A quarter-century ago, Congress appropriated $110 million explicitly to help Southeast communities get through the loss of the timber industry, the region's big economic driver. This year, federal money is coming to the aid of the new dominant industry, tourism.
However, Sitka Sen. Bert Stedman said, there is a key difference between the loss of the timber industry and today's struggles in the tourist industry: Tourism will come back one day. But it will take time.
Federal pandemic relief funds under last year's CARES Act and this year's American Rescue Plan will total tens of millions of dollars for cities, boroughs, school districts, businesses and nonprofits throughout Southeast.
In addition, Gov. Mike Dunleavy plans to spend some of the state's share of CARES Act money on a nationwide tourism marketing campaign, including television ads and other promotions this spring and summer.
And the governor last week said he will seek legislative approval to spend $150 million from the state's share of American Rescue Plan federal dollars to help tourism-dependent communities and businesses statewide.
There are some parallels between the timber aid in 1996-1997 and pandemic relief funding in 2020-2021, but there is "a big, big difference," said Stedman, who represents much of Southeast.
The loss of pulp mills in Sitka and Ketchikan, sawmills in Wrangell and Ketchikan, logging camps and goods and services suppliers areawide was permanent, Stedman said.
Though temporary, the effects of lost tourist dollars will not reverse quickly. "This isn't a two-year slump that goes right back to normal," the state senator said of pandemic closures of cruise ship traffic in 2020 and 2021.
The abrupt loss of visitors when the pandemic shut down travel last year had a more immediate impact to communities than the closure of the timber industry spread over several years, said Rep. Dan Ortiz, whose family moved to Ketchikan in 1969 when he was 10 years old, during the good years of timber jobs. He worked at the pulp mill in Ketchikan during his college years, at the wood digester and in the yard.
"There was time to adapt, to know that big changes were happening to the timber industry," said Ortiz, who represents Ketchikan and Wrangell.
The loss of large cruise ships for the second summer in a row will hit hard at tourism-dependent Southeast ports, especially communities where visitor spending is a larger slice of the local economy.
Businesses in the Denali Borough are suffering a similar fate, Stedman said, as the area is heavily dependent on travelers drawn to Denali National Park and Preserve, one of the state's top attractions.
"We're all hopeful, but we're beginning to realize it could be two or three years" before the visitor industry in Southeast recovers from losing much of its revenues two summers in a row, Ortiz said.
In Wrangell, less than 2,000 cruise ship passengers are expected this season, down from maybe 10 times as many if a federal no-sail order and Canada's decision to close its waters had not devasted the business.
Although all the federal and state financial assistance will help, the effects could be long lasting. Some businesses that took on debt to get through the pandemic-induced recession could be repaying those loans for years, Stedman said.
Even if the economic damages push some business owners to decide it's time to retire, he said, others will take their place to provide the services visitors want when they come to town, such as tours.
The expected loss of up to 1.3 million cruise ship passengers for the second summer in a row makes it hard on economists to figure out where the Alaska economy is heading and how long it will take to recover lost jobs. The state in March was down almost 22,000 jobs from a year ago.
"We're wrestling with what another year without large-ship tourism will mean," Dan Robinson, chief of research and analysis at the Alaska Department of Labor, told a House committee April 8.
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