Native organizations lifting Interior economies

Native organizations are giving the Interior major lift, according to a new study conducted by Doyon Ltd., Tanana Chiefs Conference, Fairbanks Native Association and the Interior Regional Housing Authority.

An economic impact report reveals that Interior Native organizations are a significant contributor for the region, accounting for nearly half a billion dollars in economic impact and the fifth-highest employment.

About 70 Native organizations were surveyed, including 42 tribal governments, 25 village corporations and some regional nonprofits. Of those, 26 are for-profit organizations and the rest nonprofits.

Using 2010 data, the survey found that Interior Native organizations spent $178 million in the region with 46 percent of that on goods and services from Alaskan businesses. Indirect spending brought the total economic impact to $307 million.

Dividends from villages and regional corporations to shareholders added $3.7 million to regional household incomes.

These organizations paid $3.8 million in property taxes to the Fairbanks North Star Borough general fund and $5.5 million in local property taxes.

Employment was a large factor. Native organizations provided 2,725 direct jobs in the Interior, making them the fifth-largest employers in the region following the military, federal government, the University of Alaska and the Fairbanks North Star Borough School District.

Of those jobs, 1,238 were in Fairbanks and 1,487 in Interior villages. An additional 848 indirect jobs resulted from Native organization spending. Together this accounted for more than 7 percent of civilian wages in the region.

These jobs paid $101 million in wages and benefits to direct employees. Indirect payrolls added another $46 million.

Statewide, these organizations employed 3,704 and paid $145 million in direct wages and benefits.

Doyon President and CEO Aaron Schutt said about 40 percent of those surveyed returned data, which is enough to model the overall impact of the Interior. This includes 10 to 12 village corporations and perhaps up to 20 of the tribal governments.

The participating Native organizations cover a broad range of businesses. Doyon is a for-profit Alaska Native regional corporation with an umbrella that covers government contracting, oil field services, tourism, natural resource management and construction. The Interior Regional Housing Authority works in low-income housing development with around 31 tribes.

“It was certainly a good sample enough to do some modeling of the overall impacts,” he said.

Schutt was pleased with the report. He said it shows Native organizations’ sizable impact and commitment to the Interior and state. He said it also indicates that these organizations are growing.

He said the impact is especially strong in Fairbanks and that as the region has struggled with downsizing and high energy costs, the Native organizations are a source of good news and strength in the community.

Irene Catalone, CEO for the Interior Regional Housing Authority, agrees. She said that Native organizations provide a strong backbone for the Interior. One part of the study that particularly stuck out to her was that the Native organizations’ current employment numbers for the Interior matched those from the entire state several years ago. She said this shows their strong employment role, especially because these companies hire all Alaskans and not just Natives.

“I think that’s remarkable,” she said.

The report indicated a few notable points to Schutt as well. One such factor is the $3.5 million in statewide charitable contributions from Native organizations. $2.5 million of that was in Fairbanks. He said this is a significant amount when considering that the majority of the organizations are nonprofit. In comparison, he said companies like BP and ConocoPhillips annually give between $5 million and $7 million.

“That’s jut a glimpse of how we support education, social programs, other charitable giving, particularly here in the Interior,” he said.

Schutt said something that wasn’t in the report is that multiplier effects from direct spending that turns into indirect spending for the total economic impact is quite a bit less than major municipalities around the country. Fairbanks has a smaller multiplier than Anchorage and rural communities have almost none. Schutt said this is a policy point where data on more dollars staying in the communities can be helpful.

Schutt said this is the third such study to be done, however, comparing these results to the previous surveys’ is not exactly “apples to apples” because data from larger business presences like Arctic Slope Regional Corp., Chugach Alaska Corp. and Bristol Bay Native Corp. was gathered but not included in the report as in previous years.

“We asked them for that data. And we got a lot of responses this time and that time. The difference is what we’re reporting,” he said.

He said that although the data doesn’t offer a good basis for comparison, logic dictates that because Interior-based organizations are growing, their economic impact should be growing proportionately.

The reason behind the study is to give the Native corporations an idea of what they are doing for the Interior and the state. Schutt said most only have data on their own specific companies but not about the others. The data is used to help local legislators and chambers of commerce make decisions, as well as internal and shareholder use. He said legislators have previously cited the data.

“It’s a very useful tool for us,” he said

He gave an example of how legislators used Native corporation information when going to bat for them on the Frontier basins oil and gas tax credits.

“We want the general public to know the information. We certainly want influential policymakers to know the information,” he said.

11/08/2016 - 3:40pm