Growth Pains

Juneau lay under a woolly fog that rolled in off the Gastineau Channel, and airplanes carrying Alaska legislators probed in frustrating circles over the capital's airport. Some lawmakers turned to dog sled and Coast Guard cutter, others waited restlessly in clearer areas until the fog lifted, but everybody was on hand last week when the new state's first legislature was gaveled into its second session. Fortuitously, a "Capital-Site Steering Committee" came around with petitions bearing the signatures of 13,000 Alaskans who want the capital moved from fog-plagued Juneau westward to the Fairbanks-Anchorage area; the question will go on next November's ballot. But after a few reports were read, Alaskan lawmakers had reason to think about some far more fundamental aspects of Alaskan statehood.

In the year since the legislature first met, thousands of state salaries have been increased, some by as much as 35%. But there have been no new general taxes. The state has taken over control of fisheries, courts and penal institutions, and bothersome bureaucratic bugs have been ironed out. But a glimpse of the financial forecast for Alaska was as sobering as a plunge in the Bering Sea.

In this fiscal year, Alaska is operating under a $27.7 million budget. For fiscal 1960-61, Governor Egan is asking for an increase of some $6,000,000, while increasing the revenue only some $1,050,000. The budget will get one big boost from a juicy windfall: $4,000,000 gained from the sale of 77,000 acres of tideland oil and gas leases last December. It will get another from the transitional fund voted by Congress to tide the 49th state over its early years; the 1960 portion will amount to $6,500,000. And what happens after 1964, when the transitional aid reaches $28 million and stops?

The state planning commission gave an inkling. Items:

P: At its present rate of earning and spending, Alaska will, by 1966, have fallen $30 million into debt on its operating programs alone.

P: The state needs a $333 million "minimum" capital-improvement program (which calls for $80 million in state funds, the balance in matching federal funds). But if such a program is attempted, the 1966 deficit will go to $72 million.

P: Alaska cannot hope to raise taxes appreciably, since it is a pioneer economy trying to attract new industry; it cannot fall back on a bonding program, said the commission, "until there is assurance that the state will be able to meet its bare operating expenses out of current revenues."

Governor Egan and most of the legislators were stunned. Said House Majority Leader Pete Kalamarides: "I think it's too pessimistic." Said George W. Rogers, economic consultant to the commission: "We need, right away, some basic new thinking on development."

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