The Alaska/Nevada connection

A lot of people ask me what Alaska’s like, especially now. For my friends who know Nevada, I often say that, in fact, The Silver State and The Last Frontier are far more similar than you might think.

In fact, despite the different nature of it, they both have somewhat severe climates and it requires people who live there to be of a fiber who can tolerate it. Both of the states have relatively small populations (AK: 670,053 according to Census 2006 data, NV: 2,495,529) compared to other states (CA: 36,457,549 or TX: 23,507,783) and each have had cities within them named “fastest growing” in America at one time or another (Wasilla/Las Vegas-Henderson). Both are places that were admitted into the Union for their strategic and/or natural resources (Nevada during the Civil War for it’s rich metal and mineral reserves; Alaska during the Cold War for it’s strategic military context of Russia and Asian countries as well as it’s rich metal/mineral reserves and oil reserves.) And let’s not forget that it was Alaskan Sen. Frank Murkowski who really pushed the Yucca Mountain project through to Nevada.

But what makes Alaska and Nevada really similar is their … well, let’s call it socio-geography. They are both states that have basically two large cities, separated by great distances, and then vast amounts of rural and/or undeveloped land.  They are both places where natural resources (oil/mining), the military/government and tourism are the top industries in the state — and those industries have vast power. And until recently, they are both states that have been relatively marginalized in the national political arena. Likewise, they are both very much tied to their pop-culture personas and stereotypes. (Admit it, you want to ask me if I ever lived in an igloo. And my non-Nevada readers want to know if I live in a casino now.)

The two significant areas that I would say they diverge is in how the Native American populations are treated/marginalized and how the states handle getting revenue from their chief industries. And that’s where things get interesting.

So first of all, in Alaska there are no reservations (or casinos). Native Alaskans (which is the politically correct term, a conglomerate that encompasses many nations including Athabascans, Inuits, Yupiks, Tlingets and dozens more) and Eskimos officially came together and incorporated decades ago to pool their political power and make sure that they were not left as marginalized and powerless as many of the Native American nations still standing in the Lower 48. They have an actual corporation that manages their piece of oil revenues as well as managing the many good things they’ve been able to get for their combined peoples — such as an excellent Native hospital system (truly, it’s outstanding and everyone wishes they could go there). And they make sure to collectively lobby and (usually) win important political battles, such as the continued right to subsistence living according to their cultural traditions. I’m not saying that Native Alaskans are never marginalized or they get a completely fair shake (they got a pretty bad deal on oil revenues in hind-sight, for instance), but compared to the Natives of the Lower 48 — and in particular, the Western Shoshone and Paiutes of Nevada — Native Alaskans have significant political and social power in Alaska.

And what about the two states’ economies? Well, on the surface, they’re actually pretty similar in terms of the industries that drive them. But look at how different they are in revenue and tax structures! Alaska is enjoying an amazing windfall ($5-$9 billion budget surplus!) with the record-high oil prices because early on they set up a good system to tax the natural resources in the state — and credit has to be begrudgingly given to Gov. Palin for raising taxes on Big Oil as well. Obviously, it hasn’t stopped oil or mining companies from working in Alaska! By contrast, Nevada has done a terrible job of getting the revenue it deserves from mining in the state. Did you know that mining companies in Nevada do not pay any taxes on the minerals they take out of the ground? They only pay taxes on a percentage of royalties on minerals! It is a minuscule amount of tax revenue compared to the profits these companies are making! And guess what? Unlike the tourism economy, which is bad all over, the mining business is enjoying record profits right now! And their stake in Nevada’s economy is most likely going to remain quite lucrative (for them) for quite a long time. We are fools not to tax them! And for all those out there who say that they would leave if we did — just look at Alaska! Trust me, it won’t happen. We have deposits that can’t be found (at least in their size and relative ease of extraction) almost anywhere else in the country, in some cases the world. Trust me, those mining companies will ante up because they’ll still be making mad money in the end. It’s something to think about during the record deficits and cuts Nevada is facing in this next legislative session.

The question is, will Nevada’s socio-geographical clashes allow for such big thinking in terms of the tax structure? We all know we got stuck with Gov. W, Jr. because the Northern Nevada and rural stronghold in the state was still just strong enough to over-rule the Southern Nevada vote for Titus. But what a difference a few short years make. The balance of power is nearly sealed up in the South in terms of population (2 million, baby!) and eligible voters (if they actually get off their asses and vote). But will that just serve to further the divide between Nevada’s urban areas and the vast rural regions? Or is it time that they get with the program? For me, I feel like the rural voters who went lock-step with Gibby fucked our state over. While I don’t want to marginalize them, they’ve been doing a pretty good job of marginalizing my vote for some time. Maybe it’s time that we all get on the same page and do what’s right for ALL Nevadans. Let’s take a page from Alaska’s playbook: Palin, a Republican governor, RAISED taxes on the state’s most lucrative industry and it has done wonders for that state. Sounds like a good strategy to me.

One thought on “The Alaska/Nevada connection

  1. Alaska is a rentier state, Nevada is not. Basically Alaska takes money from oil company workers and shareholders and gives it to everyone else.

    That most likely would not work here.

    Sure they will pay the tax, but that means taking the money away from workers and shareholders and giving it to people who produce little value for the state. We would slow economic growth therby harming our ability to reduce poverty.

    Can you live with those trade-offs just so you can raise taxes on businesses operating in Nevada?

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