to help evaluate the impact that the proposed waiver will have on the federal budget. There are at least four ways in which the waiver will have an important impact on the federal budget, which are summarized in Table 1. Table 1: Impact of Proposed Waiver on Budget Direction of Effect APTC Savings + Individual Shared Responsibility Payments - Health Insurance Providers Fee - Federal Exchange User Fees - Overall Impact on Budget + The first and most important impact of the waiver is that it will lead to a reduction in premiums. The reduction in premiums reduces the amount of Advanced Premium Tax Credits (APTC) that individuals will be eligible for and generates savings of $50 - $100 million per year from 2018 through 2026. There are also three routes through which the waiver will negatively impact the budget by decreasing revenue: individual shared responsibility payments, health insurance providers fees, and federal exchange user fees. Because the waiver will lead to more individuals taking up insurance in the individual market, fewer individuals will owe 2 Attachment 4 Alaska 1332 Waiver - Economic Analysis December 23, 2016 the individual penalty for not having health insurance. The health insurance providers fee depends on the amount of premiums aggregated to the national level. Because the waiver depresses premiums in the Alaska individual insurance market, it will have a secondary negative effect on the total amount collected through the providers fee for years 2019 through 2026. Lower premiums also reduce the amount collected in federal exchange user fees, a 3.5% tax imposed on premiums sold through the Federally Facilitated Marketplace. The aggregate impact on the budget is positive, because the APTC savings outweigh the combined negative impact of the other three channels. Table 2 summarizes the aggregate impact of the four components on the federal budget. Year Final Savings 2016 $0 2017 $0 2018 $48,973,684 2019 $52,260,336 2020 $56,108,411 2021 $61,486,732 2022 $65,612,013 2023 $72,213,851 2024 $77,717,467 2025 $84,814,665 2026 $91,785,506 Table 2: Estimated Savings from Waiver (Before Pass-Through Funding) The overall impact through these four components is about $49 million in savings in 2018. Savings increase in every year thereafter, reaching nearly $92 million in 2026. The savings listed in Table 2 are before the granting of any pass-through funding, so they suggest that as long as pass-through funding is less than or equal to these figures, the proposed waiver will meet the federal deficit neutrality requirement.
    • Alaska Fuel Price Projections 2011-2030

      Schwoerer, Tobias; Saylor, Ben; Fay, Ginny (Institute of Social and Economic Research, University of Alaska Anchorage, 2011)
      This report and supporting spreadsheet outline Low, Medium, and High case fuel price projections for the years 2011-2030 for natural gas in Southcentral Alaska delivered to a utility-scale customer, diesel delivered to a PCE community utility tank, diesel delivered to a home in a PCE community, home heating oil purchased in Anchorage, Fairbanks, Juneau, Kenai, Ketchikan, Palmer, and Wasilla. The report provides documentation of the assumptions and methods that are used, while a companion Excel workbook contains the detailed projections.
    • Alaska High School Graduation Rate Trends

      Tran, Trang; Hill, Alexandra (Institute of Social and Economic Research, University of Alaska Anchorage, 2019-08-05)
      This paper examines trends in Alaska public high school graduation rates from academic year 2010-11 to 2015-16 and explores differences across demographic groups. We focus specifically on students from public neighborhood high schools. These are publicly-funded schools run by district or Regional Educational Attendance Area school boards serving all residents within school attendance boundaries. These schools represent about 88% of Alaska’s high school students.
    • Alaska Snapshot: What's Happened to the Alaska Economy Since Oil Prices Dropped?

      Guettabi, Mouhcine (Institute of Social and Economic Research, University of Alaska Anchorage, 2016-11-01)
      North Slope oil has paid for most of Alaska state government—and indirectly, a big share of local government—since the 1980s. It’s also been the backbone for much of Alaska’s economic growth over time. But today, a combination of declining oil production and sharply lower oil prices has left the state budget billions of dollars in the red and is reverberating throughout the economy. How has the big drop in oil prices affected the Alaska economy so far? This paper looks at that question, using changes in the number of jobs— statewide, and also by census area and sector—as a gauge. We look specifically at the period from March 2014, when oil prices were over $100 a barrel, through March 2016, when prices had dropped below $40. We use that period because right now reliable employment data are only available through the first quarter of 2016. Also, this is a broad look at job changes, not a detailed analysis of all the specific changes we found.
    • Alaska's New Petroleum Production Tax

      Berman, Matthew (Institute of Social and Economic Research, University of Alaska., 2006)
      The Alaska legislature enacted a major change to the state system of taxation for oil and gas on August 6, 2006, retroactive to April 1, 2006. The new tax, passed after several false starts in the third special session of the year, would replace a tax on gross wellhead production value of oil and a tax on gross wellhead value of gas with a single tax on net income earned at the wellhead. This article attempts to put the decision in context. It discusses some of the major issues related to oil taxes, summarizes the historical pattern of state petroleum revenues, and considers the consequences of the major features of the current tax proposals. We examine the new PPT in the context of these three big questions, comparing patterns and trends over time in Alaska and relative to other states and nations. There is no perfect tax mechanism, and each question involves a principal tradeoff.
    • Assessment of Services Available for Children Exposed to Intimate Partner Violence in Anchorage, Alaska

      Vadapalli, Diwakar (Institute of Social and Economic Research, University of Alaska Anchorage, 2015-09-01)
      The Cook Inlet Tribal Council (CITC) plans to expand services provided under its Flourishing Child initiative, and requested an assessment of service needs for children in the Anchorage area that are exposed to intimate partner violence (IPV). Specifically, CITC wishes to know if the proposed expansion of Flourishing Child services will satisfy an unmet need in the community. This assessment includes a brief introduction and review of related concepts, and an assessment of services available within the Municipality of Anchorage.
    • Attitudes towards land use and development in the Mat-Su: Empirical evidence on economic values of ecosystem services

      Schwörer, Tobias (Institute of Social and Economic Research, University of Alaska Anchorage, 2014-04-25)
      In communities that largely depend on the extraction of natural resources, attitudes towards conservation and development may seem at odds or particularly rigid. With an unprecedented wealth of natural capital, a growing mining sector, strong oil and gas industry, and a politically conservative population, Alaska serves as a case study to measure such attitudes. This research was motivated by a lack of primary ecosystem service valuation studies in Alaska that could be used to assess the public’s perceived value of ecosystem services in order to guide future land use decisions and incentivize land use decisions that minimize negative externalities. A choice experiment was conducted with 224 households in the Matanuska-Susitna Borough, the fastest growing region in Alaska and one of the fastest growing regions in the U.S. Rapid development with few restrictions has led to changes for local ecosystems particularly important to salmon, negative effects on access related to recreation and tourism, and caused conversion of valuable farmland. Study results show that attitudes and values vary regarding future land use and economic development efforts. On average, policy action to improve conditions for local salmon stocks are most valuable to local residents followed by protecting farm and ranch lands as well as public access to recreation sites. Conversely, residents show negative preferences towards rapid population growth and developing local mining, oil and gas, and timber resources but support developing a professional and technical services sector. The quantified welfare changes related to different development scenarios show that focusing on conserving valuable ecosystem services is in the public’s best interest.
    • Benefits and Costs to Rural Alaska Households from a Carbon Fee and Dividend Program - Final Report

      Colt, Steve (Institute of Social and Economic Research, University of Alaska Anchorage, 2015-08-01)
      This paper analyzes the benefits and costs of a carbon fee‐and‐dividend (CFD) policy to individual rural Alaska households. The three study area regions are the Bethel Census Area, the Kusilvak Census Area, and the Northwest Arctic Borough. These three regions have the state’s highest fuel prices and very cold climates. The CFD policy consists of two elements.  The first is a fee of $15 per metric ton of CO2 beginning in 2016 and increasing by $10 per ton in each subsequent year. The second is the complete return of all fees to households in the form of dividends, which are estimated to equal $300 for each adult plus $150 for each child (up to two). The annual dividends would increase in future years commensurate with the nationwide total amount of fees. Baseline conditions.  The study area has a total population of about 32,000 people, many of whom live in large households with low cash income. Fuel prices averaged $6.62 per gallon in January 2015.
    • Determinants of the Cost of Electricity Service in PCE Eligible Communities

      Foster, Mark; Townsend, Ralph (Institute of Social and Economic Research, University of Alaska Anchorage, 2017-01-20)
      This report is one of two companion reports ISER prepared for the Alaska Energy Authority. The other report, “True Cost of Electricity in Rural Alaska and True Cost of Bulk Fuel in Rural Alaska,” is dated October 26, 2016. That report estimates the full costs of providing electricity in rural Alaska, including the costs of subsidies provided to lower the price consumers pay. This second report assesses how the costs of electric generation in Power Cost Equalization (PCE) communities are or might be affected by three factors that are not related to the differences in electricity generation costs. Those three factors are the organizational structures of utilities, postage stamp rate design, and managerial information available on energy subsidy programs. 1. Organizational Structures of Utilities Electric utilities in PCE communities are organized as cooperatives, are run by local villages and municipalities, or are investor-owned utilities. The scale of these utilities varies widely, and includes regional utilities that manage separate electric grids in multiple communities. A review of those organizational structures indicates that: 1.1. There are significant differences in distribution, customer service, and general and administrative costs (DCG&A) across utilities. These differences are correlated with the utility size and organizational structure, with the smallest utilities having significantly higher DCG&A costs per kWh. 1.2. Small local utilities that have merged with larger regional utilities have benefited from reduced costs and professional management. Incentives to encourage small local utilities to join larger, more efficient regional utilities should be considered. 1.3. The cost of borrowing for large local and regional electric coops remains low compared with that for stand-alone local villages, municipalities, and investor-owned utilities. 1.4. The state government should consider allowing a return on equity as an allowable expense within the PCE cost of service [AS 42.45.110(a)] to enable utilities to build equity, enhance debt coverage and facilitate the expanded use of private capital, and reduce dependency on limited public capital resources. This private capital may take the form of investor capital for investor-owned utilities or member capital for cooperatives. 2. Postage Stamp Rate Designs 2.1. Postage stamp rate designs—a single rate for electricity for some set of customers—can help reduce costs and improve affordability in smaller, remote communities through an implicit cost subsidization from customers in larger communities. 4 2.2. The subsidies in postage stamp rates may decrease incentives for utilities to manage their costs, because higher costs may be subsidized by postage stamp rate-making. 2.3. The increase in cost in subsidy-providing communities risks inefficient bypass by large commercial or government users. This could increase the total cost of electric service and leave the remaining customers with higher rates and diminished affordability. Separating communities into rate groups according to their cost structure may mitigate, but not eliminate, the risk of self-generators bypassing the local electric utility. 3. Efficiency in Governance of Energy Subsidy Systems 3.1. To assess whether the PCE program is achieving its goals, transparent information about the allocation of the subsidies and about the operation of the subsidized utilities is required. The companion report to this one identified some issues about reliability of information generated under the current reporting system. Improvements in the reporting requirements could address these issues. A common issue is inconsistency in accounting for capital that state and federal agencies contribute to utilities. Those capital contributions include both grants or low-interest loans to finance capital projects as well as sources of short-term government financing, such as annual fuel loans, emergency loans, and write-offs of operating loans for troubled utilities. If capital investments for generation were separated from other capital, investments to reduce fuel costs (such as wind power) could be assessed more directly. 3.2. The PCE program is one of several programs that subsidize energy costs in rural Alaska, and an understanding of the interaction among these programs is required. An annual compilation of all state and federal heating and electrical subsidy support systems by community would enable better understanding of both individual program impact and also the collective programmatic impact of the subsidies on energy affordability. 3.3. Information on system reliability, usually measured as outage hours, is required to fully assess utility performance. 3.4. Currently, there is no information on how well the PCE program and other energy subsidy programs in rural Alaska target families and communities that face the greatest energy affordability challenges. Because of limitations on income data in small rural Alaska communities, assessing how well subsidies are targeted may be challenging. However, in light of general information that energy subsidies are often inefficient at poverty reduction, this is an important question. 3.5. The environmental impact of energy subsidies for rural Alaska, including the PCE program, through CO2 emissions and PM 2.5 emissions, has not been assessed.
    • A Doctoral Program in Leadership and Policy Studies: Is It Feasible?

      Killorin, Mary (Institute of Social and Economic Research, University of Alaska., 2002)
      In response to requests from the Alaskan community, the University of Alaska Fairbanks (UAF) agreed to explore the possibility of developing a doctoral program in leadership and policy studies. This program would be developed in collaboration with the University of Alaska Anchorage (UAA) and the University of Alaska Southeast (UAS). The goal of the program would be to prepare Alaska leaders in the fields of education, health and human services, government, and business. The report is organized around the six main questions that respondents answered. Each question has a summary of responses indicated by bulleted themes followed by supporting quotations.
    • Economic Impacts of the Vetoes on the Alaska Economy

      Guettabi, Mouhcine; Klouda, Nolan (Institute of Social and Economic Research, University of Alaska Anchorage, 2019-07-08)
      On June 28, 2019 Governor Mike Dunleavy announced line-item vetoes totaling $409 million from the State of Alaska budget for Fiscal Year 2020. These vetoes include significant cuts to the University of Alaska, Medicaid, payments to local governments, public assistance programs, state personnel headcounts, and numerous other categories. The full consequences of these cuts on the state economy, fiscal health, population, and policy outcomes will take years to develop. In this paper, we provide the short term impacts of the cuts, how they interact with the current state of the economy, and a descriptive outlook of the some of the future effects. We find the cuts will result in more than 4,000 jobs lost in the short run and will therefore return the Alaska economy into recession. While the short term losses represent a considerable negative shock to the economy, the consequences of these cuts on long term development could be even more pronounced.
    • Economics of Wilderness: Contribution of Alaska Parks and Wilderness to the Alaska Economy

      Colt, Steve; Fay, Ginny (National Park Service Alaska Region, 2014)
      "What is the economic contribution of wilderness and wilderness-protected ecosystems to Alaska’s economy? Tourism by nonresidents is the primary link that we consider between wilderness and the Alaska economy, although subsistence harvests and resident recreation clearly generate value for Alaskans. Here, we synthesize and apply existing data and research. We do not consider global ecosystem services provided by Alaska park lands and waters, nor do we assess activity that is not captured within the Alaska economy."
    • Effect of Alaska Fiscal Options On Children and Families

      Berman, Matthew; Reamey, Random (Institute of Social and Economic Research, University of Alaska Anchorage, 2017-02-01)
      Alaska’s state government faces an unprecedented challenge, with the need to close an estimated $3 billion gap between projected revenues and expenditures in fiscal year 2017. Total unrestricted state General Fund revenue in fiscal year 2016 (the 12 months ending June 30, 2016) was $1.3 billion, or about $1,800 per resident. That was barely more than the state dispenses annually to Alaska school districts, to support public education (Alaska Office of Management and Budget, Enacted Fiscal Summary). Despite low oil prices and declining production, petroleum revenues still accounted for 72 percent of these funds (Alaska Revenue Sources Book, Fall 2016, Alaska Department of Revenue, Tax Division). Alaska is the only state that does not have either state income or sales taxes. It is clear that Alaskans will soon have to accept some form of broad-based revenue measure to enable continued funding of basic public services. A 2016 analysis by ISER researchers discussed the potential effects on Alaska’s economy and households of various options to reduce expenditures and increase revenues.1 That study examined how the effects of revenue measures varied for Alaska households with different levels of income. These same revenue measures and expenditure cuts are also likely to have a much bigger effect on some households than others, depending on the presence and number of children in the family. This study extends the previous analysis by specifically examining how different options would be likely to affect families and children. Many large expenditures in the state budget can easily be identified as specifically benefiting children. These include state-funded programs such as the Alaska Public School Foundation program and the Division of Juvenile Justice and Office of Children’s Services, for example, as well as joint federal-state programs such as Medicaid and Denali Kidcare. Less obvious are the effects on children of potential measures to fund these and other state expenditures. This study focuses on describing and quantifying the effects of alternative state revenue options on Alaska families and children. In addition to considering how the revenue measures might affect families with children compared to households without children, we also consider how the burden of each measure might differ for rural and urban families.
    • Energy Costs and Rural Alaska Out-Migration

      Berman, Matthew (Institute of Social and Economic Research, University of Alaska Anchorage, 2017-03-01)
      This report contains results of a formal statistical analysis of the association of high prices for home heating fuel with out-migration from rural Alaska communities, using data from Alaska Permanent Fund Dividend applications from 2003 to 2015. Although anecdotal reports have described hardships caused by the rising cost of fuel, this study is the first to subject the hypothesis of fuel-related out-migration to rigorous statistical testing. This study addressed five main research questions: 1. What is the evidence that out-migration from rural Alaska communities was associated with fuel prices? 2. How sensitive are out-migration rates to fuel prices? 3. Does the effect of high prices on out-migration in communities with the chronically high fuel prices differ from the effect across all communities of high-cost years? 4. How do effects of fuel prices on out-migration differ for regional hubs and smaller villages? 5. How does the magnitude of the effect of fuel prices compare to that of other drivers of mobility, such as employment and income? The study region was defined as the area of western and northern Alaska with neither road nor year-round water access. We divided this region into local areas consisting of the nine Census Areas/Boroughs in the region with the regional hub communities of Dillingham, Bethel, Nome, Barrow/Utqiagvik, and Kotzebue separated from smaller villages in their respective Census Areas/Boroughs. The statistical analysis examined five binary variables representing different types of potential moves that an individual could make outside the local area of residence: 1. Leave rural Alaska (yes or no, all residents of the rural region); 2. Leave the local area (yes or no, all residents of the rural region); 3. If leave the local area, leave rural Alaska: (yes or no, residents leaving local area); 4. If leave a village, leave rural Alaska: (yes or no, residents leaving local area who started in a smaller village and not a regional hub); 5. Leave rural Alaska (yes or no, regional hub residents only) Logistic regression equations were estimated for residents 18 years old to associate each of the five binary variables with fuel prices, controlling for age, gender, employment status and earnings, as well as several characteristics of the community of residence. Teachers, oil workers, mining workers, and pilots were excluded from the analysis. Alaska Department of Labor staff used the applicant’s Social Security Number to link individual Permanent Fund Dividend (PFD) applications across successive years and to 2 state employment security records. Data from PFD applications included age and gender, as well as place of residence. Employment records included earnings by occupation and industry. Retail fuel price surveys conducted by the Alaska Housing Finance Corporation and the Alaska Division of Community and Regional Community Affairs provided price data for home heating fuels. Fuel prices for communities not included in the surveys were estimated from wholesale diesel fuel prices published in Power Cost Equalization program reports. Additional community level data on labor force size, employment, and earnings supplemented data from individual records. Earnings and fuel prices were adjusted to 2015 dollar values using the Anchorage Consumer Price Index. The study found that high fuel prices were associated with more rural Alaska residents moving to urban Alaska, but the size of the effect was relatively small: less than 40 adults each year for each $1 rise in fuel prices. Observed increases in moves to urban Alaska triggered by higher fuel prices came entirely from regional hubs rather than from smaller villages. Although rural Alaska residents were more likely to move from both villages and regional hubs when fuel prices rose, higher fuel prices diverted more village movers to hubs instead of urban areas, so there was a negligible net effect from villages to urban Alaska. Other factors besides fuel prices that change over time also affect migration decisions. The study found that local labor market conditions, as well as the individual’s employment status and earnings had much stronger effects on out-migration than fuel prices.
    • Energy Policy Recommendations

      Pathan, Sohrab; Colt, Steve; Fay, Ginny; Berman, Matthew (Institute of Social and Economic Research, University of Alaska Anchorage, 2013)
      The Senate Finance Committee, through its Senate Energy Working Group, has asked a series of important questions about energy prices, energy costs, and energy use. The Committee also asks the “overarching” question of what can be done to reduce gasoline and heating fuel prices in Alaska? Which of these strategies has the greatest likelihood of success for the least cost to state government? This report contains our responses to both the overarching and specific questions posed. Our answers and recommendations are based on reviews of the most current, publicly available data regarding fuel prices and fuel use. We interviewed numerous agency officials, businesspeople, and residents participating in a range of energy related programs supported by the State of Alaska.