Alaska, Montana and the Palin Effect

By Beacon Staff

As a longtime Alaskan, and former Montanan, I have some interesting observations for the Big Sky. I was born in Montana, educated at the University of Montana and immediately adventured to Alaska for a lifelong accounting career. As a CPA and private sector community leader in Wasilla, yes, I know Sarah Palin very well.

I was the president of the Greater Wasilla Chamber of Commerce and other organizations, such as Rotary, at the time Sarah was mayor of Wasilla. I have a field-level view of Sarah’s economic style, accomplishments and mistakes.

Montana and Alaska – Resource States

In the early 1900s during the War of the Copper Kings, huge corporate entities extracted enormous amounts of metals from Butte. What did they leave for Montanans? Last century, Montanans did not have the courage to stand up to the Copper Kings. Most of the wealth left the state. Not so in the past couple of decades in Alaska.

When Montana coal resources began to be extracted, the Montana coal severance tax was modeled after Alaska’s oil and gas royalty from the TransAlaska oil pipeline. For the first time in Montana history, all Montanans would benefit from the resource (coal) extraction tax.

I advise Montana to further financially plan for your next generation. Montana should examine the Alaska Permanent Fund Corporation as a way to share the resource wealth with future generations. The fund has a current balance of approximately $35 billion. Last month every Alaskan received the annual PFD or dividend of $2,069. The fund should revolve into perpetuity, sharing the oil and gas wealth with future generations. Montana should do the same thing as Alaska.

Sarah’s top goal as governor of Alaska was to get the natural gas pipeline going. Her plan was the Alaska Gas Inducement Act (AGIA) for Alaskans. The giant oil and gas companies and related oil service companies, the “oil patch” as we call it, insisted on dictating the economic terms of extracting the trillions of cubic feet of natural gas. Sarah has stood up to the giant oil and gas companies and the legislators that supported the cause of the oil patch. The oil and gas companies must now negotiate and coordinate the transportation of the gas with the pipeline company, TransCanada Alaska Company LLC. The oil patch must comply within the framework of AGIA. “Take a stand for all Alaskans.” That is what Sarah promised during her campaign for governor. Alaskans will maximize the benefit of the gas pipeline.

Sarah’s Style and Personality – My View

As a MBA graduate, I have studied management styles. Sarah’s style is “ready – go.” Her self-proclaimed “new way of doing business” is that her government leadership does not dwell on the “get set, get set, get set” portion of the old way governments do business. Sarah cuts through the bureaucracies. She changes quarterbacks, running backs, linemen and cabinet members if they don’t produce. Some administrators get fired. Is Sarah’s speed and efficiency of operating a government a weakness? You decide. As a champion of small business, I like the ready-go style. Small business doesn’t have time for bureaucracy. Sarah is extremely motivated to get things done.

Economics – The Specifics

The greater Wasilla community has seen the most growth and prosperity of anywhere in Alaska. Why? Sarah built infrastructure.

The private sector investors, including my family, recognized what Wasilla was developing – an invitation for business, jobs and a better community life.

My family has invested and reinvested our family portfolio back into our Wasilla community. The prosperity and quality of life has exceeded our expectations.

Sarah asked me and other local business leaders what else would be attractive? We responded that the elimination of the pesky business license fee and the reduction of property taxes. Done. Lastly, the community wished for a multiuse sports complex. Sarah’s city administration coordinated the revenue bond sale that voters approved to finance the community sports complex that is the envy of Alaska.

Sarah, as Alaska’s governor, has used a similar economic model at the state level – build infrastructure. Build a natural gas pipeline. The Alaska Gas Inducement Act was signed into law before Sarah was asked by John McCain to be his VP nominee.

Wasilla is just like a Montana community. Imagine, for example, if the point guard from Flathead High School went over to the University of Idaho, graduated, came back to Kalispell, was voted to city council, was elected twice as mayor of Kalispell, beat incumbent Governor Schweitzer in the primary and then beat former two-term Montana Governor Racicot in the general election, and now is a candidate for vice president. Montanans may wish to choose to saddle up with Sarah.

Dan F. Kennedy grew up in Columbia Falls and graduated from the University of Montana in 1979. He obtained his MBA from Alaska Pacific University. He is a CPA in Wasilla, Alaska.