Two economists presented their findings to the Senate Finance Committee last week following a series of reports about the failures of the Alaska Industrial Development and Export Authority, or AIDEA.
Gregg Erickson, owner and principal of Erickson and Associates, an economic consulting firm and one author of the reports, says the benefits of AIDEA have been far less than was presented to the public and even to the legislature.
“From 1981 through 2023, AIDEA received 849 million dollars in State money and sent back 557 million so it’s a net loss to the State Treasury anyhow. That’s a 66 percent return of State capital and a zero percent return on State capital.”
Milt Barker, co-author of the reports, and Erickson dispute AIDEA’s job reports. Those reports show only about 200 of the 3,200 jobs AIDEA claimed were actually created by their loan programs.
AIDEA Executive Director Randy Ruaro (Roo-ARE-oh) says the numbers the economists presented are incomplete. He refuted the claims that AIDEA has not created jobs and that the Loan Participation Program, or LPP, was not an effective use of funding.
“We have LPP loans in every Senate district in the State and a lot of times I believe our loans are what makes the difference for those small businesses.”
Ruaro’s presentation shows 23.6 million dollars financed through the LPP program in fiscal year 23. There were more than 387 million dollars in outstanding loans at the end of fiscal year 23. Ten loans were financed with that funding. AIDEA claims 278 construction jobs and 218 permanent jobs were created in fiscal year 23.
Ruaro says that AIDEA is now working to enter the energy sector to leverage the significant federal financing available. Of particular interest to railbelt communities, AIDEA is working to finance a Cook Inlet natural gas project. However, the details of that deal are confidential.
Several Senators requested additional financial reports and other documentation to review over the summer. AIDEA has hired a consultant to provide a third-party review of the organization’s finances and community impacts. That report is expected to be presented to the Senate Finance Committee in February or March 2025.
