What others say: Implicit value

  • Wednesday, September 23, 2015 8:36pm
  • Opinion

Congratulations to Vigor Alaska, which was named the Southeast Conference’s business of the year last week.

Vigor Alaska was honored for its ongoing work building two new Alaska Class ferries and for its role as an employer in the Southeast Alaska region. (It employs almost 200 people).

Here in Ketchikan, Vigor’s vital role as an employer and generator of economic growth through its operation of the Ketchikan Shipyard speaks for itself.

In the award, we also see an implicit endorsement of the Alaska Marine Highway System, a critically important piece of infrastructure that links Southeast communities — and funnels visitors looking to spend their hard-earned dollars into Alaska.

The state ferry system is facing budget cuts as legislators confront the daunting prospect of billion-dollar budget deficits every year for the near future. Lt. Gov. Byron Mallott declared it “crisis time” for the ferry system at the Southeast Conference. The head of the ferry system, Mike Neussl, warned of the need to cut the size of the fleet at the conference.

No area of the state’s budget should be exempt from the brutal fiscal reality facing Alaska, and the state ferry system is no exception. But it is important to remember that the No. 1 role of the Alaska Marine Highway System is to provide an invaluable service to Southeast Alaska — it is not a traditional business.

As current Alaska Department of Transportation and Public Facilities Commissioner Marc Luiken wrote in 2012, the ferry system “is not, and will not be, a profit generating operation.” The goal instead, as Luiken wrote, is to make the system as efficient as possible.

So, if the ferry system will not generate a straight-up fiscal profit for the state, what does it offer Southeast Alaska and the state as a whole?

Quite a bit.

An analysis of the Alaska Marine Highway System by the Alaska University Transportation Center, Institute of Northern Engineering released in 2012 found the following:

— The AMHS is critical to local economic development, “providing infrastructure necessary to many businesses.”

— The AMHS plays a vital cultural role in Southeast communities, “allowing residents, school groups, and sports teams (to) travel between communities served by AMHS more frequently and with greater safety and reliability.”

— The AMHS is an important tool for funneling visitors into the state. In 2007, about one-third of passengers were out-of-state visitors. Visitors accounted for almost half of the AMHS’ fare revenue.

— The vast majority of the AMHS’ budget is spent within the state. In fiscal year 2007, 80 percent of the system’s budget — $115 million — was spent inside Alaska.

— The AMHS system is an important generator of jobs in the state: The system employed 960 people in fiscal year 2007, and the circulation of AMHS funds generated another 480 jobs throughout Alaska.

There’s no doubt things have changed since 2007, and we all have to face this new reality together.

But as the 2012 report makes clear, the ferry system’s value to Alaska covers a vast socio-economic area.

It’s important to remember that the ferry system is more than a bleak set of numbers on a spreadsheet — the cash spent on the system ripples out into Alaska in numerous ways, and the system’s true value to local communities and local businesses is incalculable.

— Ketchikan Daily News,

Sept. 21

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