The 2014 economic forecast for the Kenai Peninsula is in, and continued growth in the job market is what’s predicted. Speaking at a Kenai Chamber of Commerce luncheon Wednesday, state labor department economist Alyssa Shanks shared her predictions for the Peninsula for the year. We’re likely to see a little decrease in new jobs compared to last year, when we saw nearly five-percent growth, a fairly large spike over the past few years.
More oil and gas activity in Cook Inlet translated to lots of new jobs in that industry, but health care is growing quickly, too. Shanks says that’s because the Kenai is increasingly seen as a place to retire.
“It has been thought of, at least theoretically, as a draw for retirees, and to some degree we see that in the data," said Shanks. "The peninsula tends to have a larger older population than other places in the state.”
On a long list of jobs that saw growth last year, nearly every one was related to health care. But Shanks says there really isn’t enough data to be able to predict exactly what an influx of seniors might mean for the Borough’s economy. Seeing seniors flock to one particular part of the state is a relatively new phenomenon.
“It could really go either way. If you’re looking at a group that maybe doesn’t pay as much taxes and uses a lot of services, would that be a drain on the economy, would that kind of slow things down?" she asked. "But on the other hand, people tend to spend more in retirement…That’s a time in your life when you kind of think ‘alright, I’m going to spend it.”
The Borough’s unique tax structure for seniors also plays in here. When the Borough Assembly entertained an ordinance that would have put a cap on property tax exemptions for residents 65 and older, lots of those residents testified that a favorable tax scheme was what either kept them here, or helped them decide to move here.
“The Kenai has an interesting question in that they have a whole different set of taxes and things like that," she said. "I hate to say it complicates the picture, but instead of just saying ‘how much money are retired people going to spend and will the spend more’, you have to now calculate what their tax contributions change and what they’re utilizing. It would be a fascinating project.”
Oil and gas and health care jobs are fairly easy to track, and the effects of those industries are fairly easy to recognize. Fishing, though, is a different story. While there’s lots of information collected about the commercial industry, it’s not always put to use in analyzing the industry. And, Shanks says hunting down the story of sportfishing’s role in the economy is even more difficult.
“There’s a ton of data that we’d like to have. There has to be some kind of data out there, it’s just a matter of knowing who to go to and where to get it. And if it’s in an accessible format, what kind of history do we have so we can look at trends in that data.”
Shanks says one of the most interesting facts about the Kenai’s economy is how many dollars that contribute to it are generated somewhere else. A lot of people live here, but work, say on the North Slope, or with a mining outfit in some other part of the state.
“For several years now pretty consistently, the Kenai has brought in more income than it has let go out. The people who leave the Kenai to go and work somewhere else make more money and bring more money back, than people who take their wages (made here) and go home with them.”
Overall jobs growth has trended up the past three years, from 1.7 percent in 2011, to three percent in 2012 and peaking last year at nearly five percent. Shanks says her conservative prediction for 2014 is down a bit, to two percent, a slightly better rate than for the state as a whole.