Curtis W. Thayer

Since 1953 the Alaska Chamber has been the voice of Alaska business large and small across Alaska with a mission to promote Alaska as a great place to do business. To better understand the concerns and needs of Alaskans, the Chamber conducts a robust annual statewide poll — and the 2018 numbers are in. As much as we’d like to dedicate all of our time and attention to issues like economic diversification, small business startups, resource development, and much-needed workers’ compensation reform, state spending is still the overwhelmingly dominant issue on Alaskans’ minds. The issues that unite us What is abundantly clear in our findings is that without a doubt Alaska’s state budget dilemma remains the top concern on Alaskans’ minds. Along with the budget there are several notable and important issues on which Alaskans are strongly aligned. Some issues that enjoy the support of two-thirds or more of Alaskans include: • Implementing a cap on state spending (78%) • A work requirement for Medicaid recipients (77%) • Making cuts to state spending (72%) • Exploration and production in the Arctic National Wildlife Refuge (68%) • Offshore Alaska oil and gas exploration and production (67%) These are issues that Alaskans agree on so strongly that they are overwhelmingly likely to pass should they ever go before voters on a ballot. You’d think that this type of universal alignment would mean these issues are likely to be introduced and passed in the Legislature but, unfortunately, that’s not always the case. Perhaps with education and strong advocacy from statewide constituents, these issues might advance through the legislative process. Economic perception Each year we ask Alaskans to rate the current condition of the state economy. Public perception has basically held steady at just over 60 percent of Alaskans rating the economy as poor. While Alaskans remain unhappy with the overall state of the state economy, public opinion appears to have hit rock bottom. Perhaps now we can start climbing back out. I hope that Alaskans see national trends and upcoming opportunities to improve state leadership as a chance to stabilize — and perhaps begin to improve — the health and direction of the Alaska economy. The elephant remains in the room Alaskans still believe that the road to a balanced budget must be paved with cuts to spending and services. Cutting the budget outstrips all other fiscal options, including use of the Permanent Fund earnings or new tax revenues, by an overwhelming 10 percent to 36 percent. Today, those cuts may look more like structural reforms such as workers’ compensation reform that will save Alaska and business money. I mentioned that Alaskans are still concerned that the state is on the wrong track (66 percent). We went one step further this year, asking for recommendations on what might be done to get our state on the right track. Cutting spending to balance the government budgets is the number one recommendation. For Alaskans, reducing spending and eliminating services are more important than increased resource development, economic diversification, new state leadership and new taxes. Moving forward For decades now the Chamber has advocated for a fiscal plan focused on Alaska’s future. Smart spending habits, responsible use of our savings, and pro-business policies that encourage the development of our natural resources to grow Alaska’s economic pie are the cornerstones of our advocacy efforts. And we now find that Alaskans agree. Over the remaining days of the legislative session, through the interim, and throughout the upcoming election season, we will continue to find shared, common ground and meaningful trends in the 2018 polling data. While Alaska is navigating a patch of rough road, the good news is that maybe we’re past the frost heaves. There are many issues that unite Alaskans. As individuals and as companies its time to come together to advocate for public policy that Alaskans from across the state can support. Curtis W. Thayer is lifelong Alaskan and serves as president and CEO of the Alaska Chamber.

We owe a huge debt of gratitude to our congressional delegation of Sen. Lisa Murkowski, Sen. Dan Sullivan, and Congressman Don Young. They delivered the ultimate Christmas gift to Alaska: the ability to open the 1002 area of the Arctic National Wildlife Refuge for safe and environmentally responsible oil exploration. ANWR has been a 37-year, uphill battle, once passed by Congress only to be vetoed by President Bill Clinton in 1995. Now that Congress and President Donald Trump have finally approved ANWR, Alaska must not squander the opportunity. Considering how we have stymied progress on new oil discoveries by independents during the past three years, we are now our own worst enemy to developing ANWR. I recently had the opportunity to talk with several independent oil companies’ executives, some doing business in Alaska and others not. And while their interests and objectives vary, there are common conversational threads throughout, some heartening and all worth noting. Most independents believe that Alaska has the potential to be one of the hottest oil basins in the world. In fact, it’s a point that has been reiterated time and again. I find that very encouraging, but it begs the question, “Why aren’t we seeing a boom on the North Slope?” The independents’ answers were swift and critical. They said we need to listen as a state and be proactive to take advantage of the huge opportunity to compete with other states and attract the billions of dollars available for investment after the passage to the recent federal tax legislation. They weren’t critical of our geological formations or their potential; rather, as one seasoned North Slope independent put it, “Alaska’s problems aren’t in the rocks, the state’s problems are all above the rocks.” This is one of the universal themes shared by the industry executives I’ve spoken with. They believe the state’s problems are of our own making, and what I find encouraging is that these problems are preventable. All the independents agree that we need to approve permits in a reasonable amount of time. California, for instance, is revered as an environmentally sensitive state. It’s embarrassing that its permitting time is a fraction of what companies must endure here in Alaska. The independents also complained about the state’s confusing and ever-changing tax code. They wondered why they couldn’t create a simple, reasonable and fair tax code and stick with it like all the other oil basin states do. Some executives suggest that Alaska might partner with industry by helping with much-needed infrastructure. Similar to what we did to stimulate the development of Red Dog Mine, we can build roads, airstrips and shared facilities that become revenue generators through industry user fees. Others were critical; suggesting that the state could work with Native village corporations to improve relationships and help mitigate land use plans and permits. All the independents agree that if the state would meaningfully address these concerns, Alaska’s oil fields would boom with success. Success seldom just happens. It’s not a game… it is a plan and a strategy. And if we want success, we need to address these concerns with practical resolve. Independents like Hilcorp, Armstrong Oil &Gas, Caelus Energy Alaska LLC, and Oil Search — coupled with companies like BP, ConocoPhillips, and ExxonMobil — are all striving to ignite a renaissance on the North Slope. They are proving that our geological formations are oil rich with much more still to be discovered. These companies are finding success despite the unfriendly environment that has soiled Alaska’s reputation with investors and explorers. It’s time that we quit fighting industry over nickels and dimes when billions are at stake. It’s time to remove the barriers that hinder our state’s financial success. With the New Year fresh, let’s seize this opportunity and work to realize our potential. Let’s put our minds and efforts towards creating new wealth for Alaska instead of fighting over a series of nuisance and regressive taxes that will harm the economic well-being of our communities. The opportunities exist for success. All we need now is the political will and leadership to realize that success. It’s time to roll up our sleeves, formulate a plan, implement that plan, and enjoy a tremendous 2018 for Alaska. ^ Curtis W. Thayer is lifelong Alaskan and serves as president and CEO of the Alaska Chamber.

Creating wealth unfortunately doesn't just happen; rather, it’s a function of having a "can do" spirit, working hard, being smart and sometimes even a little luck comes into play. We don't have to look very far, only to Seattle, to see the negative consequences of what happens when government places a local income tax on individuals. The reaction was swift and severe. Amazon’s founder and chairman, Jeff Bezos, announced that his company — which from 2010 through 2016 provided $38 billion to Seattle’s economy — plans to open Amazon HQ2, a second company headquarters in North America. Amazon is now asking other cities and states across the nation to submit their proposals to home HQ2. One city’s mistake could be Alaska’s gain. Amazon’s proposal for the initial investment for their new headquarters is $5 billion. This would create more than 50,000 jobs averaging wages of more than $100,000 a year in the first five to 10 years. Amazon has stated that the criteria for selecting a location would be a metropolitan area with more than one million people, a stable and business-friendly environment (we need to work on this), urban or suburban locations with the potential to attract and retain strong technical talent. Why Alaska? While no one city or metropolitan area has all the attributes that Amazon is seeking, Alaska offers a diverse workforce, a geographically strategic position in the world, quality schools, an international airport that is a cargo crossroad of the world and best of all, a place of majestic beauty, quality lifestyles and an abundance of outdoor activities that their "millennial workforce" demographic appreciates and values. Landing Amazon HQ2 would be a prize for anyone. But for Alaska, it would be a home run that would play a huge role in diversifying our economy. The economic activity would shore up home prices, spur construction, generate new businesses to service Amazon and their employees, and substantially grow the property tax base of local governments. Unfortunately, while many other states and municipalities across the country are scrambling to get in front of Amazon, Alaska's political hierarchy seems content to let this opportunity pass them by.  I'm sure the left will criticize my advocacy for wealth creation, screaming the need for more taxes. To them I say, "we can't tax ourselves into prosperity." Yes, taxes are a necessity to fund government; however, energizing the private sector and insuring its well-being, especially during a time of economic decline and uncertainty, is prudent. I realize that the politics of such are tricky. But that’s not a reason to not try. Just like there’s no reason not to try to lure Amazon to Alaska. I think its time that we change the narrative from more taxes to focusing more on economic opportunities, resource development, growing our tourism market and the many other opportunities that are out there. This requires vision and hard work. Its time our elected officials start working with the private sector to grow the economy and create wealth. This will ensure that future generations have even better opportunities and benefits from this great state that we have experienced. Can we get Amazon's HQ2 to Alaska? We'll never know if we don't try. If nothing else, it would be a good exercise in taking inventory and evaluating Alaska’s business climate. It could also serve to pull us together as a state, to remind us of what we have and what we are capable of. Alaskans deserve vision from our elected officials. We need leaders who look to other areas to see what’s worked and what hasn’t worked. Amazon’s announcement is proof that businesses want tax stability. We should heed that lesson for current and future businesses in Alaska, and we should strive for more. Curtis W. Thayer is lifelong Alaskan and serves as president and CEO of the Alaska Chamber.

Change is hard… even when everyone agrees that change is necessary. It’s easier to do nothing than it is to affect change. But every once in a while you bump into something that’s just so utterly broken that change is the only option. That’s where we’re at with Alaska’s workers’ compensation system. In 2004 Alaska was the second most expensive workers’ compensation state in the country. It took us almost a decade, but in 2012 we finally dethroned states like California and Illinois as the worst in the United States. When it comes to getting hurt people back to work, we’re no longer dead last in the nation. But we’re close enough to remember the feeling. The Alaska Chamber has been working alongside Sen. Cathy Giessel and the Workers’ Compensation Committee of Alaska to tackle our broken workers’ compensation system. The introduction of Senate Bill 112 is the first step in addressing the problem and we look forward to working with all parties to fix the system. The argument for reform The obstacle that derails many reform attempts is that frequently there are opposing constituencies on either side of an issue. That’s not the case with workers’ compensation. Alaska’s current system is broken and it’s not serving anyone. In 49 of 50 U.S. states, litigating attorneys are compensated based on a set percentage of settled claims. In Alaska, attorneys invoice for their time and preferred hourly rate, in some cases exceeding the settlement amount. Ten years ago when the Chamber started advocating for reform, you’d mention workers’ compensation in a room full of people and everyone’s eyes would just glaze over. There are a lot of moving parts to the system, and it’s taken a long time to get everyone up to speed on why it’s failing Alaska workers. But we’re there now. Over that last three or four years, Alaska has flirted with incremental improvements. Progress has been frustratingly slow, particularly if you’re an injured worker floundering in a bungled system or an employer hemorrhaging money at activities that don’t help your employees. We’ve made small improvements, particularly with the medical community stepping up to accept certain payment controls on common procedures. And now we’re finally ready to tackle the foundational flaws in Alaska’s failed workers’ compensation system. So what has to change? Make wise choices Alaska needs to adopt options for employees to direct their own care. Currently, if an Alaska worker is uncomfortable or dissatisfied with their doctor, they can switch once. Then they’re stuck. It’s worse for employers. If there’s a talented specialist or experienced out-of-state option, our Alaska companies or their employees don’t have that option. Use what works There are medical treatment guidelines that help ensure treatments for injured workers are both reasonable and necessary. Alaska doesn’t use those guidelines and we should. Similarly, we need to adopt official disability guidelines and utilization reviews to make sure our provider community is getting our workers the care they need. Pull the rest Re-employment benefits pay for training so injured workers can move into a new field. Re-employment training sounded pretty good as a concept; however, in practice, re-employment benefits don’t do anything and need to be repealed. Between a Department of Labor commissioned study and one from California, we find that nearly no one completes their re-employment program and they return to their old profession. Instead of giving people a lump sum for training they’ll never get, we should implement a voucher system that will go towards a person’s re-employment program. The inner workings of workers’ compensation are legitimately challenging, but the goal of the system isn’t. Many states have success models that we can use to improve our system. Alaska can make wise workers’ compensation choices, use what works, and get rid of programs that don’t. Curtis W. Thayer is lifelong Alaskan and serves as president and CEO of the Alaska Chamber.