State consultants recommend consolidating state corporations

This is one of many slides the Boston Consulting Group presented to the Senate Labor and Commerce Committee on Thursday, Feb. 9, 2017.
This is one of many slides the Boston Consulting Group presented to the Senate Labor and Commerce Committee on Thursday, Feb. 9, 2017.

Last August the state of Alaska hired consultants under an $800,000 contract to study opportunities for savings and consolidation in three state corporations: Alaska Industrial Development and Export Authority, the Alaska Energy Authority and the Alaska Housing Finance Corporation.

The corporations collectively manage over $3 billion in assets, according to the Alaska Dispatch News. Thursday the consultants’ presented their findings to the Senate Labor & Commerce Committee.

Nicole Bennett, a principal with Boston Consulting Group, explained the recommendations.

“We were asked the question of whether or not the three agencies could combine and consolidate into one. Ultimately our recommendation was for AIDEA to remain independent … but we did think there may be some opportunity for AHFC and AEA,” she said. 

The group believes that AHFC and AEA could benefit from closer collaboration on development efforts in rural Alaska. They also recommended that AIDEA be less subject to the influence of the Legislature.

“Today many of AIDEA’s projects actually come from the Legislature. We’d actually like to see them have a lot more insulation and be able to focus only on the projects that are going to have the highest return in terms of both jobs and economic development and financial return from the state,” stated Bennett.

Bennett mentioned statutory changes that would make AIDEA more independent, such as lengthening board member terms and eliminating legislative approval of large projects.

Administration Commissioner Sheldon Fisher said that the consultants’ final report will be available in the coming days.

Gov. Bill Walker signed an administrative order in March that led to the study.

Sign up for The Signal

Top Alaska stories delivered to your inbox every week

Site notifications
Update notification options
Subscribe to notifications