Dunleavy urges calm as a volatile economy and tourism warnings add to Alaska coronavirus anxiety

Alaska Chief Medical Officer Anne Zink talks to reporters at a press conference about the coronavirus on Monday, March 9, 2020, while Gov. Mike Dunleavy looks on in the background. (Joey Mendolia/Alaska Public Media)

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As the coronavirus continued to upend the global economy Monday in ways that threaten the stability of Alaska’s budget, the Permanent Fund and the tourism industry, Gov. Mike Dunleavy called a news conference to soothe Alaskans’ anxiety.

“I just want to reassure Alaskans that we’re on this,” he said to reporters gathered in his Anchorage office. “We’ve got this.”

Alaska still has no confirmed cases of the virus. The state reported that 32 people had been tested by Monday afternoon. Nine of the tests were pending, but the rest were negative.

In Washington state, the center of the epidemic in the U.S. and a hub for travelers heading to and from Alaska, officials confirmed 162 cases of the virus, including 22 deaths.

Across Alaska, businesses and local officials were making emergency plans. The Municipality of Anchorage partially activated its Emergency Operations Center, allowing staff to work longer hours and draw support from other agencies. The University of Alaska said it had formed an “incident team” to plan for outbreaks on its campuses, while the Anchorage School District began its emergency planning before spring break. Dunleavy also cancelled a series of community meetings to focus on the state’s response to the virus.

[Related: Arctic Winter Games in Whitehorse canceled over coronavirus concerns]

State health officials said they have loosened limits on who can be tested for the coronavirus, as their capacity to test ramps up. The state can now test as many as 500 people, up from 200 or fewer last week, health officials said.

Before Friday, the state was prioritizing tests for people in the hospital with an unexplained fever and “severe, acute lower respiratory illness,” like pneumonia. Now, that criteria has been broadened slightly to include any respiratory illness requiring hospitalization, not just pneumonia.

Louisa Castrodale, a state epidemiologist, said the change was “to really give providers a little more leeway in saying, ‘Yeah, this person’s sick, but they’re not in that really intensely severe category.'”

She stressed that sick patients who weren’t tested under the tighter criteria have still been followed by their healthcare providers.

“We definitely have providers who say, ‘My plan is to continue to have a conversation with this patient — and you might hear from me tomorrow,'” she said.

[Related: Follow our continuing coverage of the impacts of coronavirus in Alaska.]

One other thing that’s helping to stretch test supplies, Castrodale said, is new federal guidance allowing labs to mix together some of the multiple swabs it collects from each person. Previously those swabs had to be tested individually.

Meanwhile, politicians, economists and tourism officials were pondering what the coronavirus-related volatility in the national and global economy means for business and Alaska’s budget.

[Related: Federal warnings against cruise travel rattle Alaska travel industry]

Benchmark oil prices crashed some 20% Monday, which could erase hundreds of millions of dollars in state revenue unless that trend reverses.

Meanwhile, federal officials warned against traveling on cruise ships, which are a lynchpin of Southeast Alaska’s tourism economy. The cratering stock market has also stripped more than a billion dollars in value from the Alaska Permanent Fund, which pays for residents’ Permanent Fund dividends and part of the state budget.

If Monday’s drop in oil prices persists for the long-term, it could cost the state some $300 million in revenue. But Dunleavy said he has no immediate plans to change his budget proposal.

“I would say this is definitely a momentary bump in the road for Alaska. Our oil patch is in it for the long haul,” he said. “With regard to the stock market, I too believe that the underlying fundamentals of the U.S. economy is pretty strong.”

Not everyone is as optimistic. Mouhcine Guettabi, an economist at University of Alaska Anchorage, said he’s far less certain that the downturns will be temporary, pointing to the cancellation of classes at Ivy League schools as one example. At the University of Washington in hard-hit Seattle, meanwhile, classes are shut down until the end of the spring semester.

“I wish I could tell you, ‘Three months is the maximum amount of time we will be dealing with this,’ or, ‘It’s a two-year situation,'” he said. “I honestly don’t know.”

Guettabi noted that some 90% of the state’s revenue comes from oil and the Permanent Fund’s investments, and he said the state can’t hide from that.

“The thing that it exposes is just how vulnerable Alaska is,” he said. “Because it’s the perfect storm of sorts — there’s exposure, from a budgetary standpoint, to the two big sources of money.”

Alaska’s Energy Desk editor Julia O’Malley contributed to this story from Anchorage.

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