New economic group formed to work in Gov. Walker’s office

A new economic-planning group has been formed in Gov. Bill Walker’s office.

Two senior state economists, John Tichotsky and Ed King, have been transferred to the governor’s office from the Department of Revenue, where Tichotsky was chief economist, and the Department of Natural Resources, where King was a commercial analyst in the Division of Oil and Gas, an agency within DNR.

Tichotsky is based in Anchorage and King is in Juneau.

The group will work under Walker’s chief of staff, Jim Whitaker.

Three other people now in the governor’s office will be part of the team, Tichotsky said in an interview. They include Ryan Colgan, Ty Keltner and Barbara Blake, who is actually on Lt. Gov. Byron Mallot’s staff.

The governor’s office was unable to provide information on what Colgen, Keltner and Blake are doing in addition, or previously, to being involved with the economics team.

Tichotsky said the group will function informally as a team to focus on a number of broad long-range issues on economic development. “This grows out of the governor’s plan to ‘fix’ the state’s economy this year through the Permanent Fund Protection Act and then start ‘building’ the economy next year,” Tichotsky said.

There is obvious potential - “low-hanging fruit,” Tichotsky called it - in established industries like oil and gas, minerals and seafood, where near-term initiatives can be developed, as long as long-term possibilities, like agriculture.

Infrastructure will be another near-term initiative, he said.

Health care, where rising costs are a drag on the economy, is another area ripe for initiatives beyond efforts now underway, he said. Economic diversification is the overall goal, Tichotsky said.

Another example of how the governor is working to better harness state resources is the study now underway by a consulting group of merging aspects of the Alaska Housing Finance Corp., the Alaska Industrial Development and Export Authority and the Alaska Energy Authority, Tichotsky said.

The idea for a “think tank” within the governor’s office grew out of the administration’s initial work last spring on the Permanent Fund Protection Act, an initiative that was initially planned to convert the Fund into a sovereign wealth fund like that in Norway, Tichotsky said.

It was a bold vision, but a complex one, and the Legislature opted for a simplified version. The bill failed to pass the Legislature but may be considered again if a special session is held later this fall.

The planning work on the Permanent Fund Protection Act bill drew people together from several agencies, like Tichotsky from the revenue department.

There are always complications in working on special projects when people have other responsibilities, and now being transferred to the governor’s office has simplified those, Tichotsky said. For example, in the revenue department he had to use confidential data in his work as chief economist, and he always had to worry about potential conflicts in using data.

“Now I don’t have to worry about that because I only work with public data,” he said.

At the Division of Oil and Gas King’s work involved economic analysis of field operators’ plans of development and the agency’s work on royalty-in-kind decisions on oil and gas royalty sales, said Alex Nouvakhov, manager of DO&G’s commercial section.

In the governor’s office the new economics group will continue working on a sovereign wealth concept as well as other ways the state’s financial resources can be used more effectively to stimulate the economy, Tichotsky said.

“We want to learn why Singapore, a country without natural resources, is such an economic powerhouse, and also why resource-rich countries like Nigeria and Venezuela are failures,” he said.

- TIM BRADNER