Juneau: hit by recession: but holding its own.

• Author: Bohi, Heidi
• Position: TOWNS IN TRANSITION

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No disrespect to one of Alaska's most well-known legends, but it's probably a good thing that Joe Juneau is not the one at the helm of the state's capital city during the country's biggest economic crisis since the Great Depression. If history is any indication, he would probably be trying to buy his way out of the mess, or be sipping hoochinoo, as he was known to do--referred to in the 1800s as alcoholic brew--and just hoping that everything would somehow work itself out.

Instead, the city of Juneau--known for its residents being educated, opinionated and involved--led by Mayor Bruce Botelho during his fourth term, is doing what it has always done when things get a little dicey: being thankful for the incredible growth it has typically known since being founded in 1906, while preparing for this national phenomena that will undoubtedly take its toll on this city of about 31,000.

As has characteristically been the case with Alaska, today, too, economists say that the state is more insulated from recent economic shifts and the devastating consequences of the economic crisis. And the depression of 2008 is likely to take longer to ripple through Alaska. Still, while the Lower 48 states are watching thousands of homes go into foreclosure and unemployment rates skyrocket nationwide, effects of this downturn are already being felt in Juneau and city and borough leaders are taking cover.

RECESSION HITS JUNEAU

"It appears the recession is now starting to impact our financial operations," says Rod Swope, city and borough manager, adding that starting in FY10 and through the next few years, Juneau is anticipating significant impacts in its major revenue sources. Nearly 80 percent of general governmental operations rely on funding from property assessments and taxation, sales tax and central treasury investment earnings, which are all being impacted by the economic recession. To avoid facing major deficits, he says, Juneau is reducing spending now so it will be prepared for revenue sources being flat or down in the next few years.

TOURISM WOES

Tourism is the first big hit Juneau is preparing to take. The area's single-largest and steadiest area of growth is the cruise ship industry. During the four-month summer visitor industry season more than 1.3 million passengers get off the ships for up to an 11-hour port of call visit to spend money on day trips, and in shops, stores and restaurants. With an anticipated 10 percent cut to...