EDD cut by politics — Economic development agency loses state funding

By Naomi Klouda

Homer Tribune

Thanks to convoluted political maneuvering, an economic engine used to support small businesses on the Kenai Peninsula is due to expire at the end of June.

The Senate Finance Committee in the closing days of the legislative session could have extended the authorization for the Alaska Regional Development Organizations. Instead, its sunset was approved. ARDOR serves as the umbrella over 13 regional districts.

This includes the Kenai Peninsula Economic Development District. Its mission is to serve residents, “By enhancing their quality of life through responsible and sustainable regional economic and workforce development.”

“It will be business as usual, with our fingers crossed,” said Director John Torgerson. While the predicament is worrisome, it’s not going to shut the doors. The district receives $75,000 a year in federal funding and events such as the industrial forums are supported by the oil, gas and other industries.

Another $68,000 usually comes from the state Department of Commerce and Economic Development. But that check won’t be arriving this year.

“The state funding surely will be missed. We are a federal- and state-recognized district,” Torgerson said. “Primarily the board hasn’t weighed in on the state funding, but hopefully this week they will be discussing it.”

The KPEDD owns its own land and building at Mile 14.5 Kenai Spur Highway.

Rep. Paul Seaton told Torgerson that he will work to extend ARDORs at the beginning of the next session, since the bill is still alive. All the Senate has to do is remove its amendment. It has already passed, Seaton said, but an appropriation bill could include back-funding for this year.

The problem wasn’t that legislators disapproved or objected to the work of the districts. Torgerson sat in on testimony and found most of the questions aimed at the DCED to be about accountability. But its funding was doomed by another kind of political play. House colleagues of Seaton tried block the unconstitutional addition of a separate bill into legislation that would have extended the existence of the ARDORs. The Senate attempted to roll the language from SB 54 extending Seaton’s bill on the vessel limited-entry system for weathervane scallop and Korean hair crab into a House bill extending the ARDOR program, HB 71.

This move put HB 71 in violation of the constitutional requirement that legislation be limited to a single subject. The House voted to not concur with the Senate changes. Because the Senate did not rescind its action in adopting the version of the bill, which contained the additional subject, the bill did not pass this session, Seaton said. Meanwhile, Seaton’s bill passed.

Attempting to extend that controversial program by rolling it into the noncontroversial ARDORs bill caused the failure of the extension of ARDORS. The Kenai Economic District is one of the 12 affected, as is the Anchorage Economic Development Corporation.

Seaton expressed disappointment that political maneuvering in this way caused disruption to these organizations he feels do important work in their regions. For now, all 12 have sunset and await a new legislative session to seek a solution.

KPEDD supports businesses, typically those that are considered a cottage industry, by assisting with developing their business plans, preparing them for commercial loans, providing access to capital and providing technical support through its Business Incubator Program. It also hosts community town meetings and other forums. Its role is to help rural, underserved communities.

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Filed under economics, Legislature

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