1. Fueling Your Economic Development: The Power of New Money and Trade March 6 th, 2014 Marcus Hartley and Jonathan King Presentation to SWAMC Annual Meeting 2014

2. Introduction Our goal is for you to understand: The power of new money How new money and trade are related Why new money and trade are so important in Alaska and to economic development in general

3. Slide Title (Keep It Simple!)

4. hoopla Things More things Sub things

8. What Do They All Have in Common?

9. New Money versus Old Money New Money (Fills up the Tank) Brings new wealth to the community Only comes from outside the community It can be saved, invested, and grown. Or, it can be spent. When you start spending the money in your economy it gets burned in the local economy. Old Money (Gets Burned in the Engine) Recycles through the economy Transfers from person to person Eventually leaks out of the economy Unless the economy is fully self-contained Alaskan economies are not fully contained

10. How Does Money Move in the Economy

11. New Money: It Powers Alaska… Source: ISER, 2008

12. Without Oil We Are Half the Size Source: ISER, 2008

13. Every boom weve had: New Money! Source: ISER, 2006 1940 – 1960: Military Boom Population Triples 1940 72,000 1960 222,000 1973 – 1977: Pipeline Construction Boom Population up 25% 1973 336,000 1977 418,000 1980 – 1985: State Oil Revenue Boom Population up 30% 1980 420,000 1985 540,000

14. Where does Fairbanks Get Its New Money? Source: Northern Economics, 2010

15. Where does Fairbanks Get Its New Money? Source: Northern Economics, 2010

16. Fairbanks New Money Creates Jobs Source: Northern Economics, 2010

17. Fairbanks New Money Creates Jobs Source: Northern Economics, 2010

18. New Money in Rural Alaska Source: ISER, 2005

19. New Money in Rural Alaska Source: ISER, 2005

20. Why is New Money So Important in Alaska? Because our economies are terrible at holding in money!

21. The Big Boys get it…. Source: ANCSA Annual Report, 2010

22. CDQ Groups: They Understand It Also CDQ groups use new money revenues to: Own a larger share of the fisheries Create economic development and employment opportunities in their communities in and outside of fishing Even at a loss…. Source: CVRF, 2010

23. The Economy of Southwest Alaska

26. Where does your new money come from?

27. The Economy of Southwest Alaska Where does your new money come from? Fish Harvesting

28. The Economy of Southwest Alaska Where does your new money come from? Fish Harvesting Fish Processing

29. The Economy of Southwest Alaska Where does your new money come from? Fish Harvesting Fish Processing Waterborne Transport

30. The Economy of Southwest Alaska Where does your new money come from? Fish Harvesting Fish Processing Waterborne Transport State Government

31. The Economy of Southwest Alaska Where does your new money come from? Fish Harvesting Fish Processing Waterborne Transport State Government Federal Government

32. The Economy of Southwest Alaska Where does your new money come from? Fish Harvesting Fish Processing Waterborne Transport State Government Federal Government Tourism

33. The Economy of Southwest Alaska Where does your new money come from? Fish Harvesting Fish Processing Waterborne Transport State Government Federal Government Tourism Air Transport and Aviation

34. Why is Government Money New Money

35. Isnt government spending a drag on our economy?

36. Why is Government Money New Money Isnt government spending a drag on our economy? Shouldnt we be trying to cut government spending?

37. Why is Government Money New Money We pay our taxes

38. Why is Government Money New Money We pay our taxes Federal Income Taxes

39. Why is Government Money New Money We pay our taxes Federal Income Taxes Fish Taxes

40. Why is Government Money New Money We pay our taxes Federal Income Taxes Fish Taxes Local Property Taxes

41. Why is Government Money New Money We pay our taxes Federal Income Taxes Fish Taxes Local Property Taxes Local Sales Taxes

42. Why is Government Money New Money We pay our taxes Federal Income Taxes Fish Taxes Local Property Taxes Local Sales Taxes The Federal Govt spends much more in AK than we pay in income taxes

43. Why is Government Money New Money We pay our taxes Federal Income Taxes Fish Taxes Local Property Taxes Local Sales Taxes The Federal Govt spends much more in AK than we pay in income taxes Over 90% of State Government Funding comes from oil taxes & royalties

44. Why is Government Money New Money We pay our taxes Federal Income Taxes Fish Taxes Local Property Taxes Local Sales Taxes The Federal Govt spends much more in AK than we pay in income taxes Over 90% of State Government Funding comes from oil taxes & royalties Most of local govt and education funding comes from the State

45. So, What Should We Do?

46. Bring New Money In?

47. So, What Should We Do? Bring New Money In? Stick our finger in the Dam and plug the leaks?

48. So, What Should We Do? Bring New Money In? Develop Infrastructure Stick our finger in the Dam and plug the leaks?

49. So, What Should We Do? Bring New Money In? Develop Infrastructure Increase our exports Stick our finger in the Dam and plug the leaks?

50. So, What Should We Do? Bring New Money In? Develop Infrastructure Increase our exports Increase our ownership Stick our finger in the Dam and plug the leaks?

51. So, What Should We Do? Bring New Money In? Develop Infrastructure Increase our exports Increase our ownership Increase our employment in export industries Stick our finger in the Dam and plug the leaks?

52. So, What Should We Do? Bring New Money In? Develop Infrastructure Increase our exports Increase our ownership Increase our employment in export industries Lobby for more government funds Stick our finger in the Dam and plug the leaks?

53. So, What Should We Do? Bring New Money In? Develop Infrastructure Increase our exports Increase our ownership Increase our employment in export industries Lobby for more government funds Stick our finger in the Dam and plug the leaks? Develop and support local businesses

54. So, What Should We Do? Bring New Money In? Develop Infrastructure Increase our exports Increase our ownership Increase our employment in export industries Lobby for more government funds Stick our finger in the Dam and plug the leaks? Develop and support local businesses Buy local whenever reasonable

55. The Bottom Line

56. We need to understand that growth requires new money

57. The Bottom Line We need to understand that growth requires new money Unless the economy is fully self contained, the money will all leak out

58. The Bottom Line We need to understand that growth requires new money Unless the economy is fully self contained, the money will all leak out There is no panacea for economic development in isolated communities

59. The Bottom Line We need to understand that growth requires new money Unless the economy is fully self contained, the money will all leak out There is no panacea for economic development in isolated communities If it there were easy solutions, we would already be there

60. Fueling Your Economic Development: The Power of New Money and Trade March 6 th, 2014 Marcus Hartley and Jonathan King Presentation to SWAMC Annual Meeting 2014