Alaska ranks near bottom of economic freedom index
Published Monday, September 29, 2008
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Stumble It!FAIRBANKS — High levels of welfare spending per capita and a large number of people receiving help are keeping Alaska near the bottom of an index measuring economic freedom in each of the 50 states.
The bottom isn’t a good place to be, especially as companies look for competitive, solid environments to locate new business, said Dr. Lawrence McQuillan, a study author and director of economic and business studies for the Pacific Research Institute.
The institute, in association with Forbes magazine, developed the U.S. Economic Freedom Index to evaluate how friendly or hostile state government policies are toward free enterprise and consumer choice. Previous reports were issued in 1999 and 2004. The authors have shown that states ranking higher in economic freedom tend to have higher growth rates in income, employment and population.
In states that limit economic freedom or do little to build greater freedom, people tend to leave. Those who stay often end up poorer, the study said.
States that try to offer greater freedom often see an influx of people, capital and business that expands the tax base and stabilizes revenue streams for long-term economic health, McQuillan said.
The nation’s most densely populated states also are some of the least economically free, and many of the Western states that value less government intervention in markets are more free. Alaska stands out as an exception.
McQuillan and his team gathered data on 143 indicators in each state — things like tax rates, state spending, the size of government, tort reform and environmental regulations.
The institute’s first index, in 1999, set Alaska at 38th. The state nudged up a few slots to 32nd in 2004, then slid 12 spots to 44th.
“It’s definitely headed in the wrong direction,” McQuillan pointed out. “But it might not be because of anything Alaska has done. It may be more about what Alaska hasn’t done.”
Either way, he said, the state is at a major competitive disadvantage when it comes to diversifying the economy with new industries and adding fresh jobs.
McQuillan said two factors really push Alaska to the bottom.
In the fiscal sector, Alaska ranks 30th, a major downturn since 2004, when the state placed ninth. He attributes the slide to a record-high operating budget signed by Gov. Sarah Palin in 2007, which equates to higher state and local government spending for the size of Alaska. He acknowledged the index doesn’t account for the state’s unique geography or the higher costs associated with doing business of any kind in the state.
The second red flag, he said, is in the dollar amount and number of recipients of welfare spending — or, as the institute defines it, the amount of money being transferred from the working class to welfare recipients.
By his analysis, Alaska government isn’t really growing despite record revenues. In fact, Alaska government’s size ranking improved from 47th to 31st. Instead, more money is going to welfare — Medicare and Medicaid, food stamps, support for women with infants, and other federal outlays like Temporary Assistance for Needy Families. Alaska not only spends a lot per person on welfare, but allocates assistance to a high percentage of its total population.
“You have very generous welfare payments, and you have a lot of people who are on public assistance, given your population and the size of your state,” McQuillan offered. Study authors give extra weight to welfare, which they define more or less as taking wealth from one sector and giving it to another. “We see that as the most egregious violation of economic freedom. There is no bridge being built, there is no road being paved, as there would be for some sort of public asset.”
Among the institute’s findings:
• Alaska ranks 49th per capita in state and local welfare spending.
• Alaska ranks 44th for the number of TANF recipients, and the monthly average benefit for a family of three is the most generous in the nation.
• Alaska is 49th for average food stamp benefits paid and for average monthly benefits paid out under the federal Women, Infants and Children program.
• The state improved in the judicial sector, moving from 42nd to 19th. That’s a good indication that the lawsuit climate, such as tort costs and liability risks, is improving, McQuillan said.
The Tax Foundation, a nonpartisan tax research group in Washington, D.C., marks Alaska as a beneficiary state, and the third-highest in how much residents receive in federal funding for each tax dollar paid. In 2005, residents received about $1.84 in federal spending for every dollar paid in federal taxes.
McQuillan said states can use the institute’s index to make policy changes and build public awareness to create a more competitive economic environment, which could draw new industry and make new jobs.
“You’ve got to work around your faults,” he said. “You can’t change your weather, but you can change your policy environment.”
Contact staff writer Rena Delbridge at 459-7518.
Community Discussion
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Now if we could convince our state and local governments to do away with the certificate of need program, we would be on our way towards the goal mentioned, a better economic environment.
Did you know, for many procedures, it's cheaper to fly to anchorage and have it done, than to have it done here in Fairbanks? That includes travel expenses. I've heard that many medivacs even divert straight to anchorage, rather then bring people to Fairbanks, simply due to the cost of treatment here.
Time after time, new medical facilities have been blocked by Fairbanks Memorial Hospital with the certificate of needs law, citing that Fairbanks does not need more facilities, YET FMH has spent millions in expansions in recent years.
I would hope the news centers in Fairbanks, would devote as much time to rooting out corruption in the local governments and issues such as this that actually MATTER, that they do running down Gov. Palin.
Anchorage, the largest populated area in Alaska, has several major medical facilities, and lower costs. We can't look to them for help in this matter because even Anchorage benefits from our higher cost of medical care.
It's up to us, to make a change and I urge you all to do what you can, to help promote better and more affordable health care in Fairbanks. Fight to do away with the certificate of needs program, because Fairbanks NEEDS a competitive health care market.
Then let's starting cutting welfare for adults. It is not the government's duty to take care of adults, nor should it be the involuntary burden of others in society. I know somebody is going to come back and say that we don't pay taxes, but many here actually do. There are a fair number of taxes imposed by the state, just not ones that affect everyday citizens.
Maybe it's all that "OIL MONEY FOR FREE" that's got ya'll so screwed up.
gopking -
I agree - -
Put all those on Public Assistance to work for the State. If the State pays their bills - they should have to wear road-guard vests and pick up trash on the highways, etc
I had a friend who's father worked 8 months a year on the slope and made good money - then would take a 'vacation' and claim unemployment ----
wash, dry, repeat...year after year...
enough
We're all gonna work for the state?
As everyone knows, Alaska, and especially Fairbanks, has a lot of obstacles to overcome in order to improve our economic freedom. Fairbanks will never have the growth and expansion that can happen in other parts of the US, simply because it is pretty miserable to live here. Yes, Fairbanks has grown a lot in the past 10 years, judging by the traffic and box stores, and it will continue to grow, but at a very slow pace. Who wants to spend 6 months in darkness and extreme cold? Not many. Anchorage, wasilla and palmer have it a little easier, and which shows in the grown in Wasilla and Palmer.
And then we have our population. Fairbanks has some of the nicest people, but also laziest people I have ever seen. I used to work with "seasonal" co-workers for years (I was always F-T however), and many, if not most of the "seasonals" work the summer and make good money and then collect unemployment for 6 months, during the off-season. Year after year after year, and our state allows this to happen. And the worst part is that these seasonals have come to expect their off-season handout each year, while they vacation in mexico all winter...
Hold your horses....unemployment is NOT WELFARE. Unemployment is paid in by businesses and government every payday for all workers. Look at your leave and earnings statement. I work for the federal government, I also collect unemployment every year. Go talk to someone in the EMployment office and ask them. They will be the first to tell you that it is NOT WELFARE!! I feel fortunate to have my seasonal job and value my time off in the winter. There are MANY seasonal employees up here, I would venture to say maybe even half of the workforce is seasonal. Just because you are among the folks that work for the man all year long, don't put down those of us that pay into unemployment and then collect it.
Yukon-
Sorry ...I disagree with you. Besides "Unemployment," who is paying your health care when you get sick? Are you paying out of pocket? Or, are you claiming more "entitlements?" Lame excuse and a convenient one. Enjoy your winters!
Personally, my values would NEVER allow me to take a dime unless I was truly unable to get work. And at that, the guilt would eat me alive. Another thing, even when I was working seasonally, I always had a winter job to help make ends meet. IF you make enough to live in 8 months you should NOT claim unemployment. This is why this country is failing so miserably.
As far as those gaming the system, shame on you all!
I don't think we are hurting to bad, from the Newsminer the other day !
Alaskans have donated $1.1 million to presidential candidates during this two-year election cycle!
(Grins)
There is NO reason why anyone here should be on welfare. There are more jobs here than people. It just plain out right lazy. Why work when the government will support me and my 10 kids. The place I work in is always hiring. Applications can be picked up at 89 College Rd
These people who don't work shouldn't be entitled to full dividend monies either.
Im sure they didn't save this money for fuel and living expenses but were in Walmart buying needless toys, bikes, high end electronics that they didn't need.
GET A JOB!!!!!!!!!!!!!!!!!
Um. Wait. I thought I paid into my unemployment, and have for more years than I care to count. So if I decide to apply for it at some point, some people would shame me for it? I think some folks are just too full of themselves.
The entire report may be downloaded from the Pacific Research Institute's website: http://liberty.pacificresearch.org/publi.... The full report itself is a PDF. The executive report begins on page 7; a table ranking the states' "economic freedom" is on page 11.
PRI claims in the report that "economic freedom not only correlates with economic growth and prosperity, but also is a direct cause of and necessary condition for it" (page 15). But what I don't see except for a fleeting reference on page 22 (and I have only skimmed, not read closely) is any correlation between "economic freedom" and any reasonable measures of human happiness. Does PRI's index correlate with health? with longevity? with social equality? with a decreased rate drug abuse, violent crime, or suicides?
The relationship of "freedom" with happiness is not simple, and it is not linear. That is, it is just not true that every kind of freedom is equally valuable, nor is it the case that, without limit, the more freedom you have, the happier you will be (whether as an individual or as a people).
With little attention paid to the relationship between "economic freedom" and real human good, and altogether too much attention paid to the glories of (presumably unrestrained) capitalism, the PRI report is nothing but ammunition for deregulation-seeking industries. I have no reason to believe that the report should have any bearing on our personal lives or that it should influence our politics in the least.
Besides "Unemployment," who is paying your health care when you get sick? Are you paying out of pocket?
Agamemnon, I pay for my health care!! I have BC/BS that I pay for out of my paycheck. I catch up payments out of my checks when I return to work every spring!
Sorry you disagree, but disagreement is a good thing, and it is what keeps this comment site going!! LOL Have a great winter too!
Rockee-
All I have to say is WOW! Makes me sad that someone would voluntarily NOT work to get on the dole as a matter of convenience, not because of health, age, or being involuntarily let go. What is this country coming to? Another reason why we are falling behind in the world... God help us. Sad thing is that we have a whole generation coming up now that has neither work ethic nor conservative financial habits...as a whole.
Pass me my Wii control and Iphone please. That was the best thing I could think of to spend my dividend on... LOL
What about " job" welfare in the form of government funded jobs. How many people in this community are paid by the government (Federal, State, and local). Non profits employees, health care workers, teachers, university workers, police, firefighters, government agencies workers, daycare providers, elder care providers, government construction projects, military, military related civilian jobs, dog catchers, bus drivers, road repair, snow removal workers, etc.. What would happen if the government money disappeared for this. Fairbanks would be left with no economy. So stop looking at the poor, look at where your own paycheck comes from. By the way, those who don't get paid by the government, how long would your job last if these people didn't have a job?
wife228 said- "Im sure they didn't save this money for fuel and living expenses but were in Walmart buying needless toys, bikes, high end electronics that they didn't need."
or having crap food delivered to your door, right?
(she works @ pizza hunt)
I think its misleading,
First of all, it counts the many unemployed in the villages the same way it would someone on the dole in the Bronx, which is a misrepresentation.
I bet it counts the PFD as a part of welfare, which no matter your POV skews things.
Heating assistance, while it is welfare, is very different up here. Its a neccessity for many, even those who work.
Alaska has a lot of seasonal jobs, be it tourism or fisheries. I have no idea how unemployment figures into it, but it creates a further skew as these industries are geared for people to work part-time.
In truth, I think there is a much smaller percentage of people up here who just use the system. Granted many do, but I think its not as bad as other, denser populated areas.
Give me a break. Every Alaskan, but two is on welfare. It is called the energy rebate. Not that there is anything wrong with that......or is there? Actually, every Alaskan including those two is on welfare. Alaska gets more back per tax dollar paid to the feds than any other state. If you pay the government a dollar and they give you 1.40 back, yes that 40 cents is welfare. We live in the ultimate socialist state. Now why we are wasting this welfare money, and not buying the flint hills refinery or providing public health care, is beyond me.
I just love it when these studies try to lump Alaska in with other states like Idaho and then say that we spend too much money to operate. Hell, we could be just like Idaho if we completely shut down the state ran ferry, shut down the state ran railroad, university campuses and close all those bush air strips. Stop taking royalties for the oil on the slope, stop the P-fund dividend, kill all those pesky environmental regulations that make oil, timber, and minerals more expensive to extract. We could impose tort reform so Exxon and the others wouldn't have to spend so much on court battles or to safeguard the marine environment. The Fed could close the bases around the state so as to make the amount of federal money spent per resident less. The Fed could also stop sending the mail to bush communities where the costs are much higher. We could adapt "right to work" laws so unions would be in a much weaker position to get workers a decent wage and working condition.
If we could do all these things then maybe it would be more "friendly" to big business to set up in the state. They could extract the resources cheaply and with abandon and set up factories with cheap labor imported from the lower 48 or maybe even overseas. Without any taxes or royalties to pay for the resources, or environmental concerns, Alaska could rank right up at the top for business to do its thing here. It sounds like just the kind of place I would like to live in... NOT!
I remember a law being passed years ago that only allowed people 2 years of welfare and then they were cut off. 2 years is quite a long time, but I am wondering if this is still a law or was it phased out?
I imagine it is mostly drug dealers that cause the welfare problems. They all get paid "under the table", so besides living like kings selling their dope they also get to collect welfare. Cool.
Suomi - I agree with you in the bailout - 100%. It is going to pass anf this country is going down the drain the rest of the way.
chewtoy says "If you pay the government a dollar and they give you 1.40 back, yes that 40 cents is welfare."
I have heard so much about the imbalance of fed dollars coming into the state versus fed tax dollars going back out. Just by looking at the numbers it always appears that AK is taking so much more from the fed and giving back much less. Often however, things are not what they appear. One should ask if the figures for Fed money coming into the state include such things as military bases? I am not sure what the "Tax Foundation" used to base its claim of $1.84 Fed dollars spent here for every dollar paid out, but we are most likely going to have more fed spending here then say Wyoming. We have the Coast Guard here for instance. Also a lot more military spending as well. Often times the study wielding the stats can make them skewed in their favor and not technically be lying.
Statistics, especially when used to compare a state like AK with the lower 48 are usually biased in some form or another.
Now even if we get 1.01 for every dollar we send the feds that extra bit is welfare plain and simple, so now we know what we are and were just haggling over price...
Hey Wife228... the last time I was in the pizza joint you refer to, I ordered a pizza, then went to the Men's room. An employee was just finishing his business and walked out without washing his hands. A minute or so later I came out and saw this guy making pizzas. Needless to say I cancelled my order and left. I can only hope this guy is on umemployment for the sake of all the current customers.
moondoggie, I really hope you told the "pizza joint" WHY you cancelled your order!
so people who are disabled should have to work???
"so people who are disabled should have to work???"
Of course! they can greet people at walmarts doors, or bring carts with their wheelchairs, the lazy bums! How dare they use my tax dollars to just sit at home all cozy whilst I have to work! Then they take the Alaska Permanent Funds, that could go to me mind you, and buy big-screen TVs! I bet they buy beer too, and sell drugs...mumble grumble~
Bah-humbug... let em all freeze, and decrease the surplus population~
so does that mean I can get a rebate for all the social sercurity disability insurance $$$ I have paid in all these years?
Nah, all that should go to paying off the debts on Wall St.
--_^
I hear the commercails for Papa Murphys advertising that they can now accept Quest cards...WHAT!! Im not saying people on welfare dont deserve pizza...but seriously? Next they will be able to buy movie tickets with them, or maybe treat themselves to a nice dinner at the Vallata. What next?
Of course ya'll know that the "economic freedom" index does not really measure individuals' "freedom", but corporations' "freedom" to exploit Alaskans and our resources for corporate profit. It's the fatcats' economic freedom that the study is measuring, not yours and mine. It's the multinational corporations' ability to swoop down on Alaska communities and displace our mom and pop stores, destroy our local economies, and devastate our environment without interference from the state or local citizens that is being measured. I'm thinking that Alaska being near the bottom on this measure might be a GOOD thing, not a bad thing. http://liberty.pacificresearch.org/about...
The numbers show that non-payment of child support is a huge contributer to the welfare roles.
In fact, I have had many people who work for, primarily the state but also the federal government, suggest I apply for cash welfare. They say that will help motivate the state to enforce the laws on the books.
Pretty sorry, huh?
But it's true. Those are the numbers used by the state and feds to evaluate success in child support collection. Collection for the gov from current or past welfare cases.
The more the state collects from welfare cases, the more the state is deemed to be deserving of more federal money for its Title 4 federally mandated child support agency.
Where do you think the effort goes?
The rest are pretty much ignored, except for those that are easy; ie, the obligor actually works, so automated withholding notices are all that's necessary, pretty much.
Anything beyond automation--such as the people who refuse to be responsible, the ones who are the targets of the law, and the laws are on the books--and the state does nothing to virtually nothing.
Alaska and the federal government encourage those who don't receive ordered, lawful, child support to be on welfare. The main reason for the 1974 initial federal mandate for all states to have child support collection agencies was to keep people off the dole.
Yet, as all government is apt to do, it's become a money, make work game for the gov. Get 'em on welfare, collect as much as you can from the obligors of the welfare recipients, (ignore those that refuse the cash welfare--even though it goes against statute), look good to the feds, get more money from the feds to fund the state collection agency, keep the job program going...
I have nothing against child support collection for past or current welfare recipients.
I have a lot against the government advocating welfare while ignoring child support laws, and then using the whole racket as a gov job program.
It has nothing to do with kids and families as the gov claims. If it did, fewer people would resort to welfare, and both the state and the feds would enforce the laws that exist in statute on the books now.
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