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Last-minute legislative scramble kills popular Alaska regional development program

Pat Forgey
Alaska Sen. Donny Olson, a champion of the ARDOR program, which regional development supporters say could have new life after Gov. Sean Parnell didn't veto program funding. Brian Wallace / First Alaskans Magazine

JUNEAU -- Alaska communities desperately in need of jobs have lost one of the few state economic development efforts directed their way with the shutdown this summer of the Alaska Regional Development Organization (ARDOR) program.

"It's a huge blow to our organization to be defunded," said Sue Cogswell, executive director of the Prince William Sound Economic Development District.

Her organization has been involved in developing a heavy vessel lift in Cordova to support the fishing industry, harbor and port improvements in Valdez, and a museum in Whittier that focuses on World War II and Cold War history that has benefited the tourism industry.

"We've had a lot of people coming off the cruise ships, and they say it's wonderful and they love it," Cogswell said of the Whittier museum.

But what happened during the legislative session was that the ARDOR program was caught in a bitter standoff between rival legislators on an unrelated issue. When neither side blinked, the economic development program came crashing down July 1.

Job and project cuts

The result has been job and project cuts at some regional economic development programs, such as the Juneau-based Southeast Conference, and the closure of others, such as Bethel-based Lower Kuskokwim Economic Development Council.

The program was set to cost the state less than $1 million in the current fiscal year for all the state's ARDORs. Last year 12 organizations received about $62,000 each. That money often was used as matching money, doubling or tripling its value, economic development officials say.

"We use it as a match, usually with federal funding, and annually it's almost half of our revenue," Cogswell said.

The money was most valuable in rural areas, where there were few other sources of revenue to tap.

"The irony of this is that places that are large and have large business communities have other sources of funds," said Carl Berger, executive director of the Lower Kuskokwim Economic Development Council.

His group has closed its office, disconnected its telephones and suspended its Internet service. Berger laid himself off.

He said he didn't want to compete with other needs among Bethel's small business community.

"It's hard to go out and say, 'We used to be an ARDOR and we're not anymore, would you like to give us some money,’" Berger said. "That was our seed money and it’s hard to go out and try to leverage other funds without it."

Alaska’s Regional Economic Development program has been around for 25 years, created by longtime state Sen. Arliss Sturgulewski of Anchorage. But the legislature chose not to reauthorize it last session.

Those describing the startling end of the regional economic development program frequently use the word "ironic" to describe how the popular program wound up slashed during a legislative standoff over an unrelated topic.

Freshman Rep. Shelly Hughes, R-Palmer, desperately tried to resurrect the bill continuing the regional economic development program for another five years in the final hectic hours of this year's legislative session.

"I was doing everything I could to revive that baby, let me tell you," Hughes said.

She sponsored the extension, House Bill 71, and shepherded it to unanimous approval in the House of Representatives.

'Universal support'

When it got to the Senate, Sen. Donny Olson, D-Nome, added a separate provision to the bill related to hair crab and weathervane scallops that the senator couldn't get out of the House Fisheries Committee chaired by Rep. Paul Seaton, R-Homer.

"A maneuver was made during the last weekend of the session by the senator from Nome to tack some fisheries legislation onto the reauthorization bill," Seaton said. "Because of that, the bill had to go to a conference committee on the last day of the session." That committee couldn't agree, and the session ended without reauthorization.

Seaton, who led the opposition, said it wasn't due to the regional economic development organization provision.

"I think there was basically universal support for the ARDOR bill," he said.

Berger agreed. "We were told by quite a number of people both before and after this happened that the intent was not to take away or cancel our program after 25 years," Berger said.

He questioned why Olson didn't back off his quest for his bill.

"Even though he saw he wasn't going to get what he wanted, he didn't take his provision out of our bill," Berger said.

Olson's chief of staff, Dave Scott, said the senator did not intend to end the valuable economic development program.  "It just kind of fell apart at the end," Scott said. "It's a shame, really."

Once the conference committee began meeting, it was too late for negotiations to work out the differences, he said. Hughes is now working on ways to resurrect the regional economic development organization. Advocates of the organization persuaded Gov. Sean Parnell to not veto the organization’s money out of the budget, even though it can't spent without a reauthorization bill.

"The money is still sitting on the budget line, and it's there until the end of the fiscal year," Hughes said.

Some legislators have had questions about the effectiveness of the program, and Hughes said her bill included new audit and shorter reauthorization periods to get those questions answered. That resulted in the strong support, she said.

Parnell didn't veto funding

Department of Commerce, Community and Economic Development Commissioner Sue Bell said the programs, while varying widely, are valuable to bring new jobs to the state.

"I think we have to be realistic that the organizations range widely in terms of size, sophistication and the ability to generate additional resources beyond the state grants," she said.

But the state's efforts need the help the local groups can provide.

"There's always value in having locally-driven decision making and input when you are talking economic development," Bell said.

Hughes said she's still working on a strategy for resurrecting the program, and is hoping to reach agreement on either House Bill 71 or a new bill during the interim.

The fact that Parnell didn't veto program funding, even though the bill continuing the program didn't pass, is significant, supporters say.

"I think it's probably very unusual for a program not to be extended but to leave the funding in," Bell said of Parnell's action. "I think that shows he and a number of legislators want to have an opportunity to discuss it as they return this session."

Seaton said he regretted that the bill funding the regional economic development organizations got caught up in the shellfish fight.

"Sometimes things get balled up, and that's what happened here," he said.

Contact Pat Forgey at pat(at)alaskadispatch.com