Win Gruening: Juneau Assembly should heed economic warning bells in latest report

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By WIN GRUENING

The economic indicators report published last month by the Juneau Economic Development Council is a wake-up call for our community. The findings are worrisome, and should be the #1 reference in guiding the Juneau Assembly’s priorities and actions for 2024.

JEDC, a private nonprofit, receives $440,000 annually from the city to promote economic development and monitor economic data. JEDC Executive Director Brian Holst shared their latest report during a recent Juneau Chamber of Commerce presentation and outlined some alarming trends impacting our community. The report reflects changes between 2021 and 2022, some of which may have become even more pronounced in 2023.

While Juneau’s economy has generally recovered from the debilitating effects of the pandemic (thanks largely to the rebounding cruise industry), the community’s aging and declining population signal problems ahead. For the first time in Juneau’s history, residents over 60 years of age outnumber those under 20. Families moving out of Juneau coupled with low fertility rates have been the main reasons, but high housing and healthcare costs have discouraged new in-migration.

Compounding this problem is the continued loss of government jobs, once Juneau’s mainstay. The state workforce declined 2.6% year over year. Significantly, half those jobs were in administration or executive-level positions.

Plummeting student populations will soon force the Juneau School District to consider facility consolidations as state education funding is tied to school enrollment.

Most agree that making Juneau a more affordable place to live will help and encourage working families to stay or relocate here. Yet many of our Assembly’s priorities have served to do just the opposite.

These economic and demographic trends can’t be reversed anytime soon. Jacking up property taxes to untenable levels or spending more than $100 million on a new City Hall and civic center won’t make Juneau more affordable. Nor will warning the one private industry that is expanding their presence in the community that their efforts are no longer welcome. Yet the Assembly recently voted informally “thumbs down” as a signal they want the cruise industry to shrink.

This begs the question, what exactly will be the plan to replace the revenue losses when visitors are reduced? It was only a few years ago that the Assembly discussed exempting food from sales taxes and, despite almost unanimous support, they were unable to deliver a plan to replace the $6 million hole it would have created in the budget.

The 2023 cruise season generated over $34 million in sales tax and passenger fee revenue. Reducing it by just one ship per day would create a similar-sized hole in the municipal budget. And that doesn’t take into account other economic impacts related to employment and cruise line purchases.

Except for mining there’s no other realistic option to sustain our economy save the cruise industry. We can hope for more independent visitors or Coast Guard cutters, but other options are speculative and long-term. None come close to replacing the kind of employment and revenue now provided by the cruise industry.

Instead of demonizing the cruise industry, why not collaborate productively with them to expand opportunities for employment and revenue growth?

One such example is Huna Totem Corp.’s Aak’w Landing dock project. So far the city seems more interested in allocating an estimated $80 million in tax revenue to purchase Juneau’s private docks than approving this project, one that could pump an estimated $150 million in private investment into our community.

Juneau’s Tourism Management Best Practices (TMBP) program has been widely lauded and copied in other Southeast Alaska communities. Despite assertions 20 years ago that further tourism growth in Juneau was unsustainable, impacts as evidenced by resident complaints have been largely alleviated. The recent increase due to the uptick in passenger volume was not unexpected and is being addressed.

More importantly, the recommendations of the Visitor Industry Task Force are just now being implemented to include a five-ship daily limit and other congestion mitigation measures. It’s premature to consider other changes until those actions can take effect.

In the meantime, our Assembly can and should concentrate its efforts on how to grow the economy, streamline the budget to reduce taxes, and reverse Juneau’s demographic decline.

After retiring as the senior vice president in charge of business banking for Key Bank in Alaska, Win Gruening became a regular opinion page columnist for the Juneau Empire. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is involved in various local and statewide organizations.

8 COMMENTS

  1. You’re dreaming if you think the socialists in government and in the public will adopt any of this.

    We are a dying community. You know it, I know it, and they know it. But they flatly don’t care. Nero is fiddling while we burn.

    The faux junta running us has slowly been buying up nearly every private entity they can. What they can’t buy they work to run off.

    We are an insular/quasi xenophobic/intellectually incestous community. One with a death wish.

    All over SE from Hoonah to Yakatat communities are looking to expand their cruise industry attractiveness. Except us.

    • MA,
      You are correct in your description of the socialist running Government, anywhere, but perhaps especially so in Juneau.

      When it comes to economic issues the socialist rejects Adam Smiths ,” invisible hand” which rests upon rational self interest and instead employ their ” claw of government”. Javier Milei the newly elected President of Argentina has made an excellent argument depicting this travesty.

  2. Win, you’re a damn smart man. I’m assuming you’ve read Milton.

    The CBJ elite would rather rule hell than be princes in heaven.

    We could be the jewel of Alaska with not too much effort. Instead we’re the Tongass ourhouse.

  3. All communities are facing similar issues and Juneau will need to seriously get started on solutions. We will need to make Juneau an even more desirable place to live with a strong economy in order to convince younger peiople to make their home here. Yes we will need to trim our budget wherever possible but not at the expense of diminishing our livability. Perhaps more private /public partnerships like the intallation of the gondola at Eaglecrest could be explored. A world class ski area is a great incenbtive to bring young people here. A world class performing arts center would be another and perhaps a partnership could be forged there and eliminate or reduce the cost to the taxpayers. Affordable daycare is a huge issue in Juneau. Perhaps we could make room in our schools for daycare operators. Low or or no rent would be a pretty powerful incentive. Allowing bare bones subdivisions with no sidewalks, lighting etc may also help. Let’s hope our reformed assembly and new Manager will be able to look at some of these ideas and be willing to take advice from the business community on how to implement them without adverse effects. We;re all going to need to pull together to make things work.

  4. You read like an Assembly spokesmodel. When you toss around vapid buzzwords like “ world class” and “ pubic/private partnership” you expose yourself as the sort of reality disconnected mindset that got us in this mess.

    First, look at a map. Due to our isolation our “world class” amenities aren’t gonna draw anyone who doesn’t want to be here anyway. “Public/private partnership” means get the private sector to fund another poorly run CBJ boondoggle. Hell, we’re still quibbling over the dock Norwegian Cruise Lines is trying to basically give us.

    Low or free rent? How the hell does that work? Are the building owners just supposed to eat the costs? It flies in the face of common sense.

    High density, no sidewalks, no streetlight homes? Great for drug dens and gang activity.

    You want people to stay. It’s breathtaking simple. So much so the faux junta will never allow it.

    1-deal with the homeless. As in get them off the streets.
    2-deal with the open drug use.
    3-get serious about crime.
    4-clean up the borough.
    5-teach kids, don’t institutionally make them dumb.
    6-stop jacking up taxes to where people are losing money to stay here.

    And most importantly, jobs. Real jobs with Alaska livable wages.

    Building the road wouldn’t be a bad idea either.

    People are leaving because our schools underperform, our community isn’t serious, they lack employment opportunities, and our neighborhoods aren’t all that safe anymore. This is no place to raise kids anymore, and no place to grow old in.

    • Masked Avenger,
      As for building the “road”… I recently watched an interview with Patrick Moore, the founder of Green Peace. He talked about growing up on a remote part of Vancouver Island served only by boat or floatplane. For years the village folks debated whether connecting to the road system was a good or bad idea. Well, one day the village got a road!
      Wanna know what happened next? Seems that half of the population took advantage of the cheaper transportation option and pulled up stakes and left!

      Is this why so many of Juneau’s civic leaders are opposed to the road?

    • So you talk big but have no real solutions on how to achieve these things. All talk and no action it would apear. And it’s pretty amusing to hear your description of me. Anyone who knows me or anyone on the assembly is probably laughing their hiny off as that’s the last way any of them would describe me. Some of my stateside friends would describe you as a likely “all hat and no cattle.” You know who I am. When are we going to know who you are? What are you hiding? What are you afraid of? So sad. So pathetic.

  5. Juneau is getting just what they voted for. Maybe the voters will look at the liberals and figure out they want more power and money at any cost and they won’t quit.

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