Industry groups oppose head tax for cruise ship

JUNEAU -- The Alaska Travel Industry Association announced Jan. 22 it will oppose Gov. Tony Knowles' proposal for a $30-per-passenger cruise ship tax.

A spokesman said it's been the long-standing position of the visitor industry that targeted industry taxes are not the solution to Alaska's deficit between income and spending.

"We realize the time is approaching where new revenue sources, including statewide taxes, might be considered to reduce the state's budget deficit," said association chairman Dale Fox. "When the Legislature agrees that the time has come, that revenue source must be broad-based, and not imposed upon a single entity or industry."

According to the association, a 1996 survey showed that industry businesses pay nearly $124 million in taxes and fees.

Association President Tina Lindgren said tourism already is facing a difficult year. The association in December asked the Legislature for $12.5 million for emergency marketing to cope with cancelations made in the wake of the Sept. 11 terrorism attacks and Lower 48 recession.

"This is not the time to impose an additional $30 per person to visit our state," she said.

The Alaska State Chamber of Commerce also voiced its opposition to the tax proposal.

Funds lose $26 million in Enron Corp. collapse

ANCHORAGE -- Three big Alaska public funds lost a total of about $26 million in recent months from the collapse of energy company Enron Corp.

The Alaska Permanent Fund lost $12.8 million. And the state's two biggest pension funds, the Alaska Public Employees Retirement System and the Teacher Retirement System, together lost about $13 million, officials said.

Bob Storer, executive director of the Alaska Permanent Fund Corp., said the state will join a lawsuit to recover a portion of its losses, claiming Houston-based Enron withheld information about its financial position.

The stock price of Enron soared in recent years as investors were dazzled by the results of the company's new-styled energy trading business.

The stock was worth about $82 a share one year ago. Then it began a gradual decline. As word spread about hidden debt and mounting losses, the stock went into a tailspin, falling below $1 a share in December as the company sought bankruptcy protection.

Last year's Enron losses amount to a pittance to the permanent fund, which owns stock in 4,000 companies, said spokesman Jim Kelly. But the Enron losses translate to about $2 lost to permanent fund dividend checks, he said. Retirement plan officials said retirees would be unaffected by Enron's demise.

Park railroad project could begin this summer

FAIRBANKS -- Preliminary work on a railroad into the north end of Denali National Park and Preserve could begin as early as this summer.

The Legislature passed a law last year that transfers 3,500 acres of state land to the Denali Borough to build a railroad. Gov. Tony Knowles vetoed the measure, but on Jan. 16 the Legislature overrode that veto.

The law names Kantishna Holdings of Fairbanks as the developer of the project. Company president Joe Fields told KUAC of Fairbanks he plans to finance the project by selling shares in his company.

Opponents, however, said they want to see an environmental impact statement on the railroad proposal.

There has been no input from local residents, said Linda Paganelli, who works for the Northern Environmental Center and lives near the proposed route.

The project still must be approved by the National Park Service. So far, the agency has not endorsed any access at the northern end of Denali.

NATION

Durable-goods factory orders rise 2 percent

WASHINGTON -- Orders to U.S. factories for costly goods rose a bigger-than-expected 2 percent in December while a key gauge of consumer confidence improved in January for a second straight month. The reports suggested better days may be ahead for the battered economy.

The New York-based Conference Board reported Jan 29 that its Consumer Confidence Index rose to 97.3 in January. The surprisingly strong gain followed an increase in December to 94.6.

The increase was propelled by sentiment that the business outlook and job prospects were going to get better.

"While the economy has not turned around yet, the worst may well be over," said Conference Board research director Lynn Franco.

The Commerce Department said the December rebound in orders for durable goods, items expected to last at least three years, followed a steep 6 percent decline in November.

The gain in orders was better than the 1.5 percent increase many analysts had been expecting.

The Jan. 22 report and other recent data suggest the recession in the manufacturing sector may be bottoming out, economists say.

WORLD

Japan's unemployment rate tops 5.6 percent

TOKYO -- Japan's unemployment rate edged up to 5.6 percent in December, the fourth straight month of record high joblessness in this recession-ridden nation. Many fear it could get worse.

For more than a decade, Japan has been fighting a slowdown and struggling to shift from an economy reliant on manufacturing and construction for growth to a more industrialized, service-oriented economy.

The rekindling of Japan's giant economy and its importance to a U.S. recovery will be high on the agenda of President Bush when he makes his first presidential visit to Japan on Feb. 17-19, the U.S. ambassador to Japan, Howard H. Baker, told reporters Jan 22.

"A strong Japanese economy is in the United States' national interest and important for the health of the entire world," Baker said.

Analysts, however, say things are likely to worsen as companies collapse or resort to drastic job cuts in the face of the global slowdown.

"The stage is set now for unemployment to really start rising. It's just beginning," said Mamoru Yamazaki, chief economist at Barclays Capital Japan in Tokyo.

-- Compiled from business wire services.