APPENDIX: ALASKA'S ECONOMY AND POPULATION,

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1 APPENDIX: ALASKA'S ECONOMY AND POPULATION, STATEWIDE AND REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS PREPARED BY Scon GOLDSMITH AND ALEXANDRA HILL PREPARED for AtASKA DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES March 1997 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH UNIVERSITY OF ALASKA ANCHORAGE 3211 PROVIDENCE DRIVE ANCHORAGE, ALASKA 99508

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3 TABLE OF CONTENTS INTRODUCTION STRUCTURE OF THE ALASKA ECONOMY ECONOMICS BASIC INDUSTRIES INFRASTRUCTURE SUPPORT STATE AND LOCAL GOVERNMENT NON RESIDENT EMPLOYMENT LABOR FORCE PARTICIPATION INCOME DEMOGRAPHICS POPULATION GROWTH RACE, AGE AND SEX HOUSEHOLDS SETTLEMENT PATTERNS REGIONS SOUTH CENTRAL I INTERIOR SOUTHEAST WESTERN ARCTIC FUTURE GROWTH OF THE ECONOMY THE BASIC INDUSTRIES INFRASTRUCTURE SUPPORT STA TE AND LOCAL GOVERNMENT THE NATIONAL ECONOMY AND POLITICS WAGES, PERSONAL INCOME, AND PRICES MODEL ASSUMPTIONS MODEL PROJECTIONS MEDIUM CASE HIGH CASE LOW CASE SUMMARY AND TRANSPORTATION IMPLICATIONS I I I Econo111ic/l)e1nographic Projections ISER, March 97

4 LIST OF TABLES TABLE I. ALASKA GROSS STATE PRODUCT BY SECTOR (MILLION $)... 2 TABLE 2. ALASKA GROSS STATE PRODUCT BY SECTOR SHARES... 3 TABLE 3. HISTORICAL ECONOMIC AND DEMOGRAPHIC STATISTICS... 6 TABLE 4. EMPLOYMENT IN THE LARGEST FEDERAL CIVILIAN AGENCIES, ALASKA, TABLE 5. SUMMER VISITORS BY SELECTED LOCATION, TABLE 6. EMPLOYMENT IN ALASKA'S TRANSPORTATION SECTOR, TABLE 7. EMPLOYMENT IN ALASKA'S SERVICE SECTOR, TABLE 8. EMPLOYMENT IN ALASKA'S TRADEAND FINANCE SECTORS, TABLE 9. NON-RESIDENT WORKERS IN ALASKA (PERCENT) TABLE 10. ALASKA LABOR FORCE PARTICIPATION RATES TABLE 11. PERSONAL INCOME (MILLIONS OF DOLLARS) TABLE I IA. ALASKA PER CAPITA PERSONAL INCOME SOURCES TABLE 12. MOBILITY OF ALASKANS: TABLE 13. ALASKA POPULATION BY RACE TABLE 14. ALASKA POPULATION BY AGE, RACE AND SEX, TABLE 15. ALASKA HOUSEHOLD COMPOSITION TABLE 16. ALASKA POPULATION AND GROWTH RATE BY CENSUS AREA TABLE 17. ALASKA'S MILITARY POPULATION BY LOCATION OF DUTY STATION, TABLE 18. HISTORICAL DATA BY REGION TABLE 19. ECONOMIC AND DEMOGRAPHIC PROJECTIONS - MEDIUM CASE TABLE 20A. REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS -- MEDIUM CASE TABLE 20B. REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS -- MEDIUM CASE...42 TABLE 21. ECONOMIC AND DEMOGRAPHIC PROJECTIONS -- HIGH CASE TABLE 22A. REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS -- HIGH CASE TABLE 22B. REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS -- HIGH CASE, CONT'D TABLE 23. ECONOMIC AND DEMOGRAPHIC PROJECTIONS -- Low CASE...49 TABLE 24A. REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS -- Low CASE...49 TABLE 24B. REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS -- LOW CASE Econo111ic/Dc111ographic Projections ISER, March 97 ll

5 LIST OF FIGURES FIGURE I. ALASKA GROSS STATE PRODUCT SHARES FIGURE 2. ALASKA GROSS STATE PRODUCT SHARES FIGURE 3. ALASKA EMPLOYMENT... 5 FIGURE 4. ALASKA TOTAL EMPLOYMENT ANNUAL GROWTH RATE... 6 FIGURE 5. ALASKA PETROLEUM EMPLOYMENT... 7 FIGURE 6. ALASKA SEAFOOD EMPLOYMENT... 8 FIGURE 7. ALASKA TIMBER EMPLOYMENT... 8 FIGURE 8. ALASKA MINING EMPLOYMENT... 9 FIGURE 9. ALASKA FEDERAL EMPLOYMENT... 9 FIGURE 10 ALASKA CONSTRUCTION EMPLOYMENT FIGURE 11. ALASKA TRANSPORTATION EMPLOYMENT FIGURE 12. ALASKA PUBLIC UTILITIES EMPLOYMENT FIGURE 13. ALASKA SERVICE EMPLOYMENT FIGURE 14. ALASKA TRADE EMPLOYMENT FIGURE 15. ALASKA STATE & LOCAL GOVERNMENT EMPLOYMENT FIGURE 16.ALASKA REAL PER CAPITA INCOME FIGURE 17.COMPONENTS OF ALASKA POPULATION CHANGE FIGURE 18.POPULATION GROWTH RATES BY REGION FIGURE 19. EMPLOYMENT GROWTH RATES BY REGION FIGURE 20.ALASKA PETROLEUM PRODUCTION FIGURE 21 STA TE GENERAL FUND REVENUE FORECAST FIGURE 22. PERMANENT FUND BALANCE FIGURE 23.COMPARISON OF MAP MODEL PROJECTIONS Econo111ic/Dc1nographic Projections I SER, March 97 ii

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7 MAJOR ALASKA TRANSPORT REGIONS WESTERN ARCTIC North Slope I~ Northwest Arctic Yukon Koyukuk CANADA SOUTHEAST Yaldez Cordova Skagway-Yakutat-Angoon 1:::\ "' ~. '\ c.. "'- Aleutians West c)yc;;.. v' ""L12 _. A. ~ "" ~ O c~,..,!./ 0 0 Lake and Peninsula SOUTH CENTRAL INTERIOR Prince of Wales /'Vi" Outer Ketchikan Ketchikan Gateway

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9 INTRODUCTION Alaska's transportation system affects the state's economy in many ways. Growth in jobs, productivity, and marketing capabilities all hinge on the transportation system's effectiveness. Efficient, reliable, and flexible transport enables urban and rural businesses to lower overall costs and increase their competitiveness in the global market. In turn, changes in the population's age and location, in employment and production concentrations and trade patterns, all affect the state's future transportation needs. By understanding the structure of Alaska's economy and the population characteristics, present transportation needs can be evaluated and projection of future needs made. We will look at the economy statewide and in three regions (see Map I, opposite). We will discuss: past trends statewide, urban/rural, and by region our general expectations for the future the specific assumptions that make up our Low, Medium and High case projections the model results a summary and discussion of the implications for transportation STRUCTURE OF THE ALASKA ECONOMY The most comprehensive way to summarize Alaska's economy is by using Gross State Product (GSP). GSP is a measure of the economic contribution from each industry within the state based on the value added of that industry. The economic history of Alaska is reflected in both the overall growth of the GSP and the change in the different economic sectors' shares ofgsp (Tables 1 and 2). For purposes of analysis, we group Alaska's industries into four sectors: Basic, Infrastructure, Support and State & Local Government. Basic industries bring money into Alaska by selling goods and services outside the state or to businesses and individuals who are not Alaska residents. Historically, the imp01iant basic industries have been Oil and Gas, Mining, Seafood, Forest Products, and Tourism. Federal government spending in Alaska is also considered a basic industry, bringing money into the state from taxpayers nationwide. Recently, international air cargo operations have been added to the list of basic industries. Industries in the infrastructure sector derive much of their revenue from selling goods and services to other industries, rather than for final consumption (although they do sell to consumers as well). These industries are Construction, Transp01iation, Public Utilities, and Business Services. The support sector of the economy sells primarily to final demand, that is, to Alaska consumers (although these businesses also sell to other industries). The support sector consists of Trade, Finance, Services (excluding business services) and Miscellaneous Manufacturing for the local market (not seafood, wood products or refining, which export their output). Econo111ic/Dc111ographic Projections ISER, March 97

10 A large number of self employed persons-~ - proprietors -- do not appear in the employment figures for specific industries. We include most of these self employed in the support sector. We do estimate fish harvesting selt~ernployment figures and include those proprietors in the Seafood industry, since virtually the entire work force in fish harvesting is self employed. Although a number of proprietors work during the summer as placer miners (another basic industry), we believe the majority of non seafood harvesting proprietors work in services. We know that a large m1111- ber work in small businesses providing services to tourists. State and local government is ofren included in the support sector; we have treated it separately in this analysis because is has a different role in transportation dernand and supply than the remainder of the support sector. ln addition, its size and dependence on oil revenues set it apart from other support activities. When Alaska became a state in I 959 the economy was dominated by federal military activities. In J 965 the federal governrnent accounted for 26% of gross product. Infrastructure accounted for 24%, a large share of which was in direct support of federal governrnent activities. A further 24% of gross product was contributed by the service sector of the econollly which served the needs of Alaskan households as well as businesses (Tables I and 2) Seafood harvesting and processing was the most important private basic industry, providing 8% of gross product followed by forest product harvesting and processing at 4%, oil and gas production and processing at 3%, and 111ining and tourisrn at 1% each. Miscellaneous manufacturing and agriculture together contributed less than I% to the total. The private economic base was dependent on the harvesting and pri111ary processing of the abundant natural resources of the state, but high production costs and a risky investrnent cli111ate prevented rapid expansion of harvests and of downstrea111 processing Most natural resources were exported after only minimal processing. These industries provided a very tenuous tax base for the new state to begin the process of econolllic developrnent. The development of the state's oil and gas resources, first in the Cook Inlet and later on the North Slope, has been the most irnportant factor contributing to the growth and development of the econorny since statehood. When production of oil on state land began at Prudhoe Bay in I 977, the Alaska's GSP doubled within a two year period; by 1980 oil and gas production, transportation and processing accounted for 65% of gross state product. Much of this value added was paid to the state as taxes and royalties which allowed an expanded role for state and local government in the econo111y. This included both the expansion of traditional programs and the establishment of new progra111s supporting public construction, housing construction, and economic development as well as inco111e translers to individuals. Development of other natural resource industries during the first decades of statehood was eclipsed by the growth of the oil and gas industry. The seafood, mining, and forest products industries were hampered by high costs, lack of inl'ormation about investment opportunities, and jurisdictional disputes with the f'edcral govern111ent. Of these resource industries, only seafood grew significantly in the lirst decades of statehood. Although its contribution to the state's GSP increased by a factor of al111ost ten, it was still overshadowed by oil and gas. Econo1nic/Dc1nogrn ph ic [Jrojccl ions ISl'R. M:1rcl1 97 2

11 Year: TOTAL $1,178 $2,061 $6,061 $19,633 $26,856 $26,298 $23,667 BASIC $503 $938 $1,626 $14,568 $17,611 $17,380 $13,140 oil and gas $41 $280 $539 $12,710 $15,261 $13,636 $9,248 seafood $92 $11 0 $151 $570 $617 $1,137 $1,030 forest products $43 $61 $162 $187 $108 $430 $ ng $10 $11 $17 $32 $57 $96 $101 to11ris111 $13 $19 $69 $161 $304 $381 $481 federal govt. $304 $457 $688 $908 $1.264 $1,700 $1,920 JNFRASTRlJCTURE $283 $401 $2,334 $1,648 $2,741 $2,346 $2,786 SUPPORT $292 $510 $1,572 $2,340 $4,551 $4,504 $5,349 trade-services-fl nan cc $288 $500 $1,537 $2,277 $4,503 $4,400 $5,261 n1isccl lancous $4 $10 $35 $63 $48 $104 $88 STATE/LOC. GOVT, $101 $212 $529 $1,079 $1,955 $2,069 $2,393 \. "' ''"'"''~,,..,,~~'~'-'-":':"""'!-" ~ TABLE 2. Al.ASMQROSS,&IATE J>,RQDUCT BY SECTOR SHARES 0 '-''"~"' ',,~ '' "'~''W ~~;;_,,""'''*"""~''~4(;>;""1%~.f''""" ~""-~~~~"",, )'ear: TOTAL I OO'Y.1 100% 100% Yc1 100% 100% 100% BASIC 43'X1 47'X X Yc X Yc, 66 1 Yc, oil and gas 3<y;) I 4 1 X1 9(Yr) 65lXi 57 1<) 52(X> 39(X> seafood 8(X).s (x) 2(X) 3(X) 2(X) 4(X) 4(X> forest products 4 (x) 31y;> 3(X> l(x> o(x) 2<x, 2(X> Jll!lllllg l <y;) I 1 X1 O(Yc) o(x) O(Yci ClX> o<x) tourisin I <Xi I (Yc) l(xj I <Yc1 J<X> J<X) 2 1 xi fed era 1 govt. 26(Xi 22(X) I \(Xi s 1 xi )ii'(> 6iX> 8(Yc1 INFRASTRUCTURE 24 1 X, 19'X, 39 1 X1 8 1 Yi1 I 0 1 Yc1 91y;) 12 1 Yi1 SUPPORT 24'y;1 24jy;) 26 1 v;, 12 1 v;1 I 7 1 v; Yc1 22cy;, trade-services-finance 24(X) 24 1 /;) 25(Xi l 2cYc> 17(Xi 17 /o 22<y;) n1isccl lancous ()<!() 0 x) 1 1 X1 ocx) o(x) o<x, o(x) STATE/LOC. GOVT, 9'Yi1 I o y;, 9'Yc, 5 1 Yc1 71y;, s Yc, 10 1 Yc1 Eco110111ic/f)cn1ographic Project ions!su<. M:irch 97

12 FIGURE 1. ALASKA GROSS STATE PRODUCT SHARES 1965 fodern! govt 26o/o forest prod 4 /o 111i11ing I <Yo n1isc 0%, tourisn1 1% trade-services finance 24% FIGURE 2. ALASKA GROSS STATE PRODUCT SHARES 1993 oil and gas 40%, scafood 4%, infrastructure l 2o/o 1nining O(Yo touris1112(yo Econon1ic/l)e111ographic Projections ISER, March 97 4

13 The role of the federal government in Alaska's economy has gradually declined. It experienced the smallest percentage growth in nominal tenns of any industry. Although some federal agencies in Alaska have expanded, the largest- the military- has contracted. As other industries expanded, the federal share of Alaska's GSP declined from over one fomih to under one tenth of the total. By 1993 the structure of the economy was very different from 1965 (Figures 1 & 2). Oil and gas, with nearly 40%, was the largest contributor to the GSP. At maximum oil production in the late 1980s this figure was over 65%, but has decreased with declining production since then. Trade and services was next in impo1iance with 22% of the total. This sector has gradually matured to meet more of the needs of the State's businesses and households locally, rather than leaving them to buy from outside the state. Because of the growth in oil and gas and the service sector, the shares of gross state product of virtually all other sectors of the economy were smaller in 1993 than in The natural resource industries excluding oil- seafood, forest products, and mining---- fell from a combined total of 13% of gross state product to 6%. Only tourism increased its share from 1 % to 2%. ECONOMICS Employment growth (Table 3) reflects the same general patterns as gross state product, but differs in details. The average annual jobs growth rate from 1961and1990 was a healthy 3.9%. The support sector grew fastest; non-business services, trade and finance industries benefited from growth in household incomes as well as increases in basic sector activity and government spending. State and local government was stimulated not only by the enormous influx of petrolemn revenues but also by the growth in population. The infrastructure sector grew at the same strong rate as the overall economy due to the needs of the developing basic industries and the growing population. The basic industries as a group were the slowest growing sector with a 1.5% annual growth rate but there was substantial variation across industries. Among basic industries, oil and gas was the fastest growing followed by tourism. (Oil and Gas contributes much more to GSP than to employment because it is a capital intensive industry.) Agriculture increased rapidly but has remained quite small. (Most of the output of that industry is instate consumption rather than export so it is not actually a basic industry in the usual sense of the term). The different growth rates of employment in the various sectors of the economy are reflected in a change in the composition ofem- FIGURE 3. ALASKA EMPLOYMENT ployment over time. Figure 3. THOUSANDS 350. i. i i 300.~... "i !... ~~~ =l:.:::::::::::::::::j::::.:::::::.:::::::::i: :::,;;;jjii... ii shows the declining relative importance of basic sector employment over time and the growing importance of support employment. () cl3asjc OSUPPORT l V/. lnfrastructurf STATE/ LOCAL GOVT 1995 Econon1ic/De111ographic Projections ISER, March 97 5

14 TABLE 3. HISTORICAL ECONOMIC AND DEMOGRAPHIC STATISTICS Alaska Statewide Summary Statistics Growth Rate '61-'90 Population (000) 236, , , , % Households (000) Real Personal Income (millions of 1995 $) $2,470 Wage & Salary Employment (000) 56.9 Total Employment (000) ,739 $4, , ,915 $8,696 $13, % % % Statewide Employment by Sector 1961 Total Basic Infrastructure Support State I Local Govt. 8.2 Employment Shares Total 100% Basic 63% Infrastructure 12% Support 16% State I Local Govt. 9% % 48% 13'Yo 25% 14% % % % % % 100% 100% 35% 32% 14% 12% 34o;., 39% 17% 18% FIGURE 4. ALASKA TOT AL EMPLOYMENT ANNUAL GROWTH RATE 1 S<X).j... j... j... J...,... j... J i i... l... i Because of the dependence of the economy on natural resource production and processing, growth since statehood has been punctuated by a number of cycles of rapid growth followed by periods of consolidation. Figure 4 shows this pattern for employment. The most obvious cycles have been associated with the earthquake and Fairbanks flood in the mid 1960's, the construction of the trans Alaska oil pipeline in the mid 1970's, the second oil crisis Econon1ic/I)en1ographic Projections ISER, March 97 6

15 in the early 1980's, and the Exxon Valdez oil spill in the late l 980's. Although this cyclic nature appears to be moderating, the continued dominance of natural resource industries in the economy suggests that future employment growth will continue to exhibit moderate cycles. BASIC INDUSTRIES OIL Employment within the oil industry itself is less than 10 thousand (Figure 5) but exploration and development activities create large numbers of jobs in construction, transportation, and wholesaling. Local business services also provide support to the industry. Additional jobs are created in pipeline transportation as well as in refining and manufacturing. These are all among the highest paid jobs in the economy. Employment is con- FIGURE 5. ALASKA PETROLEUM EMPLOYMENT ANNUAL AVERAGE IN THOUSANDS 12 -, - ---, ! i '... 1.! 10 r - r, += J 1 :! l :t:: : :::1 :: :... ~: r::..., :~t+~~ SOURCE: AK DEPARTMENT OF LABOR AND!Sl:!H centrated in the Southcentral I Interior Region of the state, particularly on the North Slope and in Anchorage which serves as the headquarters for most of the companies involved in the industry and the staging area for an increasing share of the developments on the North Slope. North Slope workers virtually all commute to work on a weekly or biweekly basis. Most live in the greater Anchorage area. Oil and gas were first produced in Alaska in the Cook Inlet and gas production remains an important industry there, but the primary focus of the petroleum industry in the state is now on the North Slope. Virtually all current oil production occurs on North Slope leases and exploration and development are located there. The Trans Alaska Pipeline transports oil from the North Slope to Valdez. Refineries in Fairbanks, Valdez and on the Kenai Peninsula convert a small percentage of this oil into products for consumption within the state, but the vast majority of the oil is sent to the lower 48 and Pacific Rim markets for refining. Gas production on the North Slope currently powers field production facilities, provides fuel for the oil pipeline, and increases oil production through re-injection into the oil wells. If transportation costs (from the North Slope to Asia) can be reduced enough to make Alaskan gas competitive with other sources in the Pacific Rim market, then the future could see gas sales to that market. The bulk of Cook Inlet gas production supplies a liquid natural gas (LNG) facility and an Ammonia-Urea plant, both located on the Kenai Peninsula, as well as the south central Alaska electric and gas utilities. Econo111ic/l)en1ographic Projections ISER, March 97 7

16 SEAFOOD The seafood industry has gone through a long period of expansion (Figure 6), driven by the increase in the salmon harvest and the development of the bottom fish industry made possible by the passage of the Magnuson Act. This industry is centered in the coastal communities of all three Regions of the state with the largest concentrations in Dutch Harbor, Kodiak, Homer, Sitka, Petersburg, and Ketchikan. FIGURE 6. ALASKA SEAFOOD EMPLOYMENT ANNUAL AVERAGE IN THOUSANDS SOURCE: ALASKA DEPARTMENT OF LABOR AND JSER H SEAFOOD PROCESSING<> SEAFOOD HARVESTING Much of the catch in Alaskan waters is taken by non-residents who fish in Alaskan and federal waters. In addition a significant share of the workers in the processing facilities are nonresidents who come to Alaska to work during the fishing season and then leave the state. Furthermore many Alaskan fishennen do not live in the communities where they fish because it is a seasonal occupation. For example many live in Anchorage and move to the fishing areas during the summer months. The seasonality of the industry is also reflected in summer employment numbers that are several times higher than the annual average number employed. FOREST PRODUCTS. Employment in the forest products industry has been declining since 1990 (Figure 7). The industry has been centered in Southeast Alaska in the Tongass National Forest. Long tenn contracts with the Forest Service kept two pulp mills and several sawmills supplied since the 1950s. However, the economics of pulp and raw lumber production have not proved attractive in recent years. The Sitka pulp mill closed down in 1994, and the Ketchikan FIGURE 7. ALASKA TIMBER EMPLOYMENT ANNUAL AVERAGE IN THOUSANDS SOURCE: ALASKA DEPARTMENT OF LABOR AND ISER fitimber HARVESTING<> PULP MANUFACTURE mill is scheduled to close in March This has in turn affected major sawmills in the region. These sawmills were economically viable only because of inexpensive saw logs from the Tongass; in turn, the saw logs were relatively inexpensive because they were harvested along with pulp logs under long tenn contracts with the Forest Service. So, pulp mill closures have led to closures of the region's largest sawmills. Export of raw logs from private lands in southeast and southcentral Alaska (primarily Native owned) is profitable, but that production peaked in the late eighties; the size of the industry is constrained by resource availability. There is also a small industry in Southcenlral/Interior sending timber from private, state and federal lands to small processing facilities. The facilities produce primarily raw lumber. MINING 1995 Econon1ic/I)e111ographic Projections!SER, March 97 8

17 Historically much of the mining activity in Alaska has been by individuals-- proprietors- who aren't included in the employment figures for the industry. Figure 8 numbers include only employees oflarge corporate mining firms. Proprietors are mostly gold placer miners who work their claims on a seasonal basis and may have another job in the off season. Before statehood, there were several large mining operations, including the Kennicott mine in the Wrangell Mountains, the A-J mine near Juneau, and Independence Mine north of Anchorage. For much of the time since, the only major operating mine was the coal mine at Healy. The Red Dog mine near Kotzebue and the Greens Creek mine near Juneau opened in the late 1980s, and a number of gold mines are under development in Southeast and Southcentral /Interior Alaska. Many of these mines, like Berner's Bay north of Juneau or the Red Dog mine are in remote locations with no direct access to infrastructure. This makes them expensive to develop and vulnerable to world price fluctuations. FEDERAL GOVERNMENT FIGURE 8. ALASKA MINING EMPLOYMENT ANNUAL AVERAGE IN THOUSANDS SOURCE: ALASKA DEPARTMENT OF LAJ30RAND ISER Figure 9 shows the federal gov FIGURE 9. ALASKA FEDERAL EMPLOYMENT ernment employment in Alaska. ANNUAL AVERAGE ln THOUSANDS Historically federal employment has been an important stabilizing force for the Alaska economy when the private sector was dominated by volatile fishing, timber, and mining activity. The number of active duty military Alaska has slowly been declining since the 60s. This trend was briefly reversed in the late 1980s when a B- CJVJLIAN ACTIVE DUTY MJL ~ ~new light infantry brigade was stationed in Alaska, but since then the base closure act has resulted in closing important bases at Adak, King Salmon, and Galena. Fort Greely in the Alaska interior will close soon. Force reductions have occurred at Fort Richardson in Anchorage and Fort Wainwright in Fairbanks. Econo111ic/De111ographic Projections ISER, March 97 9

18 TOURISM Table 4. Employment in the Largest Federal Civilian Agencies, Alaska, 1995 Agency Department of Interior US Postal Service Department of Transportation Department of Agriculture Department of Health/ Human Services Department of Commerce Veterans Administration Treasury Department Department of Justice US Courts Source: Alaska Departn1cnt of Labor The tourism industry has been one of the fastest growing and dynamic basic industries in the state for a number of years. Although it is difficult to monitor activity in this industry because the growth has been so rapid, the importance of tourist visitors appears to be increasing at between 5 % and 7% annually. Table 5 shows that tourism is a statewide industry. Locations not accessible by cruise ship or road receive fewer visitors, but visitors are reaching out to all regions of the state. In 1993, Nome had 23,000 visitors and even the Pribiloflslands had 3,300. Employment 2,637 2,139 1,659 1,283 1, Federal civilian employment shows a slight increasing trend, with reductions only in the last few years. It will continue to be an important source of economic diversification away from natural resources related activities in the future. Table 4 shows the largest civilian agency federal employers in Table 5. Summer Visitors by Selected Location, 1993 Community Total Summer Percent of all Visitors visitors (thousands) Anchorage % Juneau % Ketchikan % Skagway % Denali % Glacier Bay % Fairbanks 'Yo Seward % Sitka % Palmer % Kenai % Wasilla % Tok % Homer % Prince Wm Sound % Soldotna % Valdez % Haines % Source: Alaska Departn1ent of Econon1ic Devclop111cnt, Alaska Visitor Statistics Prograin, Alaska Visitor Paucn1s, Opinions, and Planning, Smnmcr 1993 Econo111ic/De1nographic Projections!SER, March 97 10

19 INFRASTRUCTURE CONSTRUCTION The level of construction activity in Alaska depends upon the amount of new investment in the development of the basic industries in the state, particularly petroleum and mining, upon government spending at all levels, and upon the general health and growth rate of the economy. Since all of these may be volatile from year to year the number of construction jobs fluctuates more from year to year FIGURE 10. ALASKA CONSTRUCTION EMPLOYMEN ANNUAL AVERAGE IN THOUSANDS! ' 30 - l i!.'.~ 20 r ti. I I...,..., l! 1 I ; [... :... ~::.'.f......!oo~ ; i '. i I O i_1111!1111!1111!1111l..ll_1._.i_j.j i _LJ; SOU!~CE: AK DEPT or LABOR AND ISER than any other industry in the economy (Figure 10). In general the construction industry has been more important in Alaska than in other regional economies because of the amount of effort devoted to the development of the state's infrastructure and because of the rapid historical growth in employment and population. Construction jobs are some of the highest paying in the state, partly because many of them are located in remote areas such as on the North Slope or at remote mine sites or military installations. Workers typically live in the urban areas of the state and commute to these jobs on a weekly or seasonal basis TRANSPORTATION. The level of activity in transportation is related to the development and production of the natural resources of the state, tourism, construction, the size of the economy, and most recently, the international cargo transshipment activity at the international airports in Anchorage and Fairbanks. Figure 11 shows how transportation employment has grown since statehood, and Table 6 shows the employment composition of the transportation industry in 1994: FIGURE 11. ALASKA TRANSPORTATION EMPLOYMENT ANNUAL AVERAGE IN THOUSANDS 20 ; 1 i : : : l :!!! j i ibe8dj 15 T : :::::::y::~i~:~ t- ':-;:+t'r~-1- ~+-:-l Q _J_.. L -1...j_ i LJ... ~~~ SOURCE: AK DEPT OF LABOR AND ISER Econo111ic/Den1ographic Projections ISER, March 97 11

20 Table 6. Employment in Alaska's Transportation Sector, 1994 Category Scheduled Air Transport Other Air Transport Related Trucking and Warehousing Water Transportation Local and Interurban Passenger Service Transportation Services--Passenger and Freight Railroads Pipelines (including Alyeska Pipeline) Average Annual Employment (approx.) 1053 (approx.) PUBLIC UTILITIES. Employment in public utilities and communications is a small part of the total infrastructure sector of the economy. It is relatively slow growing because of the economies of scale in the provision of electricity, telecommunications, and other goods and services that is the output of this industry. Employment grew faster in the seventies than before or after that decade because of the expansion of utilities to new parts of the state and because more utilities were provided by a local rather than out of state work force (Figure 12). The one-year increase in 1989 reflects temporary employment to clean up the Exxon Valdez oil spill. FIGURE 12. ALASKA PUBLIC UTILITIES EMPLOYMENT 8 i 1 1 ANNUAL A VERA GE ln THOUSANDS. 1. i i i ~i \ ! '""'"'''"'l'7~~""lji886~ 4 ~.. f ,?B~.j... j \ i Gl3t9E!'i'BsEJE!li! i i i i i 2 ~...\... r l... r... r... l... r -... l... Q ~1-.l._l LJ_j...J l = i ' 'l 'I l' 'I' I' L...L.L.J, ;.. L~ SOURCE: AK DEPT OF LABOR AND ISER!NCLUD!NG COMMUNICATIONS BUSINESS SERVICES Business services is a small but important component of the total service industry (Figure 13). It consists of the non-financial services provided to business such as advertising, personnel supply, building maintenance, computer services, and reproduction. Because these services are provided primarily to other businesses, rather than consumers, we analyze them as part of the infrastructure rather than support sector. Business services tend to be centered in the larger urban areas (particularly Anchorage), where costs of doing business are minimized and firms can take advantage of economies of scale. Services can be delivered to outlying clients from a centralized location. This has been one of the most rapidly growing parts of the economy due to several Econon1ic/Den1ographic Projections ISER, March 97 12

21 factors. Not only has this sector grown in response to growth in the overall economy and the trend among many firms to outsource activities, but it has also expanded to provide services locally that were previously available only from outside of Alaska in larger urban centers like Seattle. FIGURE 13. ALASKA SERVICES EMPLOYMENT /\NNUAL AVERAGE IN TI-IOUSANDS ~,! -- ~!---~i---i --~! --! ). i ' ; ' ; I ' <> <><> 'f :: :t... ::::"" :::.t. : :.. :..I :... :""J~::;,t;,~~:~t..=~-::1::::::.::::"t:.:::. 0!.!. <><>4 <><><><> d.t;iljlljltjl+l)l!jli]ht+!jlljlw!ejll!ljlllil SOURCE: AK DEPT OF LABOR AND ISER SUPPORT NON 8USINESS SERVICES INCLUDING TOURIST RELATED JOBS -a BUSINESS <> NON-BUSINESS Services primarily directed toward households as well as services directed to both households and businesses have been among the fastest growing segments of the economy (Figure 13). Most of these services are relatively immune to the fluctuations associated with the business cycle. Several factors account for this rapid growth. Two major factors are the growth in the number of households and the increase in real household income. Third is the growing stability of the population, which reduces the risk for business investment generally in Alaska. Fourth is the extremely rapid growth of medical services, where the government pays on behalf of poorer households for many services those households would not otherwise buy. These reasons are true in the U.S. as a whole, and growth of the service industry in Alaska has mirrored growth nationwide. Service jobs tend to be lower paying than average; many are seasonal or part time as well. Table 7 shows detailed service employment in TRADE AND FINANCE Growth in trade employment has been steady (Figure 14) and has benefited from most of the same factors contributing to the rapid growth of the service sector of the economy. Also like services, trade and finance activities tend to be concentrated in the urban centers of the state where costs are low and where the markets are the largest. Category Table 7. Employment in Alaska's Service Sector, 1994 Total Health Services Membership Organizations Engineering And Management Social Services Hotels and Lodging Places Amusement and Recreation Auto Service Related Personal Svcs (Laundry, Beauty, Etc.) Legal Services Educational Services Motion Pictures Misc. Repair Museums Average Monthly Employment 49,349 12,829 6,779 6,603 5,866 5,843 2,981 1,978 1,861 1,830 1, Although there has been some expansion of trade into the smaller communities as a result of the increase in disposable income in rural areas, urban areas such as Anchorage continue to dominate Econon1ic/Dcn1ographic Projections ISER, March 97 13

22 trade sales in Alaska. Table 8 shows the composition of trade and finance employment breakdown for MISCELLANEOUS MANUFACTURING Less than 20% of the manufacturing employment in Alaska is in the "Miscellaneous" category; the rest is associated with basic industries - seafood, timber, and oil processing. Manufacturing for the local market or for export to other markets is constrained by the small size of the Alaska market, the high cost of business in Alaska relative to other loca- tions, and the distance from large markets. The largest manufacturing sectors serving the Alaska market are printing and publishing (both newspapers and commercial printing), bakeries, concrete products, sawmills and boat building and repair. Altogether these activities employ about 3 thousand on an annual average basis, and of these publishing accounts for about 50% of the total. STATE AND LOCAL GOVERNMENT Both state and local government grew rapidly from statehood through the mid 80s, fueled by massive growth in state revenues (Figure 15). Per capita state revenues peaked in 1982 and declined sharply through the rest of the 80s. Since the mid 1980s fiscal restraint has reduced the growth rate of state employment to near zero. Local government employment has been closely correlated with population growth as well as the availability of state and federal revenues in the past. Continued population growth has Category FIGURE 14. ALASKA TRADE EMPLOYMENT ANNUAL AVERAGE IN THOUSANDS :: -l- -.. L... L.. L... J - J - _JqQ<>:?..t.. ' ' i i "~"<><>" ~ i ::~~a~m 0 _J...LLL-.W--W----W~ SOURCE: AK DEPT OF LABOR AND ISER INCLUDES TOURIST RELATED G Wl-!OLESALE <> RETA!L Table 8. Employment in Alaska's Trade and Finance Sectors, 1994 Total Eating and Drinking Places General Merchandise (Department Stores) Food Stores Miscellaneous Retail Auto Dealers and Service Stations Banks and Other Depository Institutions Real Estate Operators, Agents, Etc. Holding and Investment Building Materials Insurance Agents, Brokers, and CaJTiers Apparel and Accessory Stores Furniture Stores Other Financial >- z w 35 "' t; 30 ~ 25 "- "' w 20 "' > ~ "" "" :::> 5 z 0 «Average Annual Employment 55,159 14,659 7,338 7,160 6,050 4,567 4,264 2,213 1,802 1,693 1,794 1,488 1, FIGURE 15. ALASKA STATE I LOCAL GOVT EMPLOYMENT ANNUAL AVERAGE IN THOUSANDS! f 1 i i i (), :: ::::::::::::::::::: ::::::::::::::::::: ::::::::.:.::::::: ::::::::::::::::J.. ::::~:~:~+~~~~ t.~~:~:~::r::::....<> ' <> ' Iil8B88D ~~TT l f!ll 'o<>o.<y i...!...!...!... ~... :;@@~<>! i m '''' m i L SOURCE: AK DEPT OF LABOR AND ISER -a-state <> LOCAL Econo111ic/De111ographic Projections ISER, March 97 14

23 driven continuing, but decelerating, local employment growth for the last decade. NON RESIDENT EMPLOYMENT The share of jobs and income paid to non-resident workers has held fairly constant over time based on residence adjustment data from the US Department of Commerce and information from the Alaska Department of Labor. TABLE 9. NON-RESIDENT WORKERS IN ALASKA About 8 percent of wage income is (PERCENT) reported to leave Alaska as a residence adjustment each year. The Food Processing 65.0% 76.0% Alaska Department of Labor estimates a larger amount but their Eating/Drinking 30.0% 29.4% Heavy Construction 32.0% 23.1% definition of non-resident includes Special Trades Construction 28.0% 25.7% in migrants who have not lived in Alaska long enough to qualify for Building Construction 28.0% 22.1% the Alaska Permanent Fund Dividend. Table 9 shows the industries Oil And Gas 24.0% 26.8% Hotels 26.0% 33.7%, with the highest percentages of Business Services 30.0% 27.0% non-resident workers. Seafood Wood Products 33.0%i 45.7% (food processing), timber, tourism Air Transportation 19.0% 21.0% and construction draw many seasonal Water Transportation 30.0% 31.8% workers. Oil and Gas, with Source: Alaska Department of Labor remote works sites and week on/week off schedules enables non-residents to commute from a great distance. LABOR FORCE PARTICIPATION Table 10 shows the labor force participation rate in Alaska from 1960 through This the ratio of those ages 16 to 64 who are working or looking for work to the total in that age group. Alaska's rate is among the highest of any state both for men and for women. In 1994 the labor force participation rate for Alaska men was 81.2% and for women it was 67.5% The comparable figures for the US were TABLE 10. ALASKA LABOR FORCE PARTICIPATION RATES MEN Civilian White Non-white Black Native Asian I Pacific Islander WOMEN Civilian White Non-white Black Native Asian I Pacific Islander % 50.2% 39.4% 26.0% % 78.5% 79.9% 85.5% 83.5% 87.5% 80.7%, 81.2% 82.4% 50.6% 54.2%, 69.4'% 84.2'Yc, 84.7% 45.7% 58.9% 65.9% 48.5%, 61.6% 68.2% 56.9% 71.3% 70.7% 31.0% 42.8%, 51.4% 62.4% 71.3% Econon1ic/De111ographic Projections ISER, March 97 15

24 75. l % and 58.8%. In general, the trend has been for high participation rate groups to stay high, and for groups with lower participation rates to increase their rate. Women of all races increased participation by I 0 to 20 percentage points between 1970 and 1990, reflecting trends nationwide. Native labor force participation jumped after 1980, from 54% to 69% for men, and from 43% to 51 % for women. This may reflect increased rural job opportunities, increased efforts by native corporations to employ their shareholders, improvements in education and training of the native population, or a combination of these factors. INCOME Per capita personal income in Alaska has historically been higher than the national average. Increasing employment had been reflected in growth in personal income shown in Table 3, but there has also been a ehange in income composition over time (Table 11 ). Almost 90 percent of income derived from labor in By 1990 the labor share had fallen to 75 percent due to the growth in dividends I interest /rent income, transfers, and the Permanent Fund Dividend. This diversification of the sources of income has had a stabilizing influence on the economy and is one of the factors contributing to the moderation of boom-bust cyeles and to the growth in the support sector of the economy. The real average annual civilian wage (adjusted for inflation) grew rapidly in the 1960s, at a slower rate in the 1970s and fell during the 1980s. The increasing trend was fueled by several factors. Jobs added in the seventies and early eighties were heavily weighted towards high wage professional and technical oeeupations. Extremely rapid job growth meant that employers had to raise wages to attract workers to the state. And wages had to be high enough to compensate for Alaska's higher Basic wages Non-basic wages Other labor income Total labor Total labor share Dividends I interest I rent Transfer payments Permanent fund dividend Total non-labor TABLE 11. PERSONAL INCOME (Millions of Dollars) , % ,287 1, , % ,780 2,812 1,729 8, % 1,261 1, ,946 cost of Jiving. Starting in the Total non-labor share 10.2'Y '\/o 17.0% 26.1 % mid eighties, though, there was a shift in employment toward lower wage industries and downward pressure on wage rates from slower growth in employment opportunities. This was partly a reflection of the state recession in mid decade, partly due to structural change in the Alaska economy, and partly the result of changes occurring in the national economy. Also, the cost of living differential between Alaska and the U.S. has been steadily decreasing for several decades. Even so, Alaska had the 5th highest average annual pay of any state in The distribution and composition of income varies across regions of Alaska. In 1994, per capita income ranged from $31,950 in the Bristol Bay Borough to only $10,633 in Wade Hampton (Table 1 la). The share of total income provided by wages earned in the region ranged from 35 per- Econon1ic/l)en1ographic Projections ISER, March 97 16

25 cent in the Yukon-Koyukuk and the Matanuska-Susitna Borough to 76 percent in Aleutians West (where federal employment in Adak made up a large share of total income). TABLE 11A. ALASKA PER CAPITA PERSONAL INCOME SOURCES, 1994 Per Capita Wages Residence Residence Wages net Dividends 'I'ransfers lncon1e Adjustment Adjustment Residence Interest Out In Adjust- Rent 1nent STATE $23,437 $15,176 ($1,242) $0 $13,934 $2,491 $3,937 Anchorage $27,026 $17,840 ($955) $0 $16,885 $2,856 $3,979 Matanuska- Susitna Borough $16,715 $5,787 $0 $3,555 $5,787 $1,909 $3,252 Kenai Peninsula Borough $23,081 $10,888 $0 $1,331 $10,888 $2,636 $3,917 Kodiak Island Borough $20,715 $12,906 ($2,154) $0 $10,752 $2,108 $3,077 Valdez Cordova $26,689 $16,241 ($1,990) $0 $14,251 $2,983 $4,347 Fairbanks North Star Borough $19,318 $12,910 ($1,517) $0 $11,392 $2,259 $3,615 Southeast Fairbanks $18,385 $10,316 ($387) $0 $9,929 $1,367 $5,361 Yukon-Koyukuk $16,128 $8,909 ($3,193) $0 $5,716 $1,476 $6,271 Denali $22,280 $17,943 ($7,867) $0 $10,076 $2,098 $6,574 Non1c $16,573 $10,331 ($584) $0 $9,748 $791 $4,691 North Slope Borough $26,270 $72,339 ($54,985) $0 $17,354 $995 $4,499 Northwest Arctic Borough $17,544 $12,887 ($3,328) $0 $9,559 $1,055 $5,391 IIaines Borough $26,226 $10,310 $0 $2,440 $10,310 $4,060 $4,494 Juneau Borough $27,278 $17,757 ($625) $0 $17,132 $3,888 $3,672 Ketchikan Gateway Borough $29,148 $17,873 ($1,221) $0 $16,652 $3,569 $3,989 Prince of Wales $16,517 $9,203 $0 $481 $9,203 $1,424 $3,786 Sitka Borough $23,631 $13,042 ($928) $0 $12,114 $3,467 $4,057 Skagway-Hoonah-Angoon $22,455 $11,403 $0 $801 $11,403 $2,347 $4,759 Yakutat Borough $23,937 $15,207 ($2,063) $0 $13,144 $2,211 $5,275 Wrangell Petersburg $25,034 $11,886 $0 $18 $11,886 $3,494 $3,800 Aleutians East $21,561 $16,980 ($2,194) $0 $14,786 $1, 154 $2,615 Aleutians West $23,115 $26,973 ($9,309) $0 $17,665 $741 $2,790 Bethel $15,379 $8,981 ($138) $0 $8,843 $532 $4,978 Bristol Bay Borough $31,950 $27,745 ($7,721) $0 $20,024 $1,439 $4,391 Dillingham $22,323 $13,354 ($1,110) $0 $12,244 $1,232 $4,330 Lake and Peninsula Borough $18,803 $7,369 $0 $220 $7,369 $853 $4,371 Wade Hampton $10,633 $4,509 ($407) $0 $4, 102 $281 $4,898 Econo111ic/I)cn1ographic Projections!SER, March 97 17

26 In most areas of Alaska and statewide, there is a net outflow of wages as workers who don't reside in au area take their wages to their home areas. Oilfield workers especially live in urban areas or outside the state and commute to remote locations on the North Slope. And many residents of the Matanuska-Susitna Borough work in Anchorage. These factors account for net inflows of wages to the Kenai Peninsula and Matanuska-Susitna Boroughs. There are also new inflows to Haines Borough, Prince of Wales and Skagway-Yakutat-Angoon in the Southeast region and the Lake and Peninsula Borough in the Western Arctic Region. Median household income in Alaska ranks highest in the nation at 41 % above the national average in At the same time the poverty rate in Alaska is the second lowest in the nation. These numbers aren't adjusted for the cost of living differential. The high level of median household income is due primarily to the large average household size. This skews the income distribution compared to other states and gives the appearance that Alaskan households are relatively well off. FIGURE 16. ALASKA REAL PER CAPITA INCOME PERCENT ABOVE OR BELOW U.S. AVERAGE ~ ~ 30% ~--~--~--~--~--~--~---. w 6 20% r..,....;...,... ±~...,...,...,... I ro <( * 10% r..,...,...,... ff... w,...,... ~,...,...,..., (j) -10% :j ;,: 0 ~ w ro -20% I ADJUSTED FOR ALASKA COST OF LIVING DI FFERENTIALj If we look at per capita income, and adjust for Alaska's higher cost of living, the picture changes. Adjusted per capita income has generally been below the national average except during and after the boom created by the construction of the trans Alaska oil pipeline and the boom associated with the second oil crisis (Figure 16). DEMOGRAPHICS POPULATION GROWTH From 1961 to 1990, Alaska's population more than doubled. This increase is faster than the that of the US as a whole, and both components of population change-natural increase (births minus deaths) and net migration (in-migrants minus out-migrants)--have contributed. Figure 17 shows how they have combined to produce the total population increase each year. Alaska has among the higher birth rates in the US, both because Alaska's women have higher fertility rates than the national average, and because the state's population is young, with a greater than average share of the population in their childbearing years (ages 15 to 45). Natural increase produces a fairly steady population growth rate; in Alaska, it is migration that drives population growth. On average, about 10% of the Alaska population turns over through migration each year, one of the highest rates of gross migration in the US. This is partly due to the large military presence, but also the result of the young population (more likely to move to follow economic opportunity), and of periods of rapid growth in the state's economy. The overall growth of the economy I~cono1nic/Den1ographic Projections ISER, March 97 18

27 ~ ~ Figure 17. Components of Alaska Population Change Annual Population Change"" Natural Increase plus or n1inus Net Migration Annual Populatim Change Net In Migration since statehood has meant that, on average, in-migrants have exceeded outmigrants. Net migration has tended to be quite volatile and to follow the fluctuations of employment opportunities in the state. Figure 1 7 Naturallnerease 0 --F~ J---l~1- --f-- l + M 00 ' n 00 ' t- Net Out Migration shows the inflows and outflows associated with the period of construction of the trans Alaska pipeline (mid-70s, out-migration in '78 and '79) and the second oil crisis (boom in early '80s, out-migration in late 80s). The population is becoming more stable, as evidenced by comparing the 1960, 1970, and 1980 decennial census infonnation on the residence of Alaskans 5 years prior to the census year (Table 12). In 1960 only slightly more than half of Alaska residents had been living in the state five years earlier. By 1990 the percentage had grown to more than 75%. The population becomes more stable as it ages, as the militaiy declines in relative importance as an employer, and as cycles in the economy moderate. TABLE 12. MOBILITY OF ALASKANS: Residence During Census Compared to Residence 5 Years Previous Total Persons age , , , ,966 Persons Living in: Same house 41,451 72, , ,126 Alaska 96, , , ,797 Outside Alaska 85, , , ,169 Share of Persons in: Sarne house 23% 27% 32% 41% Alaska 53% 50% 69% 77% Outside Alaska 47% 50% 31% 23% Econo111ic/l)c111ographic Projections ISER, March 97 19

28 RACE, AGE AND SEX The population has shifted steadily towards a smaller prop01tion of Alaska Natives and larger shares of whites and other races. This shift is primarily driven by migration, which has accounted for about 30% of Alaska's new residents since 1961, and which brings people of many races, but only rarely Alaska Natives, to the state. Since 1950, the Native share of the population has declined from over one-quarter to less than one-sixth; whites have increased from 72 percent to 76 percent, and other races have increased their share almost sixfold from 1.5 percent to almost 9 percent (Table 13). TABLE 13. ALASKA POPULATION BY RACE Growth Rate Total 128, , , , , , % 100 /,, 100% 1 OO'Yo 100% 100% 100% White 92, , , , , , % 72.1% 77.2% 79.2% 77.2% 75.5% 75.7% Native 33,863 42,522 50,819 64, ,698 97, % 26.3% 18.8% 16.9% 16.0% 15.6% 15.7% Other Races 1,972 9,099 11,765 27,521 48,853 52, % 1.5% 4.0% 3.9%. 6.9% 8.9% 8.6%, There are more males in the population than females (Table 14), again due primarily to selective in-migration of more males than females (especially of those in the military), but this difference is smaller than in the past, and continues to decline. TABLE 14. ALASKA POPULATION BY AGE, RACE AND SEX, 1995 A 11 Races Native Age Male Female Total Share Male Female Total Share Total 320, , , % 48,535 48,469 97, % ,239 27,310 55, % 6,520 6,446 12, % ,457 68, , % 14,805 14,370 29, % , , , % 28,436 28,261 56, % ,258 14,838 28, % 2,144 2,631 4, % , 136 1, % % The median age of the Alaska population has historically been much younger than that of the US population. Harsh conditions result in many older Alaskans leaving the state, and in 1995 less than 5% of the Alaska population was 65 years or more, compared to 13 % for the US as a whole. In migrants, however, tend to be young people coming to Alaska to take advantage of Econon1ic/l)e1nographic Projections ISER, March 97 20

29 economic opportunity or transferred here for a few years by the military. The 15 to 64 year old age group (which includes the prime working age cohorts) holds 69% of the Alaska population compared to 65% for the U.S. However, this profile is changing. Residents over 65 are now Alaska's fastest growing cohort in the population and the military presence is declining, shifting the population composition towards the national average. There is a significant difference in the age distribution between Alaska natives and other races. A larger share of the native population is both younger and older than the non-native population (Table 14).The Alaska native population does not migrate in or out of the state in large numbers, and the proportion over 65 is slightly higher ( 4.9 percent vs. 4.6 percent) than for the state as a whole. Also, the Native population has a high fertility rate, and 43.5 percent of natives are under 18 years old, compared with 32 percent for the state as a whole. HOUSEHOLDS TABLE 15. ALASKA HOUSEHOLD COMPOSITION Alaska TOTALHH 79, , , ,744 97,107,000 Mean Household Size FAMILYHH 83.6% 72.7% 70.3% 69.8% 70.5% Married Couples 75.7% 61.1% 56.2% 55.0% 54.7'% with children 51.2% 38.5% 34.3% 33.3% 25.6% no children 24.5% 22.6% 21.9% 21.7% 29.1% Other 7.9% 11.6% 14.2% 14.7% 15.8% female head children 3.9% 6.1% 7.7% 8.1 'Yo 7.8% no children 1.2% 1.7% 1.9% 2.0% 4.7% male head children 1.8% 2.1% 3.0% 3.2% 1.5% no children 1.0%, 1.7%, l.5'x, 1.5% 1.8% Share of Family Households: with children 68.1% 64.2% 64.0% 63.9% 49.5% without children 31.9% 35.8% 36.0% 36.1% 50.5% NON-FAMILY 16.4% 27.3% 29.7% 30.2% 29.5% Persons Living Alone 13.2% 20.1% 22.1% 22.6% 24.3% 2 or More Persons 2.8% 7.2% 7.5% 7.6% 5.2<Yo(X> us Econo1nic/J)en1ographic Projections ISER, March 97 21

30 The composition of households has been changing rapidly in Alaska, as in the rest of the US (Table 15). Family households-a householder and one or more persons related by birth or marriage- are giving way to single person households and households of unrelated adults. Among family households, the share who are raising children declined from 68 percent in 1970 to 64 percent in It is still considerably above the US average of 50 percent. The "traditional family" -- a married couple with children- accounted for over half of all households in 1970, but only one-third in As the population of Alaska continues to age, these trends will contiime, and Alaska household composition will look more like that of the U.S. as a whole. Alaska's average household size has historically been above the national average and continues so today. A higher proportion of Alaskans are in their child rearing years than in the U.S. as a whole, so more Alaskan households include children. Fewer are older households with just one or two senior citizens. Also, Alaska's native population has had a high birth rate and larger families than the U.S. average. Finally, limited housing availability in rural Alaska promotes extended family living and limits the number of single person households. Average family size in the native community has fallen with the decline in the birth rates of native women and increased availability of housing. In the non-native community the changing composition of households accounts for most of the decline in the average household size. As with the changing composition of households, the decline in household size has moderated in recent years and the current average household size of may be a low point in the for the Alaska population. As the population continues to age the composition of the population and households should more closely approach that of the US as a whole, continuing the trends towards fewer households with children and more non-family households. SETTLEMENT PATTERNS In 1995 over 75% of Alaska's population was within the five largest boroughs of Anchorage, Fairbanks, Matanuska-Susitna, Kenai Peninsula, and Juneau. The Greater Anchorage region, consisting of Anchorage and the Matanuska Susitna Borough, which has become primarily a suburb of the Anchorage Municipality, contained half of the population of the state. This concentration is largely due to the rapid growth of the Matanuska-Susitna Borough which has been the most rapidly growing part of Alaska since 1980 (Table 16). Differential population growth can be traced to differences in natural increase, different job growth rates (and thus employment opportunities) and other features which make an area attractive to live in. In recent years, net immigration has been most important in the rapidly growing urban areas, and the suburban areas adjacent to them. Out migration in times of job loss also affects these areas most heavily. Places with a lot of seasonal or military employment tend to be initial destinations for migrants, and have disproportionate rates of turnover of their populations. Other areas - the Matanuska-Susitna Borough is the best example- draw more people who are already Alaska residents. In contrast, rural areas have consistently shown a predominant pattern of net out-migration. In most of Alaska, there has been migration of the Native population into the large urban areas of Greater Anchorage, Fairbanks, and the Kenai Peninsula Borough. However, because natural in- Econon1ic/l)cn1ographic Projections ISER, March 97 22

31 crease in the rural areas more than balances out-migration, these areas continue to grow, although more slowly than urban areas. TABLE 16. ALASKA POPULATION AND GROWTH RATE BY CENSUS AREA Growth Rate STATE 302, , , % Anchorage 126, , , % Matanuska Susitna Borough 6,509 17,816 50, % Kenai Peninsula Borough 16,586 25,282 46, % Kodiak Island Borough 9,409 9,939 15, % Valdez Cordova 4,977 8,348 10, % Fairbanks North Star Borough 45,864 53,983 84, % Southeast Fairbanks 4,308 5,676 6, % Yukon-Koyukuk (Including Denali) 7,045 7,873 8, % Nome 5,749 6,537 8, % North Slope Borough 3,451 4,199 6, % Northwest Arctic Borough 4,048 4,831 6, % Haines Borough 1,401 1,680 2, 'Yo Juneau Borough 13,556 19,528 29, % Ketchikan Gateway Borough 10,141 11,316 15, % Prince of Wales 3,782 3,822 6, % Sitka Borough 6,073 7,803 9, % Skagway Yakutat 2,792 3,478 4, % Wrangell Petersburg 4,920 6,167 7, % Aleutians (East & West) 7,834 7,768 8, % Bethel 8,917 10,999 15, % Bristol Bay Borough 1,147 1,094 1, % Dillingham 3,872 3,232 4, % Lake and Peninsula Borough * 1,384 1, % Wade Hampton 3,917 4,665 6, % The military population has an important influence on settlement patterns in some areas. Military base closures in the last ten years have greatly changed the population composition of the western Aleutians, the Bristol bay Borough, and some communities in interior Alaska. In 1995 the largest concentrations of active duty military were in the urban areas of Anchorage, Fairbanks, and Kodiak (Table 17). In the past, high military populations shifted the population towards single young males. While this is still true, the composition of the military and military dependent population has been changing. There are more women among the active duty force and the ratio of dependents to active duty personnel has increased as the average age of active duty personnel has risen. Econo111ic/l)en1ographic Projections ISER, March 97 23

32 TABLE 17. ALASKA'S NATIVE AND MILITARY POPULATION 1995 Total Native Native Military Share STATE 615,900 97, % 19,633 Anchorage 257,780 18, % 9,386 Matanuska Susitna Borough 50,601 2, % 0 Kenai Peninsula Borough 46,759 3, % 99 Kodiak Island Borough 15,400 2, % 1,028 Valdez Cordova 10,657 1, /., 110 Fairbanks North Star Borough 84,380 5, % 6,948 Southeast Fairbanks 6, % 386 Yukon-Koyukuk (Including Denali) 8,488 4, % 115 Nome 8,991 6, % 24 North Slope Borough 6,989 4, % 0 Northwest Arctic Borough 6,694 5, % 0 Haines Borough 2, % 0 Juneau Borough 29,228 3, % 231 Ketchikan Gateway Borough 15,082 1, % 212 Prince of Wales 6,934 2, % 0 Sitka Borough 9,194 1, 'Yo 207 Skagway Yakutat 4,617 1, % 0 Wrangell Petersburg 7,303 1, % 27 Aleutians (East & West) 8,369 2, % 860 Bethel 15,367 12, % 0 Bristol Bay Borough 1, % 0 Dillingham 4,421 3, % 0 Lake and Peninsula Borough 1,839 1, % 0 Wade Hampton 6,670 6, % 0 Econon1ic/Dc111ographic Projections ISER, March 97 24

33 REGIONS Table 18 shows how population and income are distributed across the transportation regions. Since 1980, population and employment have become more concentrated in the Southcentral Interior region, as growth there has been faster than in other regions of the state. In the 90s, wage and salary employment and income have grown most rapidly in the Western Arctic. Western Arctic data also shows that wage and salary income is almost as high as personal income for that region. This is because wage and salaty income is measured by place of work, and personal income by place of residence. Because many No1ih Slope oil workers (whose place of work is Western Arctic) live in Southcentral-Interior, their wages are included in the wage and salary income for Western Arctic, but as part of the personal income for Southcentral Interior. Table 18. Historical Data by Region Growth Growth Southeast Population % 1.19% W &S Employment % 0.75% Personal Income* $1,302.0 $1,900.4 $ % -048% W&S Income $1,105.9 $ % South central-interior Population % 2.21% W&S Employment % 2.17% Personal Income* $6,627.3 $10,117.4 $10, % 1.75% W &S Income $5,807.4 $ % Western Arctic Population 'Yo 0.61% W&S Employment % 2.26% Personal Income* $964 $1,432.7 $1, % 0.77% W&S Income $1, $1, % Note: Last value for personal incon1e is 1994 SOUTHCENTRAL / INTERIOR The Southcentral I Interior regions stretches from the Gulf of Alaska to the Arctic Ocean, and includes Alaska's two largest cities, Anchorage and Fairbanks. The statewide trends discussed in the previous section largely reflect this ai ea, which holds the majority of the state's population, includes almost all the state's oil employment, major commercial fishing areas in Cook Inlet and Prince William Sound, and several major tourist destinations, including Denali Park and the Kenai Peninsula. Figures 18 and 19 show that southcentral-interior population and employment expanded and contracted somewhat more sharply than the rest of the state. This region has a greater share of volatile job categories (such as construction jobs) and more migration into and out of the state takes place from here than the southeast or western arctic regions. Econon1ic/De1nographic Projections ISER, March 97 25

34 SOUTHEAST Southeast Alaska developed as a region of timber and fishing, and since statehood had added state government and tourism to its economy. Fishing has been generally increasing, but more slowly than the statewide figures. Timber, as described in Forest Products above, has been declining since the late 80s, with the shutdown of major pulp mills and saw mills, and the decline of the Native timber harvest since its peak about a decade ago. Figure 18. Population Growth Rates by Region a- Southeast Southcentral-Jnterio1* Western Arctic Figure 19. Employment Growth Rates By Region State government, which had 10% been a rapid source of growth in the Juneau area since 5 /o statehood and especially in the 70s and 80s, is relatively static now. Tourism is -5 /o southeast's major growth industry at present, with growth in cruise visits, independent travelers, and a B Sou! beast Southcentral lnterio"*" Western Arctic steady increase in new ecotourism firms. The booms and busts in southeast industries are not concurrent. Timber has been declining in the 90s, but fishing has been generally steady; state government growth has stopped, but tourism growth continues. Because it's difficult to move between these industries, individuals may feel all the economic ups and downs of booms and busts in their industry, while aggregate numbers for the region show much more moderate expansions and contractions. WESTERN ARCTIC The Western Arctic region encompasses some of the poorest regions of the state, as well as some of its richest fishing grounds. Communities in the Kodiak - Bristol Bay - Aleutians part of the region are heavily dependent on commercial fishing, which has boomed in recent years with the development of the Bering Sea bottom fish industry, and with record salmon runs. In the more western and northern portions of the region, economic opportunity is much more limited, and the local economies are largely dependent on state and local government and Native Corporation jobs, and government transfers. The federal government is still a relatively large economic presence here, with BIA contract health care employing many people. Econo111ic/l)e1nographic Projections ISER, March 97 26

35 Employment growth and decline closely tracks that of the southcentral-interior region. In the oil boom of the early 80s, state aid to local governments fneledjob growth; the oil spill clean-up produced some increased employment in the western arctic, but also provided temporary highwages to residents who travelled to the spill area, and then spent their wages at home in the western arctic, supporting trade and services jobs there. Population change has been more moderate in the western arctic region than employment change; perceived lack of better opportunities elsewhere and the ability to depend on a combination of subsistence and transfers mean that job loss has not lead to as rapid out-migration as other regions. Likewise, remote conditions have made it difficult to attract in-migrants to new job opportunities, and relatively high unemployment has meant that there are often enough local residents in the labor force to provide workers for new jobs. Econo1nic/De111ographic Projections ISER, March 97 27

36 FUTURE GROWTH OF THE ECONOMY THE BASIC INDUSTRIES For the foreseeable future, the Alaska export base will continue to be dominated by commodityproducing industries such as oil and gas, seafood, and mining. However, the federal government will continue as a major employer, and tourism will continue to expand its role. Anchorage and Fairbanks are developing a new basic industry; they operate as transfer and refueling hubs for international air cargo shipment. Petroleum, mining, and tourism hold the most potential for employment growth through expansion of the resource base. Growth of the timber and seafood industries may result from more intensive exploitation of the resource base coupled with the expansion of value-added processing. Relatively high labor costs, sparse and expensive infrastructure, small market size, and distance from markets will continue to act as barriers to this, as well as to the development of other resource processing, manufacturing and services for export. Because of this dependence on commodity-producing industries, the Alaska economy will contiime to experience localized business cycles as commodity prices respond to world market conditions. Although the existence of these cycles can be expected, their timing cannot be forecast. Consequently our projections have an appearance of smoothness and continuity which contrasts with the past experience of the economy and which is unlikely to be the actual pattern in the future. For example, building a pipeline to bring North Slope gas to market would cause a significant construction boom followed by a transition to a much smaller operational work force. The cycle would be similar to, but smaller than, the historical cycle associated with construction of the trans-alaska oil pipeline in the 1970s. We have included such a cycle in our assumptions for the High Case projection. OIL AND GAS FIGURE 20. ALASKA PETROLEUM PRODUCTION MILLION BARRELS PER DAY CJCOOK INLET 0 PRUDHOE BAY OOTHER NORTH SLOPE Oil production began in Cook Inlet but has been dominated by North Slope production since 1977 when the Trans Alaska Pipeline was completed. Production peaked in 1988 and has declined for nearly a decade at about 4 percent annually. North Slope production has been dominated by the Prudhoe Bay field, the largest oil field ever discovered in North America (Figure 20). The industry continues to explore and discover new fields and to use technological innovation to increase the amount of oil which can be profitably extracted from known fields. Also, the state government and industry have worked together on tax and royalty incentives to encourage development of marginal fields (e.g. North 1995 Econon1ic/De1nographic Projections ISER, March 97 28

37 Star). This means that known fields produce more than originally forecast, and new fields contiime to be brought on line. Even so, production from more recently developed fields on the N01ih Slope can only partially offset the decline in Prudhoe Bay production. The Alaska Department of Revenue expects continued decline in the rate of production, and they project it to fall below I million barrels per day in the middle of the next decade. Other analysts suggest that new technology and higher prices for oil combined with more liberal federal and state policies could forestall any further declines in the production rate. Under any scenario, however, we can expect that the petroleum industry will be a driver for the economy for the foreseeable future because of the large number of undeveloped oil and gas fields on the North Slope. The industry will continue to view the North Slope of Alaska as the best domestic prospect for new production. SEAFOOD. Seafood employment has grown as new fisheries have been developed over the last several decades. These fisheries are now entirely utilized and further expansion of the industry is constrained by the size of the renewable resource. Expansion of the industry in the future could come from" Alaskanization" of the fleet and processing work forces or from additional value added processing of the harvest. However, management policies could reduce Alaska employment, for example by limiting participation in the fisheries while allowing more efficient harvesting techniques. International competition, from farmed seafood and from unexploited stocks (such as those in Siberia) could continue to reduce the value of Alaska stocks. FOREST PRODUCTS. The export of unprocessed timber remains the most economically viable option for this industry in the foreseeable future, but the size of the industry is constrained by the availability of the resource. There are an growing number of very small firms which emphasize value added processing- for example, extremely precise lumber for Japanese home builders or high quality wood panels for musical instrument makers. While the number of these firms is growing, their extremely small size precludes their having a major effect on the state's economy. MINING The mining industry may finally be beginning to fulfill its promise as an important basic industty in Alaska. The general lack of infrastructure at most sites, high construction and operating costs at remote sites, and distance from markets, means that only the largest deposits can be successfully developed. Furthern1ore, they must be able to withstand the dramatic price fluctuations experienced in world metal and coal markets due to world business cycles. However, the mineral potential of Alaska has long been recognized; and the combination of a large base of prospects, increasing world demand, and technological advances will result in growth in production. This is reflected in the current activity level in this indusl!y around the state and particularly in Southeast and Interior Alaska. The development of the Fort Knox mine outside Fairbanks, the reopening of the Greens Creek mine outside Juneau, and the expansion of the Red Dog Mine in the Northwest are the most visible examples of this interest. Econo111ic/Den1ographic Projections ISER, March 97 29

38 TOURISM. The tourism industry is likely to continue its rapid growth for a number of years before slowing to a more gentle pace. Two factors are driving the growth in the number of visitors: growth of demand for tourism in the US and abroad and the increasing market share being drawn to Alaska because of continuing development of the tourism infrastructure - hotels, visitor centers, etc.- in the state. The impact of tourism on the economy depends not only on the number of visitors, but also on how long they stay in the state and how much they spend per day while here. The industry is working hard to increase both of those parameters. FEDERAL GOVERNMENT Although the trend in active duty employment is downward, a future increase in manpower levels is certainly possible in Alaska if troops are returned to the United States from abroad as a cost cutting measure. Furthennore, continued unrest in many parts of the world could lead to a need for additional manpower in the future. Also, a new hospital is under construction in Anchorage at Elmendorf Air Force Base which will serve a large part of the Pacific region, and some increases in manpower will be required to staff that facility. This development underscores not only the fact that military capital expenditures are an important source of employment for the construction industry, but also that there is a trend toward the upgrading of the types of jobs reflected in the manpower figures. The hospital staff will include a larger complement of higher paid officers than manpower lost earlier at Fort Richardson. This has been reflected in a sharp increase in the ')Verage annual wage in the military in Alaska in recent years. In spite of some recent reduction in the number of federal employees in Alaska the federal government presence in the state is likely to increase in the future consistent with the longer term trend in this sector for several reasons. Federal civilian employment in certain agencies such as the US Postal Service will respond to growth in the population of the state. Other agencies such as the US Department of Interior will experience increasing levels of activity as the demands on federally owned and managed public resources increase. Civilian employment related to the military is likely to remain important as well. In addition to the presence of many federal agencies within Alaska, the federal government is involved in a number of important programs which impact the economy and annual capital appropriations also help to build the infrastructure of the state as well as provide jobs in construction and other industries. Examples of important federal programs include the bypass mail system which provides below market cost transportation services to many rural communities and the forest service fire suppression program, and federal highway funding. INTERNATIONAL AIR CARGO TRANSSHIPMENT Servicing the air cargo industry is a fairly new basic activity. Alaska's position on the Pacific Rim between the West Coast of the US and Northeast Asia has long been an important asset for the economy. During the l 970's and l 980's Anchorage, and to a lesser extent Fairbanks, served as a refueling stop for international passenger flights between the US and Asia and in some instances between both of those locations and Europe. With the advent of a new generation of long distance jet aircraft and the opening of Soviet airspace to foreign carriers Alaska lost its position as an intermediate stop for traffic over these routes. However, shortly thereafter the Anchorage Econo1nic/I)en1ographic Projections ISER, March 97 30

39 and Fairbanks airports began to benefit from the growing air freight traffic along these same routes. In particular Anchorage has quickly developed into a major freight sorting, training, and maintenance hub for air traffic between the US and Asia. As many as 2 thousand jobs at the International airports in Anchorage and Fairbanks may be attributable to this activity and the prospects for continued growth as the market expands are excellent. INFRASTRUCTURE CONSTRUCTION With a lower rate of growth in employment and population projected for the foreseeable future, the level of activity in the construction industry will be somewhat smaller in relation to the overall economy than it has been in the past. It will continue to be the most volatile sector of the economy since large construction projects, funded either by private or public funds, by their nature do not occur smoothly over time. TRANSPORTATION. Growth transportation employment has closely followed that of the overall economy and that relationship can be expected to continue in the future. PUBLIC UTILITIES. We expect this industry to continue to expand slowly with the continued development of the economy of the state. BUSINESS SERVICES. We expect Business Services to continue to be one of the more rapidly growing industries in the future. Local providers can expand by earning a greater market share away from firms in the lower 48; by taking advantage of a growing market as firms outsource more work, and by providing new services which emerge with changing technology. SUPPORT TRADE, SERVICES AND FINANCE We expect the trade, service and finance industries to continue to be among of the strongest growth sectors of the economy, particularly health services and services to tourists and other visitors. An increasing share of consumer expenditures is for services both nationwide and in Alaska, and this trend is expected to continue. Growth in other services to residents will be slower than in the past due to the general slowing of the growth in disposable income and the fact that the market for many types of services, at least in the larger urban areas, has been saturated. However, growth in service oriented proprietors will continue to grow as the economy grows and the opportunities for self employment expand. MISCELLANEOUS MANUFACTURING Growth in manufacturing will continue to be hampered by high costs and small market size and new entrants will continue to be those firms that can identify a small niche market. Econon1ic/I)e111ographic Projections ISER, March 97 31

40 STATE AND LOCAL GOVERNMENT In the past, local government employment growth has been driven by population growth. Since local governments are highly dependent on state financial assistance, that close link may not continue into the future. In recent years the ability of state government to provide increasing amounts of revenue sharing, municipal assistance, and tax sharing has evaporated and local governments without their own tax base have been hard pressed to expand or even maintain service levels. The one area where state assistance will most readily continue to flow is education which comprises a large share of local government employment. Furthermore local governments' ability to finance capital expenditures is limited and dependence on state assistance in this area will also result in a reduction in historical levels of expenditures by local governments on infrastructure maintenance and improvements. The future growth of state government employment depends on the fiscal policies the state adopts in response to declining oil revenues. ~ z Q ~ ~ "' $2,500 $2,000 $1,500 $1,000 $500 FIGORE 21. STATE GENERAL FOND REVENOE FORECAST.... j L......j :!...!...!,: BILLION$ (1996$) ; r,,,... [.! j..., FALL 1995 ALASKA DEPARTMENT OF REVENUE I LOW +MID HIGH I Revenues from petroleum production account for 85 percent of the state general fund budget and about l-in-3 jobs in Alaska can be traced to state government spending. Over the long term, petroleum production will continue to decline and this will continue to have a major impact on the economy as it translates into declining real state general fund revenues (Figure 21 ). Other resource industries are too small, and without enough growth potential, to fill the void in state funding left by declining petroleum revenues. Whereas in the past increasing state expenditures fueled by expanding petroleum revenues contributed significantly to economic growth, the loss of petroleum revenues is now beginning to create a "fiscal drag" on the economy. We can't be sure exactly how the loss of petroleum revenues will impact the economy because it is difficult to predict either the future amount of petroleum revenues the state will take in or the adjustment policies state and local governments will adopt to deal with declining revenues. Up to now, the main response has been to try to minimize growth in the state operating budget and use cash reserves to balance the budget. However, more comprehensive adjustments will be necessary when these cash reserves have been depleted. Econon1ic/De1nographic Projections ISER, March 97 32

41 State petroleum revenues are based upon production, price, and the tax and ownership regime. Some analysts believe that trends in one or more of these factors will maintain or even increase state revenues. Although oil companies continue to develop new fields, none of these has the potential to do more than slow the projected decline in production. Also, we believe that the price will be relatively stable in the long run, although it is quite volatile in the short. State tax and royalty rates have changed numerous times in the past, but we assume no changes in the future that would significantly change effective rates. Federal policy also influences state petroleum revenues, most notably the recently lifted export ban on North Slope crude oil. We assume no change in federal policy affecting state petroleum revenues except the eventual opening of ANWR to exploration. In addition to taxes and royalties on current production, oil companies have paid the state several hundred million dollars in each of the last several years from the settlement of various legal disputes. This inventory of ontstanding cases has been greatly reduced, and the state has accumulated almost $3 billion in cash reserves. This balance will be spent over the next several years to cover general fund deficits anticipated at several hundred million dollars annually. $14 L FIGURE 22. PERMANENT FUND BALANCE BILLION 1995 $ $12 L-_,... """""" $10 L ~. $8 L... ::::: -... $6 :::: - $4 L =... ::.. :: ":::'."' $2 L.....r::::i $0 L_..L..i. ~,,..,J ~_l ll ; 1_l. lj 1 _l : ll. i... ll. _l.. ~ ll ll 1 J.ll '.Ll.J '_l'ljj.ll 'J.ll 'J.ll 'J.ll 'J.ll 'J.ll ' 1.ll 'J.ll 1 'J.l J' 1~1-1m1~1-1a1-1=1_1_1_ START OF YEAR BALANCE EXCLUDING UNDISTRIBUTED!NCOMEACCOUNT BALANCE AND UNREALIZED GAINS state royalties from petroleum and other resources, In contrast to the decreasing trend of petroleum revenues, the Alaska Permanent Fund, with a balance of about $16 billion (excluding the earnings reserve and unrealized capital gains), can provide increasing revenues (although these are not general fund revenues) (Figure 22). As in the past, its growth in real terms will come from two sources: deposits of a share of reinvestment of earnings in excess of the amount used for the Permanent Fund Dividend and for "inflation proofing'." Because of declining oil revenues, the future growth of the Fund is expected to be modest compared lo the past. Nonetheless, its annual earnings constitute a large and stable source of income for Alaska and will be an important element in any strategy to mitigate the effects of declining petroleum revenues. We assume a continuation of the conservative investment policy of the Fund and a stable 5 percent annual return after inflation. In response to declining petroleum revenues we assume that state government is successful in keeping the budget from growing in real terms but is unable to actually cut the budget. We as- 1 Price inflation reduces the purchasing power of the fund each year. Deposits 1nade to increase the no111inal size of the fund so as to tnaintain its purchasing power in real tcrn1s are inflation proofing. Econon1ic/De111ographic Projections ISER, March 97 33

42 sume that significant budget reductions take place only in the event that a combination of asset liquidations, tax increases, and efficiency measures proves inadequate to balance the budget. The timing of the introduction of taxes, use of Pemrnnent Fund, and liquidation of the Constitutional Budget Reserve thus depend primarily on the level of petroleum revenues. The combined effect of these fiscal measures is to cushion the state economy from the full effects of the reduction in petroleum revenues. Employment in government falls, as does the importance of public programs in the economy, but this is at least partially offset by efficiency gains in service delivery and the use of financial assets. State government spending-operations, capital expenditures, transfers to local governments, transfers to individuals, loans to business and individuals- will no longer contribute to economic growth as was the case in the past. Local governments are also large employers and are heavily dependent on state transfers to support their programs. Declining state transfers to local governments will limit their ability of to expand services and will force them to look for new sources of revenue as well. One important assumption is the continued existence of the Pennanent Fund at the same time that there is a decline in government expenditures and the Permanent Fund dividend. The Fund's continued existence provides an imp01iant source of income to Alaska and Alaskans, but it is possible that it would not survive the difficult transition which declining revenues might impose. "Cashing out" of the Fund in the short run would eliminate it as a source of income in the longer term, and this would have significant consequences for any economic projection- providing a temporary stimulus to the economy as long as Permanent Fund-supported government spending were available, but followed by a severe economic slump. There is no assurance that state government will respond to declining petroleum revenues in the way which effectively smooths the effects of declining oil revenues. There is a tendency in representative government to postpone the politically painful decisions associated with budget reductions until a crisis arises. However, the special contributions to the Pennanent Fund in the 1980s demonstrated that Alaskans could balance future public sector needs against pressing present demands. Thus, our assumption that the state will be successful in managing its fiscal future is at least partially supported by past experience. THE NATIONAL ECONOMY AND POLITICS Trends in the national economy have an important influence on the growth of the Alaska economy. First, a large portion of the exports of the state are sold in the lower 48, so the strength of Alaska export industries, particularly tourism, depends upon the general health of the US economy. Second, the growth in real wage rates at the national level, which is driven by productivity increases, directly influences growth in real wages in Alaska. If real wages grow nationally, Alaska real wages will also grow to maintain parity. Higher real wages would in turn contribute to increased purchasing power for Alaskan consumers. Third, unemployment in the rest of the nation influences the size of the labor force in Alaska. Higher national unemployment causes more people to consider Alaska as a place to look for work. Finally, the size of the federal budget has an important influence on the Alaska economy since Alaska receives more in federal expenditures per capita than any other state. In our projections, we assume no significant changes in long-term national economic trends for these variables. Eco110111ic/Dcn1ographic Projections ISER, March 97 34

43 Because of the large military and federal civilian work forces, the large share of federally owned and managed natural resources, the large Native American population, and the fact that Alaska has only recently become a state, the federal government plays an important role in the Alaska economy. In general, we assume no major departures from cmrnnt policies in these and other areas, such as the legal structure of the Alaska Native C01porations and the by-pass mail system of the US Post Office, which provides subsidized freight service to mral Alaska. We do assume that the federal cost of living adjustment (COLA), paid to a large share of federal employees in Alaska, gradually declines from its current level of 25 percent to 15 percent. WAGES, PERSONAL INCOME, AND PRICES The real average annual civilian wage is projected to decline modestly in the future as employment continues to shift towards lower wage industries, downward pressure continues on wage rates from slower growth in employment opportunities, and the cost of living differential between Alaska and the U.S. continues to narrow. Income from non-wage sources is expected to continue to grow, but at a slower pace than historically. Dividend I interest I rent income will increase as the population ages (older people have more of this non-wage income, having accumulated more wealth). There will be less growth in transfers, due to the likely reduction in the Permanent Fund dividend and other state government transfer programs, and the inability of the federal government to finance the continued expansion of entitlements such as Medicaid and Medicare at the same rates as in the past. The slowdown in growth of these non-wage components of income will impact household income and slow growth of support employment. At some point, income will briefly increase, because of the distribution of the Exxon Valdez oil spill lawsuit settlement. This will provide large payments to a significant number of Alaskans. Although the settlement amounts to about $5 billion, the amount which it would add to Alaskans' incomes is unknown since the decision is under appeal and some recipients are not Alaska residents. We assume $1 billion will be added to Alaskan incomes from this source at the end of the decade. Real per capita income will remain relatively constant, reflecting these opposing trends in real wage rates and non-wage income. However, real per capita disposable income will fall slightly with the re-imposition of the personal income tax, which we assume will occur within the next five years. There will continue to be significant differences in the level of per capita personal income across the communities of the state as well as in the sources of income. Incomes tend to be higher in the larger urban areas where the diversification of sources is the highest. The more rural parts of the state are and will continue to be more dependent on federal and state government sources of mcome. The price level in Anchorage is about 15 percent above the national average. This is down from 46 percent above in 1961, 34 percent in 1970, and 29 percent in The downward trend in the cost of living differential is attributable to an increase in market size in the state which results in competition in consumer and labor markets and economies of scale. These trends are expected to continue, albeit at a slower rate so that the price level in Anchorage will move closer to, but I~conon1ic/Den1ographic Projections ISER, March 97 35

44 not fall to, the national average. In outlying and rural areas the cost of living is higher than in Anchorage. These differentials will persist due to the small size and remoteness of much of the state. Because the price level is expected to move marginally closer to the national average, inflation will closely track the national average as well. Econornic/I)en1ographic Projections ISER, March 97 36

45 MODEL ASSUMPTIONS Three projections of economic and demographic growth have been prepared for the Alaska Department of Transportation planning process. The medium case is driven by the combination of assumptions about future levels of natural resource industry production and other variables most likely to occur. The high case is based on more optimistic assumptions and the low case, slower growth assumptions. Together these three cases should bracket the likely range of possible future growth paths for employment, population, and other variables of impmiance for Department of Transportation planning purposes. Table 19 below summarizes important assumptions which differ between the 3 scenarios. Detail on the assumptions and outputs for each case are presented in a separate table at the end of this appendix. Table 19. Summary of Selected Assumptions which Vary Across Cases Assumption Low Case Medium Case High Case Petroleum Similar to Ak DoR Fall '96 Low Ak DoR Fall '96 Mid Case Constant Nominal $ Taxes Case Oil Litigation $1.65 Billion in '96 -'00 Same as Low $1.8 Billion in '96 -'00 & 500 Mil- Settlements lion '01-'05 North Slope Declines to 2, 780 by '00 and Declines to 3,200 by '96 and Increases to 4,600 by '00 and Employment then constant then constant then constant Cook Inlet Em- Constant 1,200 Constant 1,200 Increase to 1 ADO ployment HQ Employment Constant at % Annual increase 2% Annual Increase ANWR No Action Exploration in '98 Exploration; Production commences '05, nominal $450 million annual state revenues Us of North None Some; 1,000 jobs after '05 TAGS construction '05 - '10, Slope Gas empl peaks at 7.202; Operations empl at 1, 130; $400 million nominal in state revenue Mining Employs 1900 by '00; 2,000 by 2,600 jobs by '00; 3,000 by '15 3,300 jobs by '00; 4,200 by '15 '15 Federal Em- Military declines 1 % annually Military constant; civilian in- Military increases 1 % annually; ployment and Ft. Richardson closes; ci- creases.25% annually civilian increases.5% annually vilian increases.25% annually Seafood Har- Employment declines 1 % per Jobs constant Harvesting Empl constant; procvesting/ proc- year essing grows somewhat in '90s essing then constant Tourism Expenditures grow 4% annually Expenditures grow 5% annually Expenditures grow 7% annually through '00, then 3% annually through '00, then 4% annually through '00, then 5% annually through '10, then 2% annually through '10, then 3% annually through '10, then 4% annually Perm Fund Real 4% annually 5% annually 6% annually Rate of Return Perm Fund Divi- Dividend total spending cut from Dividend total spending cut from Dividend total spending cut from dend 50% of earnin s to 12.5% 50% of earnin s to 25% 50% of earn in s to 37.5% I~conon1ic/Den1ographic Projections ISER, March 97 37

46 MODEL PROJECTIONS Detailed state and regional projections for the three cases are presented at the end of this appendix. MEDIUM CASE Table 19 summarized the results of the medium case. Total employment, including both wage and salary employment and self employed workers, grows slightly faster than 1 % annually between 1996 and more slowly in the near term and somewhat more rapidly in the subsequent years. This is slower growth that Alaska has experienced historically, but consistent with the historical pattern of deceleration of the growth rate over the last three decades. This deceleration is the result of the maturation of the economy, the maturation of the petroleum industry, and the fiscal constraints impacting state and local government. Growth will continue in spite of a continued decline in oil production due to the depletion of the Prudhoe Bay field. Employment growth will be concentrated in the support sector of the economy- trade, services, and finance--- consistent with the historical pattern and with national trends. Infrastructure employment- construction, transportation, public utilities, and business services- will grow more slowly. The 1.3 percent growth rate is the result of three different trends. Construction employment is almost flat. Although this is an area in which the actual future is likely to be more volatile than the smooth projection, there are no major long-term public or private projects in the medium case which would boost construction employment for a sustained period. Transportation, communications and public utilities will grow about as fast as population and real income. Business services, although small, grows extremely rapidly and is projected to add over 2,000 jobs to the economy by Basic sector jobs and state/ local government employment will grow more slowly. The basic sectors where job growth will occur include oil and gas, mining, tourism, air freight transportation, and federal government (civilian employment). Employment levels in the seafood, timber, and military sectors are assumed to remain relatively constant over time. Oil and gas employment will grow despite projected declining production levels because exploiting marginal fields and marginal reserves within known fields demands more labor intensive practices than current production does. The other basic sectors will reflect the trends discussed above. Real income growth will surpass employment growth in spite of the economy's shift towards relatively lower wage employment opportunities in trade and services. The aging of the population will bring growth in non-wage income, since older households get a larger share of their income from non-labor sources such as retirement plans. Between 1996 and 2020, although wage and salary payments will grow at just under 1 percent (slightly slower than wage and salary employment growth of 1.2 percent), transfers will grow at 2.3 percent and dividend/ interest/ rent income at 3.8 percent. Econon1ic/De111ographic Projections ISER, March 97 38

47 TABLE 19. ECONOMIC AND DEMOGRAPHIC PROJECTIONS MEDIUM CASE Alaska Statewide Summary Statistics Population (000) Households (000) Real Personal Income (millions of 1995 $) $15,139 $16,305 $18,286 $22,403 $24,841 Wage & Salary Employment (000) Growth Rates Population 1.0% 1.4% 1.8% 1.5% Households 1.2% 1.5% 1.8% 1.6% Real Personal 1.9% 1.2% 2.1% 1.6% Wage &Salary Employment 0.8% 1.0% 1.6% 1.2% Statewide Employment by Sector Total Basic Infrastructure Support State I Local Govt Growth Rates Total 0.8 /,, 0.9% 1.5% 1.1% Basic 0.8% 0.9% 0.8% 0.8% Infrastructure 0.4% 0.9% 1.9% 1.3'% Support 1.7% 1.1% 2.1% 1.6% State I Local Govt. -1.5% 0.6% 0.7% 0.3% Urban & Rural Statistics Urban Alaska Population % Households % Real Personal Income $10,878 $16, % Wage &Salary Employment % Rural Alaska Population % Households % Real Personal Income $4,261 $6, % Wage &Salary Employment % Econon1ic/Den1ographic Projections ISER, March 97 39

48 In the past, population and household growth in Alaska have tracked employment growth as migrants entered and left the state following economic opportunities (compare figures 4 and 17). Migration will continue to be a major factor in Alaska's population growth, as the means for the labor market to clear. When Alaska's employment growth exceeds its labor force growth, net inmigration will provide the workers to fill the jobs. When employment growth is slower, net outmigration will reduce the labor supply. However, population and household growth will actually exceed that of employment due to the rapid growth in the population over 65 and the aging of the working age population. The older cohorts in the working age population tend to have lower labor force participation rates. So, migration and natural increase will ensure population growth keeps up with employment growth, and increasing numbers of older residents not in the labor force will push the growth rate even higher. As a result the dependency ratio- the ratio of children and senior citizens to the working age population- will increase. Household growth will exceed population due to a continued, albeit slow, decline in the average household size. The regional patterns of growth will diverge from the state projections. Both economic and demographic growth will be fastest in the Southcentral-Interior region, somewhat slower in the Southeast, and slower still in the Western Arctic region (Tables 20A and 20B). The reasons for this are clear when reviewing our general expectations for the statewide economy's future. The Southcentral-Interior contains significant shares of the state's likely growth industries in the basic sector. Oil and gas, which will continue to drive the economy and generate increasing employment even with decreasing production, is extracted, transported, and headquartered all in this region. There are some of the state's largest tourist attractions, and the great majority of visitors who arrive by air or land visit here. The fledgling air freight transshipment industry is almost entirely in Anchorage and Fairbanks. In addition air, land and rail transportation infrastructure give the Southcentral-lnterior region an advantage in supplying infrastructure and support goods and services to remote areas both within and outside the region. For these reasons, the Southcentral-Interior region will capture four out of five new residents, jobs and dollars of real income- somewhat more than its current 70 to 75 percent share. The Southeast economy has Jong been dominated by fishing, timber, and state government, industries for which little growth is projected. However, tourism, the fastest growing basic industry, is also a major, if seasonal, part of Southeast's economy. The majority of cruise visitors to the state travel largely or completely in the southeast. Mining is another industry which will fuel continued economic growth; the southeast region will see two out of three new mining jobs statewide, adding I, 100 of these jobs by The Western Arctic region is the least economically developed of the three, and will continue to be so. The southern portion of the region is dominated by seafood harvesting and processing, which is projected to continue at current levels. In the north, employment both at the Red Dog mine and on the North Slope oil fields (a portion of which are in this region) will add 1,500 new jobs by Most new jobs, like most jobs at present, will be in the support and state and local government sectors. State and local government is especially important in the Western Arctic regional economy, and its very slow projected growth due to fiscal constraints will be reflected in the region's slow employment growth. Econon1ic/J)c111ographic Projections ISER, March 97 40

49 In each region, as statewide, population growth rates exceed employment growth, and household growth rates exceed population growth. The Western Arctic region, which cmtently has the largest households and youngest population of the three regions, shows the greatest difference in rates. TABLE 20A. REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS MEDIUM CASE POPULATION (000) Southeast Total '% Urban % Rural % Southcentral-Interior Total % Urban /i, Rural l 1.9% Western Arctic Total % Urban % Rural % HOUSEHOLDS (000) Southeast Total % Urban % Rural % Southcentral-Interior Total % Urban % Rural % Western Arctic Total /i, Urban 'Yo Rural % Econo1nic/De111ographic Projections ISER, March 97 41

50 TABLE 208. REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS MEDIUM CASE REAL PERSONAL INCOME (MILLIONS OF 1995 $) Southeast Total $2,083 $3, % Urban $1,607 $2, % Rural $475 $ % Southcentral-lnterior Western Arctic Total $11,445 $17, % Urban $8,929 $13, % Rural $2,516 $4, % Total $1,612 $2, % Urban $341 $ % Rural $1,270 $1, % WAGE & SALARY EMPLOYMENT (000) Southeast Total %, Urban % Rural % Southcentral-lnterior Western Arctic Total % Urban o;., Rural % Total % Urban % Rural % Econon1ic/Den1ographic Projections ISER, March 97 42

51 Urban and rural areas, when looked at in aggregate, show similar growth patterns. Employment and wage growth rates are the same in urban and rural Alaska. This is not surprising considering that although support and infrastructure employment tends to be concentrated in urban areas, North Slope oil fields and mining-- two significant contributors to jobs growth- are in rural areas. Tourism, a major growth industry, exists in both urban and rural areas. Also, our definitions of rural and urban are necessarily made at the census area level. This leaves many of Alaska's small regional centers, such as Nome, Kotzebue, Bethel and Dillingham, in the rural designation. These communities perform urban functions within their regions, providing significant amounts of the support and infrastructure sectors, as well as many federal, state and local government jobs. Rural Alaska does show higher population growth rates than urban Alaska. Much of this difference is because a share of the population growth stimulated by job growth in Anchorage is allocated to the Matanuska-Susitna Borough, which is designated as rural. This means that the largest urban job growth center is generating rural population growth. Since together these two census areas comprise half the state, this affects the statewide as well as the regional statistics. Household growth rates are also higher in rural than in urban areas, and the disparity is greater than that of population growth rates. This does reflect a genuine difference between urban and rural Alaska. All the differences in household composition between the U.S. and Alaska are more pronounced in rural areas. The rate of change towards the national average is also more rapid there. So, for the same population growth, household growth will be more rapid in rural than urban Alaska. Within each region, the urban I rural differences are more a result of the specific census areas designated urban and rural than reflective of any general urban/ rural patterns. In Southcentral Interior, designation of the Matanuska-Susitna Borough as rural shifts that region's rural economy to look more urban than it is. In the Western Arctic region, Kodiak is the only urban census area. In contrast to the more northern part of the region, Kodiak's economy is dominated by seafood and to a lesser extent the Coast Guard base, but the difference does not reflect urban I rural patterns. In southeast, Sitka, Juneau and Ketchikan do function as urban centers for their regions. Since the economy is projected to grow fastest in the support and infrastructure sectors, and these sectors tend to concentrate in urban centers, it follows that in Southeast, we project urban areas will grow more rapidly than rural areas. 11conon1ic/l)e111ographic Projections JSER, March 97 43

52 HIGH CASE In the high case growth in employment is more than double the rate in the medium case (Table 21). In the basic, infrastructure, and support sectors, growth is double the base case, but in the state and local government sector, it is five times higher. In the high case, state and local government employment grows as fast as basic sector employment. The high case assumes ANWR development and North Slope gas sales as well as success at marginal oil field development; these factors combine to keep state oil revenues much higher than in the base case, which in turn supports a much larger level of state government. Basic sector growth results not only from these petroleum assumptions, but also from optimistic assumptions regarding mining and tourism activity. Growth in infrastructure and support employment is stimulated by higher employment growth in the basic sector and also by growth in non wage mcome. As in the medium case, population and household growth slightly exceed the growth rate of employment. The same demographic factors are at work- growth in over-65 age cohort, growth in the older working age cohorts leading to slightly lower overall labor force participation rates, and changing household composition. At the same time the more rapid population growth (bringing more non-native in-migrants to the state) reduces the relative importance of the Native population compared to the medium case. Tables 22A and 22B show the regional data. The urban/rural pattern is almost the same as in the medium case. Employment and income growth are virtually the same, and population and household growth is slightly higher in rural areas. The higher growth rate in the high case is reflected in each of the three regions with the largest differential from the medium case in the Western-Arctic region. The Western Arctic region benefits from the much higher North Slope oil production employment assumptions; it also benefits greatly from the increased state reve- 1mes. State and local government jobs are more important in the Western Arctic economy than in the other two regions, and the relatively higher level of state government in the high case would benefit this region the most. Econo111ic/Dcn1ographic Projections ISER, March 97 44

53 TABLE 21. ECONOMIC AND DEMOGRAPHIC PROJECTIONS HIGH CASE Alaska Statewide Summary Statistics Population Households Real Personal Income (95$) $15,139 $16,989 $23,893 $32,673 $39,011 Wage &Salary Employment Growth Rates Population 1.6% 3.3% 2.4% 2.7% Households 1.8% 3.4% 2.6% 2.8% Real Personal Income 2.9% 3.5% 3.2% 3.3% Wage &Salary Employment 1.7% 3.1% 2.4% 2.6% Statewide Employment by Sector Total Basic Infrastructure Support State I Local Govt Growth Rates Total 1.7% 3.0% 2.3'Yo 2.5% Basic 2.2% 1.9% 1.2% 1.6% Infrastructure 1.2%, 3.0% 2.8% 2.6% Support 2.7% 3.6% 3.2% 3.3% State I Local Govt. -1.4% 3.2% 1.2% 1.6% Urban & Rural Statistics Urban Alaska Population % Households % Real Personal Income (1995 $10,878 $23, % $) Wage & Salary Employment % Rural Alaska Population %i Households % Real Personal Income (1995 $4,261 $9, % $) Wage & Salary Employment % Econo111ic/De111ographic Projections!SER. March 97 45

54 TABLE 22A. REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS HIGH CASE Population Southeast Southcentral-Interior Total % Urban % Rural % Total % Urban /o Rural % W cstcrn Arctic Total % Urban % Rural % Households Southeast Total %, Urban % Rural % Southcentral-Interior Total % Urban % Rural % Western Arctic Total % Urban % Rural % Econo111ic/l)e111ographic Projections ISER, March 97 46

55 TABLE 228. REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS HIGH CASE, Cont'd Real Personal Income Southeast Total $2,083 $4, % Urban $1,607 $3, % Rural $475 $ % Southcentral-Interior Total $11,445 $25, % Urban $8,929 $19, % Rural $2,516 $5, % \Vestern Arctic Total $1,612 $2, % Urban $341 $ % Rural $1,270 $2, % Wage &Salary Employment Southeast Total l 2.4% Urban % Rural % Southcentral-Interior Total % Urban % Rural 35. l %, Western Arctic Total % Urban % Rural % E.conon1ic/l)en1ographic Projections JSER, March 97 47

56 LOW CASE In the low case wage and salary employment growth is at a rate about half of the medium case (about 0.5 percent annually) and total employment growth even slower (0.4 percent). The difference in rates indicates that self-employment is growing even more slowly. Although proprietors involved in the tourist industry increase, commercial fishermen have an assumed decrease of 1 percent per year. Basic sector employment actually declines in the late 90s (Table 23) before growing at a slow but increasing rate from 2000 to This contrasts with the steady percent growth in medium case basic employment throughout the forecast period. State and local government employment follows similar patterns in the low and medium cases, but the decline in the late 90s is less and the growth from 2000 to 2020 is also less in the low case than in the medium. The decline is less because as other state revenues decline, we assume the income tax is reimposed in 1998 in the low case compared to 2001 in the medium case. Income tax revenues slow the decline. Growth is less because all state revenues- including the income tax once it is reimposed- grow more slowly in the low case. Support and infrastructure are the growth sectors in the low case (as in the medium and high cases). Population growth will generally support increased employment in these sectors even when other sectors of the economy aren't growing. However, in the late 90s, when both basic and state and local government sectors are declining, support and infrastructure decline as well. During this period of economic contraction, the population also declines as workers Jacking employment opportunities migrate out of the state. Due to natural increase and to a reluctance to migrate on the part of rural and Native Alaskans, population decline is more moderate and later growth is more rapid than employment growth. For the same reasons, population growth is more rapid in rural than in urban Alaska. The regional pattern of growth is unchanged in the low case (Tables 24A and 24B). However the rate of employment growth in the Western-Arctic region in this case is virtually flat. This does not prevent population growth in this region, particularly in the rural parts of the region. Econon1ic/Dc111ographic Projections ISER, March 97 48

57 TABLE 23. ECONOMIC AND DEMOGRAPHIC PROJECTIONS LOW CASE Alaska Statewide Summary Statistics Population Households Real Personal Income (95$) $15,139 $15,454 $16,278 $18,104 $18,650 Wage &Salary Employment Growth Rates Population -0.1% 0.9% 1.0% 0.8% Households 0.3% 1.1% 1.0% 0.9% Real Personal Income (95$) 0.5% 0.5% 1.1% 0.7% Wage &Salary Employment -0.4% 0.5% 0.8% 0.5% Statewide Employment by Sector Total Basic Infrastructure Support State I Local Govt Growth Rates Total -0.6% 0.4% 0.7% 0.4% Basic -0.6% 0.1% o.1o;., -O.oo;., Infrastructure -1.1% 0.6% 1.3% 0.6% Support -0.1% 0.6% 1.1% 0.7% State I Local Govt. -1.2'% 0.4% 0.3% 0.1% Urban & Rural Statistics Urban Alaska Population %, Households % Real Personal Income (95$) $10,878 $12, %1 Wage &Salary Employment % Rural Alaska Population % Households % Real Personal Income (95$) $4,261 $5, % Wage &Salary Employment '% I~conon1ic/Den1ographic Projections ISER, March 97 49

58 LOW CASE POPULATION Southeast Total % Urban % Rural % Southcentral-Interior Total % Urban % Rural % Western Arctic Total % Urban % Rural % HOUSEHOLDS Southeast Total % Urban % Rural % Southcentrnl-Interior Total % Urban % Rural % Western Arctic Total % Urban % Rural % Econo111ic/Den1ographic Projections ISER, March 97 50

59 TABLE 248. REGIONAL ECONOMIC AND DEMOGRAPHIC PROJECTIONS LOW CASE REAL PERSONAL INCOME Southeast Total $2,083 $2,426 Urban $1,607 $1,906 Rural $475 $ % 0.7% 0.4% Southcentral-Interior Total $11,445 $13,943 Urban $8,929 $10,648 Rural $2,516 $3, % 0.7% 1.1% W estcrn Arctic Total $1,612 $1,735 Urban $341 $334 Rural $1,270 $1, % -0.1% 0.4% WAGE & SALARY EMPLOYMENT Southeast Total Urban Rural % 0.5% 0.1% Southcentral-Interior Total Urban Rural '% 0.5% 0.9% Western Arctic Total Urban Rural % -.03% 0.1% Econon1ic/l)en1ographic Projections ISER, March 97 51

60 SUMMARY AND TRANSPORTATION IMPLICATIONS Economic growth in the next 25 years will continue, but will be slow compared to growth over the last 25. Alaska's growth since statehood has been dominated and defined by exploration, production and transportation of oil. In addition, exploitation of other natural resources - - fish and timber-- also expanded. In contrast, growth in the next 25 years is likely to be driven as much by population growth as by basic industry growth. Only in the high case does growth rate for basic industry employment approach that of the 70s and 80s. That case depends on full development ofn01ih Slope natural gas- a huge resource on the same scale as the Prndhoe Bay oil field. In the most likely scenario basic industry, and indeed all sectors of the economy, grow only about half the rate we've seen in the past. Wage and salary payments will grow more slowly than wage and salary employment. Many new jobs will be in lower paying service occupations, and many be pmi time or seasonal (e.g., new jobs in the fast growing tourist industry). Real income growth will result from growth in Dividend/ interest/ rent income, growing as the population shifts to a greater proportion of older residents, who have more of this type of income. Both past development and future projections include a mix of remote, diffuse development and more concentrated urban development. Tourism and mining in the basic sector, and infrastructure and support jobs in regional hubs will provide growth in rural Alaska in all regions. Headquarters jobs, and infrastructure and support jobs in industries where economies of scale are important will concentrate in urban areas, notably in Anchorage and Fairbanks. As a result, the spatial patterns of settlement and economic activity won't change much, although in all three cases the Southcentral Interior region, already the location of most of the state's jobs and population, will increase its share by a modest amount. This region already has the most developed transportation infrastructure, with road, rail, air and water transportation links already in place. It is these existing transportation facilities that will have to absorb most of the growing demand. A few remote mining operations may demand new transportation links or routes, but in general new transportation demands will be for the improvement of existing links and facilities. The concentration of growth in service industries (tourism in the basic sector, business services in infrastructure and services in support) will tend to shift new transpotiation demands away from freight and cargo facilities and towards transportation of people. The two exceptions to this will be a continued need for increased freight handling capacity at Anchorage and Fairbanks airports (as freight transshipment grows) and ore transport facilities where mines are developed or expanded. 1;conon1ic/l)e1nographic Projections ISER, March 97 52

61 Figure 23. Comparison of MAP Model Projections of Anchorage-Matsu Labor Market Area Population, Old Projection ---New Projection 1---I-listorical Data In Southcentral Interior Anchorage employment growth will lead to Matanuska Susitna Borough (Mat-Su) population growth. Since the Palmer and Wasilla areas house many Anchorage commuters, growth in the Anchorage /Matsu area increases demand on the Parks and Glenn Highways. ISER ran projections from the MAP model for the Mat-Su in as part of the studies for widening the Glenn highway as far north as its split with the Parks highway. At the time, the increased highway capacity was expected to be adequate until Figure 23 shows that the new projection is slightly higher than the original one. The difference is greatest comparing what are now actual numbers for 1992 to The Anchorage -MatSu area population rebounded from the recession of the late 80s faster than ISER had projected; but our currently projected growth is slower than the rate we projected in In the Southeast region, population and economic activity are projected to grow more in the larger communities of Sitka, Ketchikan, and Juneau. Transportation demand between these communities and the larger urban centers of Anchorage and Seattle may increase. Also, as the infrastructure and support sectors of these southeast 'hub' communities expands, transportation demand between them and the smaller towns in their regions will increase. Transportation demand in the Western Arctic will remain diffuse and relatively sparse. Our projections don't imply the emergence of any major new transportation corridors, but rather modest increases in the demand on already existing facilities. 2 Matanuska-Susitna Borough Econon1ic and Demographic Projections, Scott Goldsn1ith and Eric Larson) ISER, April Econon1ic/Den1ographic Projections ISER, March 97 53

62

63 LIST OF SUPPLEMENTAL TABLES Assumptions for Long-Run Alaska Economic Projections Prepared for the Alaska DoT&PF, November 1996 Historical Population by DOT Region Historical Population by Census Area, Parts A through D Historical Personal Income by DOT Region Historical Personal Incon1e by Census Area, Parts A through D Historical Wage and Salary Payments by DOT Region Historical Wage and Salary Payments by Census Area, Parts A through D Historical Wage and Salary Employment by DOT Region Historical Wage and Salary Employment by Census Area, Parts A through D Projection Summary, 1996 DOT Base Case (Medium Case) Employment by Sector, 1996 DOT Base Case (Medium Case) Private Employment, Employment, 1996 DOT Base Case (Medium Case) Government Employment, 1996 DOT Base Case (Medium Case) Population Change, 1996 DOT Base Case (Medium Case) Population Components, 1996 DOT Base Case (Medium Case) State Unrestricted General Fund Revenues, 1996 DOT Base Case (Medium Case) State Government Miscellaneous Variables, 1996 DOT Base Case (Medium Case) Permanent Fund, 1996 DOT Base Case (Medium Case) Local Government Revenues, 1996 DOT Base Case (Medium Case) Components of Real Personal Income, 1996 DOT Base Case (Medium Case) Price Indexes, 1996 DOT Base Case (Medium Case) Population by Labor Market Area, 1996 DOT Base Case (Medium Case) Total Employment by Labor Market Area, 1996 DOT Base Case (Medium Case) Wage and Salary Employment, State and Southeast, 1996 DOT Base Case (Medium Case) Wage and Salary Employment, Southcentral-Intcrior and Western Arctic, 1996 DOT Base Case (Medium Case) Wage and Salary Employment, Urban Census Areas, 1996 DOT Base Case (Medium Case) Population, State and Southeast, 1996 DOT Base Case (Medium Case) Population, Southeentrnl-Interior and Western Arctic, 1996 DOT Base Case (Medium Case) Population, Urban Census Areas, 1996 DOT Base Case (Medium Case) Number of Households, State and Soutl1east, 1996 DOT Base Case (Medium Case) Number of Households, Southcentral-lnterior and Western Arctic, 1996 DOT Base Case (Medium Case) Number of Households, Urban Census Areas, 1996 DOT Base Case (Medium Case) Real Personal Income, State and Southeast, 1996 DOT Base Case (Medium Case) Real Personal Income, Southeentrnl-Interior and Western Arctic, 1996 DOT Base Case (Medium Case) Real Personal Income, Urban Census Areas, 1996 DOT Base Case (Medium Case) MAP State Model Scenario Assumptions, Basic Employment, Parts 1 & 2, 1996 DOT Base Case (Medium Case) MAP State Model Scenario Assumptions, Petroleum Revenues, 1996 DOT Base Case (Medium Case) MAP State Model Scenario Assumptions, Miscellaneous Variables, 1996 DOT Base Case (Medium Case) Petrnleum Employment by DOT Region, 1996 DOT Base Case (Medium Case) Fish Processing Employment by DOT Region, 1996 DOT Base Case (Medium Case) Timber Employment by DOT Region, 1996 DOT Base Case (Medium Case) Military Employment by DOT Region, 1996 DOT Base Case (Medium Case) Federal Civilian Employment by DOT Region, 1996 DOT Base Case (Medium Case) Mining Employment by DOT Region, 1996 DOT Base Case (Medium Case) Projection Summary, 1996 DOT High Case Employment by Sector, 1996 DOT High Case Private Employment, Employment, 1996 DOT High Case Econo111ic/I)c111ographic Projections ISER, March 97

64 Government Employment, 1996 DOT High Case Population Change, 1996 DOT High Case Population Components, 1996 DOT High Case State Unres!Ticted General Fund Revenues, 1996 DOT High Case State Government Miscellaneous Variables, 1996 DOT High Case Permanent Fund, 1996 DOT High Case Local Government Revenues, 1996 DOT High Case Components of Real Personal Income, 1996 DOT High Case Price Indexes, 1996 DOT High Case Population by Labor Market Area, 1996 DOT High Case Total Employment by Labor Market Area, 1996 DOT High Case Wage and Salary Employment, State and Southeast, 1996 DOT High Case Wage and Salary Employment, Southcentral-lnterior and Western Arctic, 1996 DOT High Case Wage and Salary Employment, Urban Census Areas, 1996 DOT High Case Population, State and Southeast, 1996 DOT High Case Population, Southcentral-Interior and Western Arctic, 1996 DOT High Case Population, Urban Census Areas, 1996 DOT High Case Number of Households, State and Southeast, 1996 DOT High Case Number of Households, Southcentral-lnterior and Western Arctic, 1996 DOT High Case Number of Households, Urban Census Areas, 1996 DOT High Case Real Personal Income, State and Southeast, 1996 DOT High Case Real Personal Income, Southcentral-Interior and Western Arctic, 1996 DOT High Case Real Personal Income, Urban Census Areas, 1996 DOT High Case MAP State Model Scenario Assumptions, Basic Employment, Parts I & 2, 1996 DOT High Case MAP State Model Scenario Assumptions, Petroleum Revenues, 1996 DOT High Case MAP State Model Scenario Assumptions, Miscellaneous Variables, 1996 DOT High Case Petroleum Employment by DOT Region, 1996 DOT High Case Fish Processing Employment by DOT Region, 1996 DOT High Case Timber Employment by DOT Region, 1996 DOT High Case Military Employment by DOT Region, 1996 DOT High Case Federal Civilian Employment by DOT Region, 1996 DOT High Case Mining Employment by DOT Region, 1996 DOT High Case Projection Summary, 1996 DOT Low Case Employment by Sector, 1996 DOT Low Case Private Employment, Employment, 1996 DOT Low Case Government Employment, 1996 DOT Low Case Population Change, 1996 DOT Low Case Population Components, 1996 DOT Low Case State Unrestricted General Fund Revenues, 1996 DOT Low Case State Government Miscellaneous Variables, 1996 DOT Low Case Permanent Fund, 1996 DOT Low Case Local Governn1ent Revenues, 1996 DOT Lo\\ 1 Case Components of Real Personal Income, 1996 DOT Low Case Price Indexes, 1996 DOT Low Case Population by Labor Market Area, 1996 DOT Low Case Total Employment by Labor Market Area, 1996 DOT Low Case Wage and Salary Employment, State and Southeast, 1996 DOT Low Case Wage and Salary Employment, Southcentral-Interior and Western Arctic, 1996 DOT Low Case Wage and Salary Employment, Urban Census Areas, 1996 DOT Low Case Population, State and Southeast, 1996 DOT Low Case Population, Southcentral-lnterior and Western Arctic, 1996 DOT Low Case Population, Urban Census Areas, 1996 DOT Low Case Number of Households, State and Southeast, 1996 DOT Low Case Number of Households, Southeentral-Interior and Western Arctic, 1996 DOT Low Case Number of Households, Urban Census Areas, 1996 DOT Low Case Econon1ic/J)e1nographic Projections ISER, March 97

65 Real Personal Income, State and Southeast, 1996 DOT Low Case Real Personal Income, Southcentral-Interior and Western Arctic, 1996 DOT Low Case Real Personal Incon1e, Urban Census Areas, 1996 D01' L,ow Case MAP State Model Scenario Assumptions, Basic Employment, Parts 1 & 2, 1996 DOT Low Case MAP State Model Scenario Assumptions, Petrnleum Revenues, 1996 DOT Low Case MAP State Model Scenario Assumptions, Miscellaneous Variables, 1996 DOT Low Case Petroleum Employment by DOT Region, 1996 DOT Low Case Fish Processing Employment by DOT Region, 1996 DOT Low Case Timber Employment by DOT Region, 1996 DOT Low Case Military Employment by DOT Region, 1996 DOT Low Case Federal Civilian Employment by DOT Region, 1996 DOT Low Case Mining Employment by DOT Region, 1996 DOT Low Case Econon1ic/De111ographic Projections ISER, March 97

66

67 Institute of Social and Economic Research November 1996 ASSUMPTIONS FOR LONG-RUN ALASKA ECONOMIC PROJECTIONS PREPARED FOR THE ALASKA DEPARTMENT OF TRANSPORTATION NOVEMBER 1996 BASE CASE (CE96B) LOW CASE ICE96LI HIGH CASE ICE96H) A. PETROLEUM PRICE AND PRODUCTION ASSUMPTIONS (See graph at end of section) 1. Average Lower 48 North Slope Crude Price $) About $16.50 on average over entire projection period, based on Alaska Department of Revenue Fall 1996 Scenario IDOR.S97M) Not explicitly defined; see fiscal assumptions Not explicitly defined; see fiscal assumptions 2. Production 5 percent annual decline rate million barrels per day in 2010 and.396 million barrrels per day in 2020 (DOR.S97MI Not explicitly defined; see fiscal assumptions Not explicitly defined; see fiscal assumptions B. BASIC INDUSTRY ASSUMPTIONS B. 1. Petroleum 1. Trans-Alaska Pipeline Operating constant. spending employment remains Construction-related declines to maintenance level after 1997 ITAP.S97MI Same as base Same as base 2. North Slope Petroleum Development and Production Employment falls through It subsequently remains constant at 3,200 as marginal fields, requiring more labor, are brought into production and enhanced recovery methods continue to be applied at Prudhoe Bay IONS.S96MI Employment gradually declines to 2, 750 in 2000 and subsequently remains constant at that level (0NS.S95L) Employment increases through the 1990s and remains constant at 4,600 after 2000 as marginal fields, requiring more labor, are brought into production and enhanced recovery methods continue to be applied at Prudhoe Bay IONS.S96H) 3. Cook Inlet Petroleum Production Employment in exploration, development, and production of oil and gas in the Cook Inlet area remains constant at 1.2 thousand IOCl.S95M) Same as base Additional discoveries gradually boost employment to 1.4 thousand (0Cl.S95H) NOTE: Codes in parentheses indicate ISER names for MAP Model SCEN_ case files, and codes in brackets indicate MAP variable names. These are the long-run assumptions. Values may differ in the initial forecast years to reflect short-term conditions. Institute of Social and Economic Research Page 1 November 1996

68 BASE CASE {CE96Bl LOW CASE {CE96L) HIGH CASE {CE96H) 4. Oil Industry Headquarters Headquarters employment in Anchorage and Fairbanks associated with additional development of North Slope and other fields increases 1 percent annually after falling in the mid- 1990s {OHQ.S94MI After falling in the mid-1980s, employment holds constant at 4.5 thousand {OHQ.S94LI After falling in the mid-1990s, employment grows 2 percent annually {0HQ.S94HI 5. ANWR Exploration in ANWR commences in 1998, but no commercial development occurs {OAW.S92M 41 None Development of a major field in ANWR with production commencing after 2005 and nominal revenues of $450 million to the state {50-50 split with Federal government) {OAW.S92H -5) 6. ocs None None Petroleum development offshore on federal lands in the Bering Sea and Arctic areas commences in the late 1990s {0CS.S92H Use of North Slope Gas B.2. Mining Alternative use of North Slope gas results in employment of 1,000 annually after 2005 {ONG.S95M 51 None The "TAGS" pipeline to transport North Slope natural gas to market in Japan is constructed over a 5-year period. Construction begins in Operations begin in The line extends from Prudhoe Bay to Valdez and includes compressor stations, conditioning facilities, and a liquefaction plant and marine terminal. Construction employment peaks at 7,202. Operations employment is 1, 130. Construction and operations employment occurs all along the pipeline corridor. The pipeline produces $400 million (nominal $) in state revenue in first year of operation (TAG.S92M -3). 8. Beluga Coal Production None None Development of a 3.5 million ton/year mine for export, beginning in 2002, results in employment of 375 in 2005 and beyond {MBC.S92M -8). 9. Greens Creek Mine Employment at the Greens Creek Silver Mine on Admiralty Island is constant at 250 after reopening in 1996 {MGC.S96MI Same as base Same as base Institute of Social and Economic Research Page 2 November 1996

69 BASE CASE (CE96B) LOW CASE ICE96L) HIGH CASE ICE96H) 1 0. Red Dog Mine Employment at the Red Dog Lead-Zinc Mine in the Western Brooks Range increases to 420 in the late 1990s (MRD.S96M) Expansion does not occur IMRD.S92MI Same as base 11. Matanuska Valley Coal None None A coal mine in the Matanuska Susitna Valley begins operation in 1999, employing 250 in the extraction and export of coal to Japan (MWH.S92M -3) 12. AJ Mine Echo Bay Mining Company begins production from this gold mine in Juneau in Operations employment is 450 (MAJ.S92M -5) Delayed 1 year from base case (MAJ.S92M 61 Same as base 13. Kensington Mine Echo Bay Mining Company begins production from this mine north of Juneau in Operations employment is 340 IMKN.S92M -5) Exploration only (MKN.S94L -3) Same as base 14. Fort Knox Production from this mine near Fairbanks begins in 1997, employing 250 (MFK.S92M -2) Same as base Same as base 15. Fairbanks Gold Mining Another gold mine in the Fairbanks area opens in late 1990s, employing 200(MFG.S95H+1) None Same as base 16. Other Mining Activity Mining employment net of specifically identified projects increases by 3 percent annually from level of 600 in 1994 (MOT.S93M -4) Mining employment net of specifically identified projects increases 1 percent annually (MOT.S93L -4) Mining employment net of specifically identified projects increases by 5 percent annually (MOT.S93H -4) 8.3. Agriculture 17. Agriculture Employment in agriculture increases 1 percent annually (AGR.S94M) Same as base Same as base Institute of Social and Economic Research Page 3 November 1996

70 BASE CASE ICE96BJ LOW CASE (CE96LJ HIGH CASE ICE96HJ 8.4. Forest Products 18. Logging and Sawmills Logging and milling employment stabilizes at thousand in the late 1990s. There is some growth to offset some of the job loss associated with the Sitka and Wrangell mil! closures. There is also some growth in Southcentral IFML.S95MJ Southeast employment declines 1 percent annually, and there is no replacement of Sitka mill jobs. No growth in Southcentral IFML.S95LJ Same as base except Southeast employment increases.5 percent annually starting in late 1990s IFML.S95HJ 19. Pulp Mills The Sitka and Ketchikan mills remain closed. Modest levels of wood products-related manufacturing develop in both communities (FMP.S97M) The Sitka and Ketchikan mills remain closed. A very small wood products industry remains in Ketchikan IFMP.S95LJ The Sitka mill is reconfigured and reopens in The Ketchikan mill is restructured and opens at a lower employment level than before. Employment is constant (FMP.S96H) 8.5. Seafood 20. Commercial Fish Harvesting Employment in fish harvesting constant at thousand ISFH.S95MJ Employment in fish harvesting declines 1 percent annually ISFH.S95L -21 Same as base 21. Commercial Fish Processing 8.6. Federal Government Employment in processing of fisheries harvest remains constant ISFP.S95MJ Employment declines 1 percent annually ISFP.S95LJ Employment grows in the Southwest and Anchorage in the 1990s and is constant thereafter ISFP.S95HJ 22. Federal Military Employment Strength level remains constant after base closures, which include Fort Greely (FMl.S95MJ Strength level generally declines 1 percent annually and Ft. Richardson closed in the late 1990s IFMl.S95LJ Strength level increases 1 percent annually IFMl.S95HJ 23. Federal Civilian Employment After a near-term contraction, employment increases at.25 percent annual rate consistent with the long-term trend since 1960 IFCV.S96MJ After a near-term contraction, employment declines.25 percent annually (FCV.S96L) After a near-term contraction, employment increases at.5 percent annual rate (FCV.S96H) B. 7. Tourism 24. Tourism Index of tourist visitor expenditures (measuring visitors, days, and real expenditures per visitor day) increases by 5 percent through 2000, 4 percent per year through 2010, and then 3 percent. Tourism-related infrastructure development grows 3% annually (TRN.S96M} Index of tourist visitor expenditures (measuring visitors, days, and real expenditures per visitor day) increases by 4, 3, and 2 percent per year. Tourismrelated infrastructure development grows 3o/o annually (TRN.S96LJ Index of tourist visitor expenditures (measuring visitors, days, and real expenditures per visitor day) increases by 7, 5, and 4 percent per year. Tourismrelated infrastructure development grows 3 % annually ITRN.S96HJ Institute of Social and Economic Research Page 4 November 1996

71 BASE CASE (CE96B) LOW CASE (CE96L) HIGH CASE (CE96H) 8.8. International Freight Handling 25. Air Transport Employment Employment at Anchorage and Fairbanks International airports associated with international freight handling grows to 2000 IAIR.S96M) Same as base Like base case but with continued expansion in Anchorage through 2012 IAIR.S96H) B.9. Miscellaneous 26. Electric Projects Construction of Healy Clean Coal Project outside Fairbanks and intertie upgrades in the mid-1990s (HCC.S96M) in the Railbelt Same as base Same as base with additional intertie construction in Glennallen/Valdez (HCC.S96HI 27. Miscellaneous Construction Employment Various primarily federally funded construction projects, such as rural safe water project and environmental cleanup activities at military sites, produce 500 jobs annually in the long term (CON.S96M) Same as base Same as base C. FISCAL ASSUMPTIONS C.1. Revenues 1. Severance Taxes [RPTS) Based on Fall 1996 projections published by Alaska Oepartment of Revenue (DOR.S97M). No change in tax structure Similar to low case projections from Fall 1995 Alaska Dept. of Revenue report (DOR.S97L) Approximately constant in nominal dollars (DOR.S97H) 2. Royalties [RPRVJ See Severance Taxes Similar to low case projections from Fall 1995 Alaska Dept. of Revenue report (00R.S97L} Approximately constant in nominal dollars IDOR.S97H) 3. Bonuses [RPBSJ See Severance Taxes Same as base Same as base 4. Property Taxes [RPPS] See Severance Taxes Same as base Same as base 5. Petroleum Corporate Income Tax [RTCSPXJ See Severance Taxes Same as base Same as base 6. Petroleum Rents [RPENJ Constant at $9 million (nominal) annually Same as base Same as base Institute of Social and Economic Research Page 5 November 1996

72 BASE CASE ICE96B) LOW CASE ICE96Ll HIGH CASE (CE96H) 7. Miscellaneous Petroleum Settlement Revenues IRP9X] [EXPF9) Alaska receives $1.65 billion over the period FY 1996 to 2000 in settlement of disputed offshore leases in the Beaufort Sea and in settlement of lawsuits and tax disputes regarding the valuation of North Slope oil. These revenues are allocated between the Constitutional Budget Reserve and the Permanent Fund (WIN. S96M) Same as base Alaska receives $1.8 billion between 1996 and 2000, and $1 00 million annually for the next five years (WIN.S96H) 8. Federal-State Petroleum Related Shared Revenues [RSFDNPXJ Constant at $16 million (nominal) annually Same as base Same as base 9. Personal Income Tax IEXPIT] Reimposed over a 2-fiscal-year period at previous level when state general fund revenue shortfalls would otherwise require significant state budget reductions. Income tax is reimposed prior to the time that Permanent Fund earnings are appropriated to the general fund and also prior to elimination of the Permanent Fund Dividend. Same as base Same as base 10. Large Project Corporate Income Taxes [RTCSXJ Zero Same as base Same as base 11. Miscellaneous Local Revenue Sources IRL TX],[RLPTXJ. IRLTFPXJ Miscellaneous state-local transfers, large project property taxes, new petroleum-related federal transfers all set to zero Same as base Same as base 12. New Federal State Shared Revenues IRSFDNX] Zero Same as base Same as base 13. Agency Transfers IAHFC, AIDEA) IRMISXJ $100 million contributed to general fund annually $75 million annual contribution Same as base Institute of Social and Economic Research Page 6 November 1996

73 BASE CASE {CE96B) LOW CASE {CE96L) HIGH CASE {CE96H) C.2. State Appropriations 14. Aggregate Appropriations [EXWIND] [EXRL5] Annual appropriation equals current revenues plus funds in Constitutional Budget Reserve, but not to exceed nominal prioryear expenditure level Same as base Same as base 15. Capital/ Operations Split [EXSPLITX] 90 percent operations; 10 percent capital Same as base Same as base 16. General Obligation Bonds [EXCPSGOB] Bond sales for capita! expenditures occur at a rate which maintains annual debt service payments at a level no more than 5 percent of current state revenues Same as base Same as base 17. Federal Grantsin-Aid {Capital and Operating) [RSFDNJ Growth rate slightly above USCPI Same as base Same as base 18. State Loan Programs [EXKTR1Xl [EXLOAN2] [EXCPSR1] AHFC, AIDEA, and other programs function on existing capitalization Same as base Same as base 19. Municipal Capital Grants [RLTMCAP] None None None 20. State-Local Revenue Sharing [RLTRS] Continuation proportional to total state expenditures Same as base Same as base 21. State-Local Municipal Assistance [RLTMA] Gradual phase-out Same as base Same as base 22. Permanent Fund /Other Special Appropriations in Excess of Spending Limit [EXPFCONXJ [EXGFOPSX] [EXSPCAP] None None None Institute of Social and Economic Research Page 7 November 1996

74 BASE CASE (CE96B) LOW CASE (CE96L) HIGH CASE (CE96Hl C.3. Permanent Fund 23. Permanent Fund Principal [EXPF11 Deposits from petroleum revenues continue at current rates; inflation proofing eliminated when complete withdrawal of nominal earnings commences. Same as base Same as base 24. Permanent Fund Dividend [EXPFDISTI Continued at the rate of 50 percent of earnings averaged over the previous 5 years. After personal income tax is reimposed, dividend is gradually reduced to 25 percent of earnings (cut by half) but not completely phased out. Dividend gradually reduced to 12.5 percent of earnings (cut by three-fourths) Dividend gradually reduced to 37.5 percent of earnings (cut by one-fourth) 25. Permanent Fund Earnings [EXPFTOGFI After payment of the dividend, the remaining Fund earnings {inflation proofing and undistributed income) are added to the corpus of the Permanent Fund. After the personal income tax is reimposed, a gradually increasing share of the earnings are diverted to the genera! fund. Inflation proofing is eventually eliminated. Same as base Same as base 26. Total Real Rate of Return [ROR + RORPPFI 5 percent - This compares to the 5 percent time-weighted historical cash income realized rate of return 4 percent 6 percent C.4. Miscellaneous 27. State-Local Wage Rates [EXWRI Real wage reduced 10 percent over 7 years Real wage reduced 1 O percent over 4 years Real wage reduced 5 percent over 3 years 28. Local Property Tax Rates IRLPTRATE] Increase 10 percent after 2000 Same as base Same as base 29. Federal Costof-Living Adjustment Added to Federal Wages and Salaries [PCOLART] Declines from 25 to 15 percent over the period 1999 to percent annually Same as base Declines to 20 percent over same period Institute of Social and Economic Research Page 8 November 1996

75 BASE CASE (CE96B) LOW CASE (CE96L) HIGH CASE (CE96H) D. NATIONAL VARIABLE ASSUMPTIONS 1. U.S. Inflation Rate [GRUSCPI] 3. 5 percent - Long-term rate consistent with Alaska Dept. of Revenue petroleum price forecast (DOR.S97M) 3.5 percent - Long-term rate consistent with Alaska Dept. of Revenue petroleum price forecast IDOR.S97L) 3.5 percent - Long-term rate consistent with Alaska Dept. of Revenue petroleum price forecast {DOR.S97H) 2. U.S. Real Average Weekly Earnings [GRRWEUS] Growth in real average weekly earnings averages 0 percent annually Growth in real average weekly earnings averages -.2 percent annually Growth in real average weekly earnings averages.2 percent annually 3. U.S. Real Per Capita Income [GRDIRPUJ Growth in real per capita income averages 1 percent annually in excess of real average weekly earnings.8 percent 1.2 percent 4. U.S. Unemployrnent Rate [UUSJ Long-run rate averages 6.5 percent Long-run rate averages 6.25 percent Long-run rate averages percent E. PERSONAL INCOME 1. Exxon Valdez Settlement [PITRANXI Alaska residents receive $1 billion in settlements between 1998 and 2003 Same as base Same as base F. REGIONAL ASSUMPTIONS 1. Population Regional population growth allocated on the basis of existing population and employment growth except for increasing share of Greater Anchorage population growth allocated to Mat-Su Borough Same as base Same as base 2. Employment No significant shifts in the location of support industries except for increasing share of Greater Anchorage support activity to Mat-Su Borough Same as base Same as base Institute of Social and Economic Research Page 9 November 1996

76 BASE CASE ICE96B) LOW CASE ICE96Ll HIGH CASE ICE96H) FISCAL SCENARIO SUMMARY Income Tax Reinstated [EXPIT] Permanent Fund Stepdown Initiated [EXPFDIST] Permanent Fund Earnin gs Transferred to Genera! Fund [EXPFTOGF] Wage Rate Reduction for Govt. Workers Initiated [EXWR] Institute of Social and Economic Research Page 10 November 1996

77 POPULATION IN THOUSANDS SOUTH WESTERN TOTAL SOUTHEAST CENTRAL ARCTIC DOT STATE DOT REGION DOT REGION REGION SOURCE: MAP MODEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page

78 POPULATION IN THOUSANDS, PART A. POPULATION IN THOUSANDS, PART B. NORTH WEST NORTH ARCTIC NOME YUKON- FAIRBANKS SOUTHEAST BRISTOL MATANUSKA SLOPE BOROUGH KOYUKUK FAIRBANKS WADE BETHEL DILLINGHAM BAY ALEUTIAN SUSITNA HAMPTON BOROUGH ISLANDS BOROUGH D SOURCE: MAP MODEL DATABASE SOURCE: MAP MODEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 2

79 POPULATION IN THOUSANDS, PART C. KENAI SKAGWAY- POPULATION IN THOUSANDS, PART D. ANCHORAGE PENINSULA KODIAK VALDEZ- YAKUTAT- HAINES PRINCE OF BOROUGH CORDOVA ANGOON JUNEAU SITKA WRANGELL- WALES- KETCHIKAN PETERSBURG KETCHIKAN SOURCE: MAP MODEL DATABASE SOURCE: MAP MODEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 3 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 4

80 PERSONAL INCOME IN MILLIONS SOUTH ~ES TERN TOTAL SOUTHEAST CENTRAL ARCTIC DOT STATE DOT REGION DOT REGION REGION D DD.O SOURCE' MAP MODEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page

81 PERSONAL INCOME IN MILLIONS, PART A. PERSONAL INCOME IN MILLIONS, PART B. NORTH WEST NORTH ARCTIC NOME YUKON- FAIRBANKS SOUTHEAST BRISTOL MATANUSKA SLOPE BOROUGH KOYUKUK FAIRBANKS WADE BETHEL DILLINGHAM BAY ALEUTIAN SUSITNA HAMPTON BOROUGH ISLANDS BOROUGH D SOURCE: MAP MODEL DATABASE SOURCE: MAP MODEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 2

82 PERSONAL INCOME IN MILLIONS, PART C. KENAI SKAGWAY PERSONAL INCOME IN MILLIONS, PART D. ANCHORAGE PENINSULA KOOIAK VALDEZ- YAKUTAT- HAINES PRINCE OF BOROUGH CORDOVA ANGOON JUNEAU SITKA YRANGELL- WALES- KETCHIKAN PETERSBURG KETCHIKAN B SOURCE' MAP MODEL DATABASE SOURCE' MAP MODEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 3 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 4

83 WAGES AND SALARIES IN MILLIONS SOUTH YESTERN TOTAL SOUTHEAST CENTRAL ARCTIC DOT STATE DOT REGION DOT REGION REGION D D D D SOURCE: MAP MODEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page

84 YAGES AND SALARIES IN MILLIONS, PART A. WAGES AND SALARIES IN MILLIONS, PART B. NORTH WEST NORTH ARCTIC NOME YUKON- FAIRBANKS SOUTHEAST BRISTOL MATANUSKA SLOPE BOROUGH KOYUKUK FAIRBANKS WADE BETHEL DILLINGHAM BAY ALEUTIAN SUSITNA HAMPTON BOROUGH ISLANDS BOROUGH D D D D D D SOURCE: MAP MODEL DATABASE SOURCE: MAP MODEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 2

85 WAGES AND SALARIES IN MILLIONS, PART C. WAGES AND SALARIES IN MILLIONS, PART 0. KENAI SKAGWAY- ANCHORAGE PENINSULA KODIAK VALDEZ- YAKUTAT- HAINES PRINCE OF BOROUGH CORDOVA ANGOON JUNEAU SITKA WRANGELL- WALES- KETCHIKAN PETERSBURG KETCHIKAN SOURCE: MAP MODEL DATABASE SOURCE: MAP MODEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 3 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 4

86 WAGE AND SALARY EMPLOYMENT IN THOUSANDS SOUTH WESTERN TOTAL SOUTHEAST CENTRAL ARCTIC DOT STATE DOT REGION DOT REGION REGION D D D D6.D D D D SOURCE: MAP MODEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page

87 WAGE AND SALARY EMPLOYMENT IN THOUSANDS, PART A. WAGE AND SALARY EMPLOYMENT IN THOUSANDS 1 PART B. NORTH WEST NORTH ARCTIC NOME YUKON- FAIRBANKS SOUTHEAST BRISTOL MATANUSKA SLOPE BOROUGH KOYUKUK FAIRBANKS WADE BETHEL DILLINGHAM BAY ALEUTIAN SUSITNA HAMPTON BOROUGH ISLANDS BOROUGH 197D _ SOURCE: MAP MODEL DATABASE SOURCE: MAP MODEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 2

88 YAGE AND SALARY EMPLOYMENT IN THOUSANDS, PART C. WAGE AND SALARY EMPLOYMENT IN THOUSANDS, PART D. KENAI SKAGYAY- ANCHORAGE PENINSULA KODIAK VALDEZ- YAKUTAT- HAINES PRINCE OF BOROUGH CORDOVA ANGOON JUNEAU SITKA YRANGELL- YA LES- KETCHIKAN PETERSBURG KETCHIKAN SOURCE: MAP MODEL DATABASE SOURCE: MAP MOCEL DATABASE INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 3 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 4

89 TABLE 1. PROJECTION SUMMARY TABLE 2. EMPLOYMENT BY SECTOR (THOUSANDS) 1996 DOT BASE CASE 1996 DOT BASE CASE WAGE AND PERSONAL PETROLEUM INFRA- STATE/LOCAL POPULATION HOUSEHOLDS TOTAL SALARY INCOME REVENUES TOTAL TOTAL BASIC STRUCTURE SUPPORT GOVERNMENT (000) CDOO) EMPLOYMENT EMPLOYMENT (MILLION (MILLION EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT (000) (000) 1995 $) 1995 $) SOURCE: ISER MAP MODEL SIMULATION CE96B, CREATED OCT SOURCE: ISER MAP MODEL SIMULATION CE96B, CREATED OCT POPULATION (POP) IS JULY 1, CENSUS DEFINITION. HOUSEHOLDS CHH) IS JULY 1 (EXCEPT IN 1980), CENSUS DEFINITION. TOTAL EMPLOYMENT CEM99) INCLUDES ACTIVE DUTY MILITARY AND PROPRIETORS PRE 1985 PROPRIETOR DEFINITION. WAGE AND SALARY EMPLOYMENT CEM97) IS ALASKA DEPARTMENT OF LABOR DEFINITION. PERSONAL INCOME CDF.PIB) IS US BEA DEFINITION. PETROLEUM REVENUES CDF.RP9S) INCLUDES PERMANENT FUND CONTRIBUTION ANO WINDFALLS. TOTAL EMPLOYMENT CEM99). BASIC EMPLOYMENT CEM9BASE) INCLUDES EXOGENOUS COMPONENTS OF CONSTRUCTION, MANUFACTURING, TRANSPORTATION, MINING, PETROLEUM, TOURISM, FEDERAL GOVERNMENT, AGRICULTURE, FORESTRY, AND FISH HARVESTING. INFRASTRUCTURE EMPLOYMENT CEM9INFR) INCLUDES TRANSPORTATION, COMMUNICATIONS, PUBLIC UTILITIES, ENDOGENOUS CONSTRUCTION, AND BUSINESS SERVICES NET OF EXOGENOUS AND TOURISM RELATED TRANSPORTATION. SUPPORT EMPLOYMENT CEM9SUPRT) INCLUDES TRADE, FINANCE, SERVICES, LOCAL MANUFACTURING, AND PROPRIETORS NOT ENGAGED IN FISH HARVESTING, NET OF TRADE ANO SERVICE TOURISM EMPLOYMENT ANO BUSINESS SERVICES. GOVERNMENT EMPLOYMENT (EMGA) INCLUDES STATE ANO LOCAL GOVERNMENT. INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 2

90 TABLE 3. PRIVATE EMPLOYMENT {THOUSANDS) TABLE 4. GOVERNMENT EMPLOYMENT {THOUSANDS) 1996 DOT BASE CASE 1996 DOT BASE CASE MINING TRANS., FEDERAL TOTAL AGRIC., AND CONSTRUC- MANUFAC- COMM., TOTAL MILITARY CIVILIAN STATE LOCAL PRIVATE FORESTRY, PETRO- TION TURING PUB. OTHER FISHERIES LEUM UTIL D D _ _ _ D D 161.D63 2DD D 17.D D 20D D 1D D DD D 18.27D 17.D D DD D DD D6 2D D19 2D D D.174 2D10 89.D D D D D D D D D D D D25 95.D D 17.8D D2D D68 2D D SOURCE: ISER MAP MODEL SIMULATION CE96B, CREATEO OCT SOURCE: ISER MAP MODEL SIMULATION CE96B, CREATED OCT PRIVATE {EMPVT) IS ALL NON-GOVERNMENT SPLIT BY ADOL CATEGORIES. AGRICULTURE, FORESTRY, FISHERIES {EMAFF) {INCLUDES PROPRIETORS IN FISHING). MINING ANO PETROLEUM {EMP9). CONSTRUCTION {EMCN). MANUFACTURING {EMM9). TRANSPORTATION, COMMUNICATIONS, PUBLIC UTILITIES {EMTCU). OTHER {EMSUP) INCLUDES TRADE, FINANCE, SERVICE, AND PROPRIETORS NOT INVOLVED IN FISH HARVESTING. TOTAL {EMG9l. MILITARY {EMGM) IS ACTIVE DUTY. FEOERAL CIVILIAN {EMGC). STATE {EMGS) INCLUDES UNIVERSITY OF ALASKA. LOCAL {EMGL). INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 3 INSTITUTE OF SOCIAL ANO ECONOMIC RESEARCH Page 4

91 TABLE 5. POPULATON CHANGE (THOUSANDS) TABLE 6. POPULATION COMPONENTS (THOUSANDS) 1996 DOT BASE CASE 1996 DOT BASE CASE COMPONENTS OF CHANGE CIVILIAN TOTAL NON-NATIVE NATIVE MILITARY TOTAL TOTAL NON POPULATION ANNUAL NATURAL MILITARY MILITARY CHANGE INCREASE MIGRATION MIGRATION 197D D D D D9 197D 3D D D DD n D 48.21D D D D.OOD D D D3 -D D D D D 52.93D D D94 D D D D D D DD D.D DD D D DDD DO 42.5D D.7DO n D D D D D D D SOURCE: ISER MAP MODEL SIMULATION CE96B, CREATED OCT SOURCE: ISER MAP MODEL SIMULATION CE968, CREATED OCT NOTE: POPULATION JS EQUAL TO POPULATION JN PRIOR YEAR PLUS MIGRATION AND NATURAL INCREASE. THE SUM OF COMPONENTS DOES NOT EQUAL THE TOTAL DUE TO ROUNDING IN THE ALLOCATION OF MIGRANTS TO INDIVIDUAL COHORTS. POPULATION (POP) JS JULY 1, CENSUS DEFINITION. ANNUAL CHANGE JN POPULATION CDELPOP) JS YEAR TO YEAR JULY 1 CHANGE. NATURAL INCREASE (POPNJ9) INCLUDES CIVILIAN AND MILITARY. NON-MILITARY MIGRATION (POPMIG). MILITARY MIGRATION (POPMIGM) INCLUDES ACTIVE DUTY MILITARY PLUS DEPENDENTS. POPULATION (POP) JS JULY 1, CENSUS DEFINITION. CIVILIAN NON-NATIVE (CNNTOT). NATIVE (NATTOT) CIVILIAN JS JULY 1 ESTIMATE EXCEPT 1980 JS APRIL 1. MILITARY (MILTOT) JS ACTIVE DUTY PLUS DEPENDENTS. INSTITUTE OF SOCIAL ANO ECONOMIC RESEARCH Page 5 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 6

92 TABLE 7. STATE UNRESTRICTED GENERAL FUND (MILLION 1995 DOLLARS) TABLE 8. STATE GOVERNMENT MISCELLANEOUS VARIABLES (MILLION 1995 DOLLARS) 1996 DOT BASE CASE 1996 DOT BASE CASE REVENUES GENERAL FUND APPROPRIATIONS ITEM: ITEM: PERMANENT CONST EXPEND I INVESTMENT EARNINGS PERSONAL DEBT FUND BUDGET TURES TOTAL PETROLEUM ENDOG INCOME TOTAL OPERATING CAPITAL SERVICE DIVIDEND RESERVE ENOUS GEN. FUND PER. FUND TAX o.o ; SOURCE: ISER MAP MOOEL SIMULATION CE96B, CREATED OCT SOURCE: ISER MAP MOOEL SIMULATION CE96B, CREATED OCT EXPENDITURES (OF.EXGFB) IS UNRESTRICTED GENERAL FUND EXPENDITURES. TOTAL UNRESTRICTED GENERAL FUND REVENUES CDF.RSGFB). PETROLEUM REVENUES (DF.RP9SG) EXCLUDES PERMANENT FUND ANO CONSTITUTIONAL BUDGET RESERVE PORTIONS. ENDOGENOUS REVENUES (DF.RSENG) IS TOTAL NET OF PETROLEUM AND INVESTMENT EARNINGS. INVESTMENT EARNINGS, GENERAL FUND (DF.RSIG) IS EARNINGS FROM ALL SOURCES DEPOSITED IN THE GENERAL FUND EXCEPT PERMANENT FUND EARNINGS. INVESTMENT EARNINGS, PERMANENT FUND (DF.RSIPG). PERSONAL INCOME TAX (OF.RTIS). TOTAL (OF.APGF) INCLUDES SPECIAL APPROPRIATIONS NOT SEPARATELY REPORTED. OPERATING (DF.APGFO). CAPITAL (OF.APGFC). DEBT SERVICE (DF.EXDSS) INCLUDES ONLY GENERAL OBLIGATION DEBT OF STATE. PERMANENT FUNO DIVIDEND (DF.EXTRN). CONSTITUTIONAL BUDGET RESERVE BALANCE - YEAR ENO (DF.BALDF). INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 7 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 8

93 TABLE 9. PERMANENT FUND (MILLION 1995 DOLLARS) TABLE 10. LOCAL GOVERNMENT REVENUES (MILLION 1995 DOLLARS) 1996 DOT BASE CASE 1996 DOT BASE CASE FUND ADDITIONS FROM INTERGOVERNMENTAL TAXES USE OF EARNINGS RESOURCE REVENUES TOTAL CHARGES FUND GENERAL STATE FEDERAL PETROLEUM OTHER AND MISC. EARNINGS SPECIAL BALANCE REVENUE TRANSFERS TRANSFERS PROPERTY PROPERTY OTHER DIVIDEND GENERAL REINVEST FORMULA APPRO FUND BASED PRIATION 1961 o.o o.o o.o o.o 0.0 o.o o.o o.o o.o o.o o.o SOURCE: ISER MAP MOCEL SIMULATION CE96B, CREATED OCT SOURCE: ISER MAP MOCEL SIMULATION CE96B, CREATED OCT EARNINGS (DF.RSIP). PERMANENT FUND DIVIDEND (DF.EXTRN). CONTRIBUTION TO GENERAL FUND (DF.RSIPG). REINVESTED EARNINGS (DF.RSIPPl INCLUDES ALL RESIDUAL EARNINGS AFTER DIVIDEND AND ALLOCATION TO GENERAL FUND. FORMULA-BASED REVENUES (DF.RP7SP). SPECIAL APPROPRIATION REVENUES (DF.XPFCX). FUND BALANCE AT YEAR END (DF.BALPF) INCLUDES EARNINGS RESERVE. TOTAL GENERAL REVENUE (DF.RL99). STATE TRANSFERS (DF.RLT99). FEDERAL TRANSFERS (DF.RLTF). PETROLEUM PROPERTY TAXES (DF.RLPTP). OTHER PROPERTY TAXES (DF.RLPTN). OTHER TAXES (DF.RLOT). CHARGES AND MISCELLANEOUS (DF.RLMC) INCLUDE REVENUES TO SERVICE BONDS. INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 9 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 10

94 TABLE 11. COMPONENTS OF REAL PERSONAL INCOME (MILLION 1995 DOLLARS) TABLE 12. PER CAPITA VARIABLES (1995 DOLLARS) 1996 DOT BASE CASE 1996 DOT BASE CASE WAGE AND DIV., TOTAL DISP. STATE AVERAGE SALARY NET RESIDENCE INTEREST, TRANSFERS PERSONAL PERSONAL TOTAL DISPOSABLE GENERAL PERMANENT CIVILIAN PERMANENT PAYMENTS EARNINGS ADJ. RENT INCOME INCOME INCOME INCOME FUND FUND ANNUAL FUND EXPEND. DIVIDEND WAGE BALANCE SOURCE: ISER MAP MODEL SIMULATION CE96B, CREATED OCT SOURCE: ISER MAP MODEL SIMULATION CE96B, CREATED OCT WAGE AND SALARY PAYMENTS (DF.PIWS) IN NONAGRICULTURAL WAGE AND SALARY JOB CATEGORIES PLUS MILITARY. NET EARNINGS (OF.PINE) IS NET LABOR AND PROPRIETORS' INCOME BY PLACE OF WORK. RESIDENCE ADJUSTMENT (DF.PIRAD). DIVIDENDS, INTEREST, AND RENT CDF.PIDIR). TRANSFERS (DF.PITRAN). TOTAL PERSONAL INCOME (DF.PIB). DISPOSABLE PERSONAL INCOME (DF.DPIB) TOTAL INCOME (DP.PIS). DISPOSABLE INCOME (DP.DPIB). STATE GENERAL FUND EXPENDITURES (DP.EXGFB). PERMANENT FUND DIVIDEND (OP.EXTRN). AVERAGE CIVILIAN ANNUAL WAGE (0F.WR97). PERMANENT FUND BALANCE (DP.BALPF). INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 11 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 12

95 TABLE 13. PRICE INDEXES 1996 DOT BASE CASE INFLATION ANCHORAGE AN CH/US RATE ANCH CPl-W PRICE LEVEL CPl-W (PERCENT> SOURCE' ISER MAP MODEL SIMULATION CE96B, CREATED OCT ANCHORAGE CPI (PDANCPI) CONSUMER PRICE INDEX FOR URBAN WAGE EARNERS ( = 100). ANCH/US PRICE LEVEL (PDRATIO) IS THE RATIO OF ANCHORAGE ANO US CONSUMER PRICE INDEX LEVELS. INFLATION RATE CG.ANCPI). INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 13

96 TABLE 15. POPULATION BY LABOR MARKET AREA (THOUSANDS) TABLE 16. TOTAL EMPLOYMENT BY LABOR MARKET AREA (THOUSANDS) ANCH/MATSU SOUTHEAST INTERIOR NORTH GULF COAST SOUTHWEST TOTAL ANCH/MATSU SOUTHEAST INTERIOR NORTH GULF COAST SOUTHWEST TOTAL SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED OCT SOURCE: ISER MAP MODEL SIMULATIOll CE96BR, CREATED OCT ANCH/MATSU (PL.ANCMS). SOUTHEAST (PL.SEAST). INTERIOR (PL.INTER). NORTH (PL.NORTH). GULF COAST (PL.GULF). SOUTHWEST (PL.SWEST). TOTAL (PCEN.ST). ANCH/MATSU (ML.ANCMS). SOUTHEAST (ML.SEAST). INTERIOR (ML.INTER). NORTH (ML.NORTH). GULF COAST (ML.GULF). SOUTHWEST (ML.SWEST). TOTAL (MCEN.ST). INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 15 INSTITUTE OF SOCIAL AND ECOllOMIC RESEARCH Page 16

97 TABLE 1. PART A WAGE AND SALARY EMPLOYMENT (THOUSANDS) 1996 DOT BASE CASE STATE SOUTHEAST TOTAL URBAN RURAL TOTAL URBAN RURAL SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. WAGE AND SALARY EMPLOYMENT IS ALASKA DEPARTMENT OF LABOR DEFINITION. STATE TOTAL (M97CE.ST) STATE URBAN (M97CE.SU) STATE RURAL (M97CE.SR) ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHEAST TOTAL CM97CE.ET) SOUTHEAST URBAN (M97CE.EU) SOUTHEAST RURAL (M97CE.ER) TABLE 1. PART B WAGE AND SALARY EMPLOYMENT (THOUSANDS) 1996 DOT BASE CASE SOUTHCENTRAL INTERIOR WESTERN ARCTIC TOTAL URBAN RURAL TOTAL URBAN RURAL SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. WAGE AND SALARY EMPLOYMENT IS ALASKA DEPARTMENT OF LABOR DEFINITION. ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHCENTRAL-INTERIOR TOTAL (M97CE.CT) SOUTHCENTRAL-INTERIOR URBAN (M97CE.CU) SOUTHCENTRAL INTERIOR RURAL (M97CE.CR) WESTERN-ARCTIC TOTAL (M97CE.WE) WESTERN-ARCTIC URBAN (M97CE.WU) WESTERN-ARCTIC RURAL CM97CE.WR) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL ANO ECONOMIC RESEARCH Page 2

98 TABLE 1. PART C TABLE 2. PART A YAGE AND SALARY EMPLOYMENT (THOUSANDS) POPULATION (THOUSANDS) 1996 DOT BASE CASE 1996 DOT BASE CASE URBAN CENSUS AREAS STATE SOUTHEAST ANCHORAGE FAIRBANKS JUNEAU KETCHIKAN SITKA KODIAK TOTAL URBAN RURAL TOTAL URBAN RURAL D D D SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. YAGE AND SALARY EMPLOYMENT IS ALASKA DEPARTMENT OF LABOR DEFINITION. ANCHORAGE CM97CE.13) FAIRBANKS CM97CE.05) JUNEAU CM97CE.19) KETCHKIAN CM97CE.23l SITKA CM97CE.20) KODIAK CM97CE. 15) STATE TOTAL CPCEN.ST) STATE URBAN (PCEN.SU) STATE RURAL CPCEN.SR) ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHEAST TOTAL CPCEN.ET) SOUTHEAST URBAN CPCEN.EU) SOUTHEAST RURAL CPCEN.ER) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 3 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 4

99 TABLE 2. PART B TABLE 2. PART C PCPULATION (THOUSANDS) POPULATION (THOUSANDS) 1996 DOT BASE CASE 1996 DOT BASE CASE URBAN CENSUS AREAS SOUTHCENTRAL-INTERJOR WESTERN-ARCTIC ANCHORAGE FAIRBANKS JUNEAU KETCHIKAN SITKA KODIAK TOTAL URBAN RURAL TOTAL URBAN RURAL D SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. ANCHORAGE (PCEN.13) ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: FAIRBANKS (PCEN.05) SOUTHCENTRAL JNTERIOR TOTAL (PCEN.CT) JUNEAU CPCEN. 19) SOUTHCENTRAL-INTERJOR URBAN (PCEN.CU) KETCHKIAN (PCEN.23) SOUTHCENTRAL INTERIOR RURAL (PCEN.CR) SITKA (PCEN.20) WESTERN-ARCTIC TOTAL (PCEN.WE) KODIAK (PCEN.15) WESTERN-ARCTIC URBAN (PCEN.WU) WESTERN-ARCTIC RURAL (PCEN.WR) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 5 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 6

100 TABLE 3. PART A TABLE 3. PART B NUMBER OF HOUSEHOLDS (THOUSANDS) NUMBER OF HOUSEHOLDS (THOUSANDS) 1996 DOT BASE CASE 1996 DOT BASE CASE STATE SOUTHEAST SOUTHCENTRAL-INTERIOR WESTERN-ARCTIC TOTAL URBAN RURAL TOTAL URBAN RURAL TOTAL URBAN RURAL TOTAL URBAN RURAL _ _8 125_ _ _ _ _ SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. STATE TOTAL (HHCEN.ST) STATE URBAN (HHCEN.SU) STATE RURAL (HHCEN.SR) ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHEAST TOTAL (HHCEN.ET) SOUTHEAST URBAN (HHCEN.EU) SOUTHEAST RURAL (HHCEN.ER) SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHCENTRAL-INTERIOR TOTAL (HHCEN.CT) SOUTHCENTRAL-INTERIOR URBAN (HHCEN.CU) SOUTHCENTRAL-INTERIOR RURAL (HHCEN.CR) WESTERN-ARCTIC TOTAL (HHCEN.WE) WESTERN-ARCTIC URBAN (HHCEN.WU) WESTERN-ARCTIC RURAL (HHCEN-WR) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 7 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 8

101 TABLE 3. PART C TABLE 4. PART A NUMBER OF HOUSEHOLDS (THOUSANDS) REAL PERSONAL INCOME (MILLIONS OF 1995 $) 1996 DOT BASE CASE 1996 DOT BASE CASE URBAN CENSUS AREAS STATE SOUTHEAST ANCHORAGE FAIRBANKS JUNEAU KETCHIKAN SITKA KODIAK TOTAL URBAN RURAL TOTAL URBAN RURAL m SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. ANCHORAGE (HHCEN.13) FAIRBANKS (HHCEN.05) JUNEAU (HHCEN.19) KETCHKIAN (HHCEN.23) SITKA (HHCEN.20) KODIAK (HHCEN.15) STATE TOTAL (OF.Pl.ST) STATE URBAN (OF.PI.SU) STATE RURAL (OF.Pl.SR) ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHEAST TOTAL (OF.PI.ET) SOUTHEAST URBAN (OF.Pl.EU) SOUTHEAST RURAL (OF.PI.ER) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 9 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 10

102 TABLE 4. PART B TABLE 4. PART C REAL PERSONAL INCOME (MILLIONS OF 1995 $) REAL PERSONAL INCOME (MILLIONS OF 1995 $) 1996 DOT BASE CASE 1996 DOT BASE CASE URBAN CENSUS AREAS SOUTHCENTRAL-INTERIOR WESTERN-ARCTIC ANCHORAGE FAIRBANKS JUNEAU KETCHIKAN SITKA KODIAK TOTAL URBAN RURAL TOTAL URBAN RURAL n n SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. SOURCE: ISER MAP MODEL SIMULATION CE96BR, CREATED 1996 OCT. ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHCENTRAL-INTERIOR TOTAL (OF.Pl.CT) SOUTHCENTRAL-INTERIOR URBAN (OF.PI.CU) SOUTHCENTRAL-INTERIOR RURAL (OF.Pl.CR) WESTERN-ARCTIC TOTAL (OF.PI.WE) WESTERN-ARCTIC URBAN (OF.Pl.WU) WESTERN-ARCTIC RURAL (OF.PI.WR) ANCHORAGE (DF.PI.13) FAIRBANKS (OF.PI.OS) JUNEAU (DF.PI.19) KETCHKIAN COF.PJ.23) SITKA (DF.PI.20) KODIAK (DF.PI.15) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 11 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 12

103 MAP STATE MODEL SCENARIO ASSUMPTIONS: PART 1 MAP STATE MODEL SCENARIO ASSUMPTIONS: PART DOT BASE CASE 1996 DOT BASE CASE BASIC EMPLOYMENT (THOUSANDS) BASIC EMPLOYMENT (THOUSANDS) HIGH WAGE LOW WAGE HIGH WAGE LOW WAGE AGRI- EXOGENOUS EXOGENOUS EXOGENOUS EXOGENOUS EXOGENOUS FISH ACTIVE CIVILIAN CULTURAL PETROLEUM CON- CON- TRANS- MINING MANU- MANU- HARVESTING OUTY FEDERAL EMPLOYMENT EMPLOYMENT STRUCT!ON STRUCTION PORTATION EMPLOYMENT FACTURING FACTURING EMPLOYMENT MILITARY EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT D o.ooo o.ooo SOURCE: MAP MODEL INPUT SCENARIO CE96SB--CREATED OCT 1996 SOURCE: MAP MODEL INPUT SCENARIO CE96SB--CREATED OCT 1996 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 2

104 MAP STATE MODEL SCENARIO ASSUMPTIONS: PART 3 MAP STATE MODEL SCENARIO ASSUMPTIONS: PART DOT BASE CASE 1996 DOT BASE CASE PETROLEUM REVENUES (MILLION DOLLARS) MISCELLANEOUS VARIABLES STATE TOURISTS STATE STATE STATE STATE CORPORATE VISITING NATIONAL PRODUCTION ROYALTY BONUS PROPERTY PETROLEUM SETTLEMENT ALASKA INFLATION TAX INCOME PAYMENT TAX TAX REVENUE (THOUSAND) RATE REVENUE REVENUE REVENUE REVENUE o.ooo SOURCE: MAP MODEL INPUT SCENARIO CE96SB--CREATED OCT 1996 SOURCE: MAP MODEL INPUT SCENARIO CE96SB--CREATED OCT 1996 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 3 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 4

105 PETROLEUM EMPLOYMENT (THOUSANDS), PART A. FISH PROCESSING EMPLOYMENT (THOUSANDS), PART DOT BASE A. BY CENSUS AREA DOT BASE BY CENSUS AREA SOUTH WESTERN TOTAL SOUTHEAST CENTRAL ARCTIC DOT SOUTH WESTERN STATE DOT REGION DOT REGION REGION TOTAL SOUTHEAST CENTRAL ARCTIC DOT STATE DOT REGION DOT REGION REGION o.a D D D DO SOURCE: MAP HODEL INPUT SCENARIO OT96SBRX--CREATEO FALL 96 SOURCE: MAP MODEL INPUT SCENARIO DT96SBRX--CREATED FALL 96 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page

106 TIMBER EMPLOYMENT (THOUSANDS), PART A. MILITARY EMPLOYMENT (THOUSANDS), PART A. DOT BASE DOT BASE BY CENSUS AREA BY CENSUS AREA SOUTH WESTERN SOUTH WESTERN TOTAL SOUTHEAST CENTRAL ARCTIC DOT TOTAL SOUTHEAST CENTRAL ARCTIC DOT STATE DDT REGION DOT REGION REGION STATE DOT REGION DOT REGION REGION DO D.O SOURCE: MAP MOOEL INPUT SCENARIO OT96SBRX CREATED FALL 96 SOURCE: MAP MOOEL INPUT SCENARIO DT96SBRX CREATEO FALL 96 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL ANO ECONOMIC RESEARCH Page

107 FEDERAL CIVILIAN EMPLOYMENT (THOLSANOS), PART MINING EMPLOYMENT (THOLSANOS), PART A. A. OOT BASE DOT BASE BY CENSUS AREA BY CENSUS AREA SOLTH IJESTERN SOLTH WESTERN TOTAL SOLTHEAST CENTRAL ARCTIC DOT TOTAL SOLTHEAST CENTRAL ARCTIC DOT STATE DOT REGION DOT REGION REGION STATE DOT REGION DOT REGION REGION SOURCE: MAP MODEL INPUT SCENARIO DT96SBRX--CREATED FALL 96 SOURCE' MAP HODEL INPUT SCENARIO DT96SBRX CREATED FALL 96 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL ANO ECONOMIC RESEARCH Page

108 TABLE 1. PROJECTION SUMMARY TABLE 2. EMPLOYMENT BY SECTOR (THOUSANDS) 1996 DOT HIGH CASE 1996 DOT HIGH CASE WAGE AND PERSONAL PETROLEUM INFRA- STATE/LOCAL POPULATION HOUSEHOLDS TOTAL SALARY INCOME REVENUES TOTAL TOTAL BASIC STRUCTURE SUPPORT GOVERNMENT (000) (000) EMPLOYMENT EMPLOYMENT (MILLION (MILLION EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT (000) (000) 1995 $) 1995 $) SOURCE: ISER MAP MODEL SIMULATION CE96H, CREATED OCT SOURCE: ISER MAP MODEL SIMULATION CE96H, CREATED OCT TOTAL EMPLOYMENT (EM99). POPULATION (POP) IS JULY 1, CENSUS DEFINITION. BASIC EMPLOYMENT (EM9BASE) INCLUDES EXOGENOUS COMPONENTS OF HOUSEHOLDS (HH) IS JULY 1 (EXCEPT IN 1980), CENSUS DEFINITION. CONSTRUCTION, MANUFACTURING, TRANSPORTATION, MINING, PETROLEUM, TOTAL EMPLOYMENT (EM99l INCLUDES ACTIVE DUTY MILITARY AND PROPRIETORS-- TOURISM, FEDERAL GOVERNMENT, AGRICULTURE, FORESTRY, AND FISH HARVESTING. PRE-1985 PROPRIETOR DEFINITION. INFRASTRUCTURE EMPLOYMENT (EM9INFR) INCLUDES TRANSPORTATION, COMMUNICATIONS, WAGE AND SALARY EMPLOYMENT (EM97) IS ALASKA PUBLIC UTILITIES, ENDOGENOUS CONSTRUCTION, AND BUSINESS SERVICES DEPARTMENT OF LABOR DEFINITION. NET OF EXOGENOUS AND TOURISM-RELATED TRANSPORTATION. PERSONAL INCOME (OF.PIS) IS US BEA OEFINITION. SUPPORT EMPLOYMENT (EM9SUPRT) INCLUDES TRADE, FINANCE, SERVICES, PETROLEUM REVENUES (DF.RP9Sl INCLUDES PERMANENT FUND CONTRIBUTION LOCAL MANUFACTURING, ANO PROPRIETORS NOT ENGAGED IN FISH HARVESTING, AND WINDFALLS. NET OF TRADE ANO SERVICE TOURISM EMPLOYMENT AND BUSINESS SERVICES. GOVERNMENT EMPLOYMENT (EMGA) INCLUDES STATE ANO LOCAL GOVERNMENT. INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 2

109 TABLE 3. PRIVATE EMPLOYMENT (THOUSANDS) TABLE 4. GOVERNMENT EMPLOYMENT (THOUSANDS) 1996 DOT HIGH CASE 1996 DOT HIGH CASE MINING TRANS., FEDERAL TOTAL AGRIC., AND CONSTRUC- HANUFAC- COMM., TOTAL MILITARY CIVILIAN STATE LOCAL PRIVATE FORESTRY, PETRO- TION TURING PUB. OTHER FISHERIES LEUM UTIL D D n n n D m SOURCE: ISER MAP MODEL SIMULATION CE96H, CREATED OCT SOURCE: ISER MAP MODEL SIMULATION CE96H, CREATED OCT PRIVATE CEMPVT) IS ALL NON-GOVERNMENT SPLIT BY ADOL CATEGORIES. AGRICULTURE, FORESTRY, FISHERIES (EMAFF) (INCLUDES PROPRIETORS IN FISHING). MINING AND PETROLEUM CEMP9). CONSTRUCTION (EMCN). MANUFACTURING CEMM9). TRANSPORTATION, COMMUNICATIONS, PUBLIC UTILITIES CEMTCU). OTHER CEMSUP) INCLUDES TRADE, FINANCE, SERVICE, AND PROPRIETORS NOT INVOLVED IN FISH HARVESTING. TOTAL (EMG9). MILITARY CEMGM) IS ACTIVE DUTY. FEDERAL CIVILIAN CEMGC). STATE CEMGS) INCLUDES UNIVERSITY OF ALASKA. LOCAL (EMGL). INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 3 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 4

110 TABLE 5. POPULATON CHANGE (THOUSANDS) TABLE 6. POPULATION COMPONENTS (THOUSANDS) 1996 DOT HIGH CASE 1996 DOT HIGH CASE COMPONENTS OF CHANGE CIVILIAN TOTAL NON-NATIVE NATIVE MILITARY TOTAL TOTAL NON POPULATION ANNUAL NATURAL MILITARY MILITARY CHANGE INCREASE MIGRATION MIGRATION SOURCE: ISER MAP MODEL SIMULATION CE96H, CREATED OCT SOURCE: ISER MAP MODEL SIMULATION CE96H, CREATED OCT NOTE: POPULATION IS EQUAL TO POPULATION IN PRIOR YEAR PLUS MIGRATION AND NATURAL INCREASE. THE SUM OF COMPONENTS DOES NOT EQUAL THE TOTAL DUE TO ROUNDING IN THE ALLOCATION OF MIGRANTS TO INDIVIDUAL COHORTS. POPULATION (POP) IS JULY 1, CENSUS DEFINITION. ANNUAL CHANGE IN POPULATION (DELPOP) IS YEAR TO YEAR JULY 1 CHANGE. NATURAL INCREASE (PDPN19) INCLUDES CIVILIAN AND MILITARY. NON-MILITARY MIGRATION (POPMIG). MILITARY MIGRATION CPDPMIGM) INCLUDES ACTIVE DUTY MILITARY PLUS DEPENDENTS. POPULATION (POP) IS JULY 1, CENSUS DEFINITION. CIVILIAN NON NATIVE (CNNTOT). NATIVE (NATTOT) CIVILIAN IS JULY 1 ESTIMATE EXCEPT 1980 IS APRIL 1. MILITARY (MILTOT) IS ACTIVE DUTY PLUS DEPENDENTS. INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 5 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 6

111 TABLE 7. STATE UNRESTRICTED GENERAL FUND (MILLION 1995 DOLLARS) TABLE 8. STATE GOVERNMENT MISCELLANEOUS VARIABLES (MILLION 1995 DOLLARS) 1996 DOT LOW CASE 1996 DOT LOW CASE REVENUES GENERAL FUND APPROPRIATIONS ITEM: ITEM: PERMANENT CONST EXPEND!- INVESTMENT EARNINGS PERSONAL DEBT FUND BUDGET TURES TOTAL PETROLEUM ENDOG INCOME TOTAL OPERATING CAPITAL SERVICE DIVIDEND RESERVE ENOUS GEN. FUND PER. FUND TAX _9 0.7 o_o _ o_o o.o SOURCE:!SER MAP MODEL SIMULATION CE96L, CREATED OCT SOURCE:!SER MAP MODEL SIMULATION CE96L, CREATED OCT TOTAL (OF.APGF) INCLUDES SPECIAL APPROPRIATIONS NOT SEPARATELY REPORTED. EXPENDITURES (DF.EXGFB)!S UNRESTRICTED GENERAL FUND EXPENDITURES. TOTAL UNRESTRICTED GENERAL FUND REVENUES (Df.RSGFB). PETROLEUM REVENUES (Df.RP9SG) EXCLUDES PERMANENT FUND AND CONSTITUTIONAL BUDGET RESERVE PORTIONS. ENDOGENOUS REVENUES (Df.RSENG) IS TOTAL NET Of PETROLEUM AND INVESTMENT EARNINGS. INVESTMENT EARNINGS, GENERAL FUND (Df.RS!G) IS EARNINGS FROM ALL SOURCES DEPOSITED IN THE GENERAL FUND EXCEPT PERMANENT FUND EARNINGS. INVESTMENT EARNINGS, PERMANENT FUND (Df.RS!PG). PERSONAL INCOME TAX (Df.RT!S). OPERATING (DF.APGFO). CAPITAL (Of.APGFC). DEBT SERVICE (Df.EXDSS) INCLUDES ONLY GENERAL OBLIGATION DEBT Of STATE. PERMANENT FUND DIVIDEND (Of.EXTRN). CONSTITUTIONAL BUDGET RESERVE BALANCE - YEAR END (Df.BALDF). INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 7 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 8

112 TABLE 9. PERMANENT FUND (MILLION 1995 DOLLARS) TABLE 10. LOCAL GOVERNMENT REVENUES (MILLION 1995 DOLLARS) 1996 DOT LOii CASE 1996 DOT LOii CASE FUND ADDITIONS FROM INTERGOVERNMENTAL TAXES USE Of EARNINGS RESOURCE REVENUES TOTAL CHARGES FUND GENERAL STATE FEDERAL PETROLEUM OTHER AND MISC. EARNINGS SPECIAL BALANCE REVENUE TRANSFERS TRANSFERS PROPERTY PROPERTY OTHER DIVIDEND GENERAL REINVEST FORMULA- APPRO FUND BASED PRIATION o.o D D.D D.D DD8 23D D 2DD D.D D.D DD D DD8 111D D D.D D.D D1D DD D D.D D D D D D7.1 2D1D 1D58.5 2D8.1 85D.4 O.D D.D D2D DD.9 2D D D.D 92.2 D.D D D D3.8 2D D2.9 D.D 73.3 D.D 11D35.7 2D D D.D 59.D D.D SOURCE: ISER MAP MODEL SIMULATION CE96L, CREATED OCT SOURCE: ISER MAP MODEL SIMULATION CE96L, CREATED OCT EARNINGS (Df.RSIP). PERMANENT FUND DIVIDEND (Df.EXTRN). CONTRIBUTION TO GENERAL FUND (Df.RSIPG). REINVESTED EARNINGS (Df.RSIPP) INCLUDES ALL RESIDUAL EARNINGS AFTER DIVIDEND AND ALLOCATION TO GENERAL FUND. FORMULA BASED REVENUES (Df.RP7SP). SPECIAL APPROPRIATION REVENUES (Df.XPFCX). FUND BALANCE AT YEAR END (Df.BALPF) INCLUDES EARNINGS RESERVE. TOTAL GENERAL REVENUE (Df.RL99). STATE TRANSFERS (Df.RLT99). FEDERAL TRANSFERS (Df.RLTF). PETROLEUM PROPERTY TAXES (Df.RLPTP). OTHER PROPERTY TAXES (Df.RLPTN). OTHER TAXES (Df.RLOT). CHARGES AND MISCELLANEOUS (Df.RLMC) INCLUDE REVENUES TO SERVICE BONDS. INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 9 INSTITUTE OF SOCIAL ANO ECONOMIC RESEARCH Page 10

113 TABLE 11. COMPONENTS OF REAL PERSONAL INCOME (M!LL!ON 1995 DOLLARS) TABLE 12. PER CAPITA VARIABLES (1995 DOLLARS) 1996 DOT LOii CASE 1996 DOT LOii CASE WAGE AND DIV., TOTAL D!SP. STATE AVERAGE SALARY NET RESIDENCE INTEREST, TRANSFERS PERSONAL PERSONAL TOTAL DISPOSABLE GENERAL PERMANENT C!V!L!AN PERMANENT PAYMENTS EARNINGS ADJ. RENT INCOME INCOME INCOME INCOME FUND FUND ANNUAL FUND EXPEND. DIVIDEND WAGE BALANCE SOURCE:!SER MAP MOOEL SIMULATION CE96L, CREATED OCT SOURCE:!SER MAP MODEL SIMULATION CE96L, CREATED OCT WAGE AND SALARY PAYMENTS (DF.P!WS)!N NONAGRICULTURAL WAGE AND SALARY JOB CATEGORIES PLUS MILITARY. TOTAL INCOME (DP.PIB). NET EARNINGS (OF.PINE) rs NET LABOR AND PROPRIETORS' INCOME DISPOSABLE INCOME (DP.DP!B). BY PLACE OF WORK. STATE GENERAL FUND EXPENDITURES (DP.EXGFB). RESIDENCE ADJUSTMENT (DF.P!RAD). PERMANENT FUND DIVIDEND (DP.EXTRN). DIVIDENDS, INTEREST, AND RENT (DF.P!D!R). AVERAGE C!V!L!AN ANNUAL WAGE (DF.WR97). TRANSFERS (DF.P!TRAN). PERMANENT FUND BALANCE (DP.BALPF). TOTAL PERSONAL INCOME (DF.P!B). DISPOSABLE PERSONAL INCOME (DF.DP!B) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 11 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 12

114 TABLE 13. PRICE INDEXES 1996 DOT LOii CASE INFLATION ANCHORAGE AN CH/US RATE ANCH CPl-W PRICE LEVEL CPl-W (PERCENT) SOURCE: ISER MAP MODEL SIMULATION CE96L, CREATED OCT ANCHORAGE CPI (POANCPI) CONSUMER PRICE INDEX FOR URBAN WAGE EARNERS ( = 100). ANCH/US PRICE LEVEL (PDRATIO) JS THE RATIO OF ANCHORAGE AND US CONSUMER PRICE INDEX LEVELS. INFLATION RATE (G.ANCPI). INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 13

115 TABLE 15. POPULATION BY LABOR MARKET AREA (THOUSANDS) TABLE 16. TOTAL EMPLOYMENT BY LABOR MARKET AREA (THOUSANDS) ANCH/MATSU SOUTHEAST INTERIOR NORTH GULF COAST SOUTHWEST TOTAL ANCH/MATSU SOUTHEAST INTERIOR NORTH GULF COAST SOUTHWEST TOTAL ; SOURCE: ISER MAP MOOEL SIMULATION CE96LR, CREATED OCT SOURCE: ISER MAP MOOEL SIMULATION CE96LR, CREATED OCT ANCH/MATSU (PL.ANCMS). SOUTHEAST (PL.SEASTJ. INTERIOR (PL.INTER). NORTH (PL.NORTH). GULF COAST (PL.GULF). SOUTHWEST CPL.SWEST). TOTAL (PCEN.ST). ANCH/MATSU (ML.ANCMS). SOUTHEAST (ML.SEAST). INTERIOR (ML.INTER). NORTH (ML.NORTH). GULF COAST (ML.GULF). SOUTHWEST (ML.SWEST). TOTAL (MCEN.ST). INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 15 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 16

116 TABLE 1. PART A WAGE AND SALARY EMPLOYMENT (THOUSANDS) 1996 DOT LOii CASE STATE SOUTHEAST TOTAL URBAN RURAL TOTAL URBAN RURAL B B B B b SOURCE: ISER MAP MOOEL SIMULATION CE96LR, CREATED 1996 OCT. WAGE AND SALARY EMPLOYMENT IS ALASKA DEPARTMENT OF LABOR DEFINITION. STATE TOTAL CM97CE.ST) STATE URBAN (M97CE.SU) STATE RURAL (M97CE.SR) ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHEAST TOTAL (M97CE.ET) SOUTHEAST URBAN (M97CE.EU) SOUTHEAST RURAL (M97CE.ER) TABLE 1. PART B WAGE AND SALARY EMPLOYMENT (THOUSANDS) 1996 DOT LOii CASE SOUTHCENTRAL-INTERIOR WESTERN-ARCTIC TOTAL URBAN RURAL TOTAL URBAN RURAL SOURCE: ISER MAP MOOEL SIMULATION CE96LR, CREATED 1996 OCT. WAGE AND SALARY EMPLOYMENT IS ALASKA DEPARTMENT OF LABOR DEFINITION. ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHCENTRAL INTERIOR TOTAL (M97CE.CTJ SOUTHCENTRAL INTERIOR URBAN (M97CE.CU) SOUTHCENTRAL-INTERIOR RURAL (M97CE.CR) WESTERN-ARCTIC TOTAL (M97CE.WEl WESTERN-ARCTIC URBAN (M97CE.llU) WESTERN-ARCTIC RURAL CM97CE.WR) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 2

117 TABLE 1. PART C TABLE 2. PART A ~AGE AND SALARY EMPLOYMENT (THOUSANDS) POPULATION (THOUSANDS) 1996 DOT L~ CA!\E 1996 DOT L~ CASE URBAN CENSUS AREAS STATE SOUTHEAST ANCHORAGE FAIRBANKS JUNEAU KETCHIKAN SITKA KODIAK TOTAL URBAN RURAL TOTAL URBAN RURAL SOURCE: ISER MAP MODEL SIMULATION CE96LR, CREATED 1996 OCT. SOURCE: ISER MAP MODEL SIMULATION CE96LR, CREATED 1996 OCT. ~AGE AND SALARY EMPLOYMENT IS ALASKA t DEPARTMENT OF LABOR DEFINITION. STATE TOTAL CPCEN.ST) ANCHORAGE (M97CE. 13) STATE URBAN CPCEN.SU) FAIRBANKS (M97CE.05) STATE RURAL (PCEN.SR) JUNEAU CM97CE.19) ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: KETCHK!AN (M97CE.23) SOUTHEAST TOTAL (PCEN.ET) SITKA (M97CE.20) SOUTHEAST URBAN (PCEN.EU) KODIAK (M97CE.15) SOUTHEAST RURAL CPCEN.ER) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 3 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 4

118 TABLE 2. PART B TABLE 2. PART C POPULATION (THOUSANDS) POPULATION (THOUSANDS) 1996 DOT LOW CASE 1996 DOT LOW CASE URBAN CENSUS AREAS SOUTHCENTRAL-INTERIOR WESTERN-ARCTIC ANCHORAGE FAIRBANKS JUNEAU KETCHIKAN SITKA KODIAK TOTAL URBAN RURAL TOTAL URBAN RURAL SOURCE: ISER MAP MODEL SIMULATION CE96LR, CREATED 1996 OCT. SOURCE: ISER MAP MODEL SIMULATION CE96LR, CREATED 1996 OCT. ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHCENTRAL INTERIOR TOTAL (PCEN.CT) SOUTHCENTRAL INTERIOR URBAN CPCEN.CU) SOUTHCENTRAL INTERIOR RURAL (PCEN.CR) WESTERN-ARCTIC TOTAL (PCEN.WEl WESTERN-ARCTIC URBAN (PCEN.WU) WESTERN-ARCTIC RURAL (PCEN.WR) ANCHORAGE (PCEN.13) FAIRBANKS (PCEN.05) JUNEAU (PCEN.19) KETCHKIAN (PCEN.23) SITKA (PCEN.20) KODIAK (PCEN.15) INSTITUTE OF SOCIAL ANO ECONOMIC RESEARCH Page 5 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 6

119 TABLE 3. PART A TABLE 3. PART B NUMBER OF HOUSEHOLOS CTHOUSANOS) NUMBER OF HOUSEHOLOS (THOUSANDS) 1996 DOT LOii CASE 1996 DOT LOii CASE STATE SCXJTHEAST SOUTHCENTRAL-INTERIOR WESTERN-ARCTIC TOTAL URBAN RURAL TOTAL URBAN RURAL TOTAL URBAN RURAL TOTAL URBAN RURAL SOURCE: ISER MAP MODEL SIMULATION CE96LR, CREATED 1996 OCT. STATE TOTAL (HHCEN.ST) STATE URBAN CHHCEN.SU) STATE RURAL (HHCEN.SR) ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHEAST TOTAL CHHCEN.ET) SOUTHEAST URBAN (HHCEN.EU) SOUTHEAST RURAL (HHCEN.ER) SOURCE: ISER MAP MODEL SIMULATION CE96LR, CREATED 1996 OCT. ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHCENTRAL-INTERIOR TOTAL (HHCEN.CT) SOUTHCENTRAL-INTERIOR URBAN (HHCEN.CU) SOUTHCENTRAL INTERIOR RURAL (HHCEN.CR) WESTERN-ARCTIC TOTAL (HHCEN.WE) WESTERN-ARCTIC URBAN (HHCEN.WU) WESTERN-ARCTIC RURAL (HHCEN.WR) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 7 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 8

120 TABLE 3. PART C TABLE 4. PART A NUMBER OF HOUSEHOLDS (THOUSANDS) REAL PERSONAL INCOME (MILLIONS OF 1995 $) 1996 DOT LOW CASE 1996 DOT LOW CASE URBAN CENSUS AREAS STATE SOUTHEAST ANCHORAGE FAIRBANKS JUNEAU KETCHIKAN SITKA KODIAK TOTAL URBAN RURAL TOTAL URBAN RURAL SOURCE: ISER MAP MODEL SIMULATION CE96LR, CREATED 1996 OCT. SOURCE: ISER MAP MODEL SIMULATION CE96LR, CREATED 1996 OCT. ANCHORAGE (HHCEN.13) FAIRBANKS (HHCEN.05) JUNEAU (HHCEN.19) KETCHKIAN (HHCEN.23) SITKA (HHCEN.20) KODIAK (HHCEN.15) STATE TOTAL (OF.PI.ST) STATE URBAN (OF.PI.SU) STATE RURAL (OF.PI.SR) ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHEAST TOTAL (OF.PI.ET) SOUTHEAST URBAN (OF.PI.EU) SOUTHEAST RURAL (OF.PI.ER) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 9 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 10

121 TABLE 4. PART B TABLE 4. PART C REAL PERSONAL INCOME (MILLIONS OF 1995 $) REAL PERSONAL INCOME (MILLIONS OF 1995 $) 1996 DOT LOW CASE 1996 DOT LOW CASE URBAN CENSUS AREAS SOUTHCENTRAL-INTERIOR WESTERN-ARCTIC ANCHORAGE FAIRBANKS JUNEAU KETCHIKAN SITKA KODIAK TOTAL URBAN RURAL TOTAL URBAN RURAL m SOURCE: ISER MAP MODEL SIMULATION CE96LR, CREATED 1996 OCT. SOURCE: ISER MAP MODEL SIMULATION CE96LR, CREATED 1996 OCT. ALASKA DEPARTMENT OF TRANSPORTATION REGIONS: SOUTHCENTRAL-INTERIOR TOTAL (OF.PI.CT) SOUTHCENTRAL-INTERIOR URBAN (OF.PI.CU) SOUTHCENTRAL-INTERIOR RURAL (OF.Pl.CR) WESTERN-ARCTIC TOTAL (OF.PI.WE) WESTERN-ARCTIC URBAN (OF.PI.WU) WESTERN-ARCTIC RURAL (OF.PI.WR) ANCHORAGE (DF.PI.13) FAIRBANKS (OF.PI.OS) JUNEAU (DF.PI.19) KETCHKIAN (OF.PI.23) SITKA (DF.PI.20) KODIAK (DF.PI.15) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 11 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 12

122 MAP STATE MODEL SCENARIO ASSUMPTIONS: PART 1 MAP STATE MODEL SCENARIO ASSUMPTIONS: PART DOT LOW CASE 1996 DOT LOW CASE BASIC EMPLOYMENT (THOUSANDS) BASIC EMPLOYMENT (THOUSANDS) HIGH WAGE LOW WAGE HIGH WAGE LOW WAGE AGRI- EXOGENOUS EXOGENOUS EXOGENOUS EXOGENOUS EXOGENOUS FISH ACTIVE CIVILIAN CULTURAL PETROLEUM CON- CON- TRANS- MINING MANU- MANU- HARVESTING DUTY FEDERAL EMPLOYMENT EMPLOYMENT STRUCTION STRUCTION PORTATION EMPLOYMENT FACTURING FACTURING EMPLOYMENT MILITARY EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT EMPLOYMENT o.ooo o.ooo o.ooo o.ooo _ SOURCE: MAP MODEL INPUT SCENARIO CE96SL--CREATED OCT 1996 SOURCE: MAP MODEL INPUT SCENARIO CE96SL -CREATED OCT 1996 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 2

123 MAP STATE MODEL SCENARIO ASSUMPTIONS: PART 3 MAP STATE MODEL SCENARIO ASSUMPTIONS: PART DOT LOii CASE 1996 OCT LOii CASE PETROLEUM REVENUES (MILLION DOLLARS) MISCELLANEOUS VARIABLES STATE TOURISTS STATE STATE STATE STATE CORPORATE VISITING NATIONAL PRODUCTION ROYALTY BONUS PROPERTY PETROLEUM SETTLEMENT ALASKA INFLATION TAX INCOME PAYMENT TAX TAX REVENUE (THOUSAND) RATE REVENUE REVENUE REVENUE REVENUE SOURCE: MAP MODEL INPUT SCENARIO CE96SL--CREATEO OCT 1996 SOURCE: MAP MODEL INPUT SCENARIO CE96SL--CREATEO OCT 1996 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 3 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 4

124 PETROLEUM EMPLOYMENT (THOUSANDS), PART A. FISH PROCESSING EMPLOYMENT (THOUSANDS), PART DOT LOii A. BY CENSUS AREA DOT LOii BY CENSUS AREA SOUTH WESTERN TOTAL SOUTHEAST CENTRAL ARCTIC DOT SOUTH WESTERN STATE DOT REGION DOT REGION REGION TOTAL SOUTHEAST CENTRAL ARCTIC DOT STATE DOT REGION DOT REGION REGION D SOURCE: MAP MODEL INPUT SCENARIO DT96SBRX CREATED FALL 96 SOURCE: MAP MODEL INPUT SCENARIO DT96SBRX -CREATED FALL 96 INSTITUTE OF SOCIAL ANO ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page

125 TIMBER EMPLOYMENT (THOUSANDS), PART A. MILITARY EMPLOYMENT (THOUSANDS), PART A. DOT LOW DOT LOW BY CENSUS AREA BY CENSUS AREA SOUTH WESTERN SOUTH WESTERN TOTAL SOUTHEAST CENTRAL ARCTIC DOT TOTAL SOUTHEAST CENTRAL ARCTIC DOT STATE DOT REGION DOT REGION REGION STATE DOT REGION DOT REGION REGION D DD D D D D D D SOURCEo MAP HOOEL INPUT SCENARIO DT96SBRX CREATED FALL 96 SOURCEo HAP HOOEL INPUT SCENARIO DT96SBRX CREATED FALL 96 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONONIC RESEARCH Page

126 FEDERAL CIVILIAN EMPLOYMENT (THCXJSANDS), PART MINING EMPLOYMENT (THCXJSANDS), PART A. A. DOT LOW DOT LOW BY CENSUS AREA BY CENSUS AREA SCXJTH WESTERN SCXJTH WESTERN TOTAL SCXJTHEAST CENTRAL ARCTIC DOT TOTAL SCXJTHEAST CENTRAL ARCTIC DOT STATE DOT REGION DOT REGION REGION STATE DOT REGION DOT REGION REGION SCXJRCE: MAP MODEL INPUT SCENARIO DT96SBRX CREATEO FALL 96 SCXJRCE: MAP MODEL INPUT SCENARIO DT96SBRX CREATED FALL 96 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page

127 TABLE 7. STATE UNRESTRICTED GENERAL FUND (MILLION 1995 DOLLARS) TABLE 8. STATE GOVERNMENT MISCELLANEOUS VARIABLES (MILLION 1995 DOLLARS) 1996 DOT HIGH CASE 1996 DOT HIGH CASE REVENUES GENERAL FUND APPROPRIATIONS ITEM: ITEM: PERMANENT CONST EXPEND!- INVESTMENT EARNINGS PERSONAL DEBT FUND BUDGET TURES TOTAL PETROLEUM ENDOG INCOME TOTAL OPERATING CAPITAL SERVICE DIVIDEND RESERVE ENOUS GEN. FUND PER. FUND TAX _ _ o.o o.o _ SOURCE: ISER MAP MODEL SIMULATION CE96H, CREATED OCT SOURCE: ISER MAP MODEL SIMULATION CE96H, CREATED OCT EXPENDITURES (DF.EXGFB) IS UNRESTRICTED GENERAL FUND EXPENDITURES. TOTAL UNRESTRICTED GENERAL FUND REVENUES CDF.RSGFB). PETROLEUM REVENUES (DF.RP9SG) EXCLUDES PERMANENT FUND AND CONSTITUTIONAL BUDGET RESERVE PORTIONS. ENDOGENOUS REVENUES CDF.RSENG) IS TOTAL NET OF PETROLEUM ANO INVESTMENT EARNINGS. INVESTMENT EARNINGS, GENERAL FUND CDF.RSIG) IS EARNINGS FROM ALL SOURCES DEPOSITED IN THE GENERAL FUND EXCEPT PERMANENT FUND EARNINGS. INVESTMENT EARNINGS, PERMANENT FUND CDF.RSIPG). PERSONAL INCOME TAX CDF.RTIS). TOTAL CDF.APGF) INCLUDES SPECIAL APPROPRIATIONS NOT SEPARATELY REPORTED. OPERATING CDF.APGFO). CAPITAL CDF.APGFC). DEBT SERVICE (DF.EXDSS) INCLUDES ONLY GENERAL OBLIGATION DEBT OF STATE. PERMANENT FUND DIVIDEND CDF.EXTRN). CONSTITUTIONAL BUDGET RESERVE BALANCE - YEAR END CDF.BALDF). INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 7 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 8

128 TABLE 9. PERMANENT FUND (MILLION 1995 DOLLARS) TABLE 10. LOCAL GOVERNMENT REVENUES (MILLION 1995 DOLLARS) 1996 DOT HIGH CASE 1996 DOT HIGH CASE FUND ADDITIONS FROM INTERGOVERNMENTAL TAXES USE OF EARNINGS RESOURCE REVENUES TOTAL CHARGES FUND GENERAL STATE FEDERAL PETROLEUM OTHER AND MISC. EARNINGS SPECIAL BALANCE REVENUE TRANSFERS TRANSFERS PROPERTY PROPERTY OTHER DIVIDEND GENERAL REINVEST FORMULA AP PRO FUND BASED PRIATION o.o o.o o.o o.o SOURCE: ISER MAP MOOEL SIMULATION CE96H, CREATED OCT SOURCE: ISER MAP MOOEL SIMULATION CE96H, CREATED OCT EARNINGS CDF.RSIP). PERMANENT FUND DIVIDEND (DF.EXTRN). CONTRIBUTION TO GENERAL FUND (DF.RSIPG). REINVESTED EARNINGS (DF.RSIPP) INCLUDES ALL RESIDUAL EARNINGS AFTER DIVIDEND ANO ALLOCATION TO GENERAL FUND. FORMULA-BASED REVENUES (DF.RP7SP). SPECIAL APPROPRIATION REVENUES (DF.XPFCX). FUND BALANCE AT YEAR END (DF.BALPF) INCLUDES EARNINGS RESERVE. TOTAL GENERAL REVENUE (DF.RL99). STATE TRANSFERS (DF.RLT99). FEDERAL TRANSFERS (OF.RLTF). PETROLEUM PROPERTY TAXES (DF.RLPTP). OTHER PROPERTY TAXES (OF.RLPTN). OTHER TAXES CDF.RLOT). CHARGES AND MISCELLANEOUS (DF.RLMC) INCLUDE REVENUES TO SERVICE BONDS. INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 9 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 10

129 TABLE 11. COMPONENTS OF REAL PERSONAL INCOME (MILLION 1995 DOLLARS) TABLE 12. PER CAPITA VARIABLES (1995 DOLLARS) 1996 DOT HIGH CASE 1996 DOT HIGH CASE WAGE AND DIV., TOTAL DJSP. STATE AVERAGE SALARY NET RESIDENCE INTEREST, TRANSFERS PERSONAL PERSONAL TOTAL DISPOSABLE GENERAL PERMANENT CIVILIAN PERMANENT PAYMENTS EARNINGS ADJ. RENT INCOME INCOME INCOME INCOME FUND FUND ANNUAL FUND EXPEND. DIVIDEND WAGE BALANCE SOURCE: ISER MAP MODEL SIMULATION CE96H, CREATED OCT SOURCE: ISER MAP MODEL SIMULATION CE96H, CREATED OCT WAGE AND SALARY PAYMENTS (OF.PIWS) IN NONAGRICULTURAL WAGE AND SALARY JOB CATEGORIES PLUS MILITARY. TOTAL INCOME (DP.PIB). NET EARNINGS (OF.PINE) IS NET LABOR AND PROPRIETORS' INCOME DISPOSABLE INCOME (DP.DPJ8). BY PLACE OF WORK. STATE GENERAL FUND EXPENDITURES (OP.EXGFB). RESIDENCE ADJUSTMENT (DF.PIRAD). PERMANENT FUND DIVIDEND (DP.EXTRN). DIVIDENDS, INTEREST, AND RENT (DF.PIDJR). AVERAGE CIVILIAN ANNUAL WAGE (0F.WR97). TRANSFERS (Df.PITRAN). PERMANENT FUND BALANCE (DP.BALPF). TOTAL PERSONAL INCOME (Df.PIB). DISPOSABLE PERSONAL INCOME (DF.DPJB) INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 11 INSTITUTE OF SOCIAL AND ECONOMIC RESEARCH Page 12