DR. KEN OSTERKAMP: Okay. I'll stand back a little bit. I know it's early. Did anybody happen to get a chance to read the paper this morning? The section on the fact that men are twice as likely to use sarcasm as women in front of strangers? Yeah, whatever.

I think a lot of you are familiar with 20/20 so I'm going to just quickly go over the mission and history of the organization and then get right into the progress report. And what I'd like to do is just take you on a brief tour through a measure from each of the five sections that illustrates some of the key points of the document.

20/20's mission is a three part mission. We educate, we engage, and we elevate as you can see on the inside front cover of the progress report. We educate Alaskans about social, economic, and environmental issues. And then what we're trying to do starting this year is to engage them or more accurately re-engage them since our initial public outreach over the last few years was targeted at creating this document. Now we'd like to engage Alaskans in discussing some of the priorities between the various objectives outlined in the document. So this civic engagement effort will be kicking off a little later this year in partnership with some other public policy organizations in Alaska such as the Alaska Health Care Roundtable that Duane Heyman runs and the University of Alaska as well.

So the elevation part is about getting Alaskans' priorities in front of public policy decision-makers. And that's really the loop that we're trying to close as an organization to have a meaningful debate about where our priorities should lie based on the facts and to get those public preferences in front of the people who can then translate them into public policy. So that's us.

Before I get into the measures themselves I'd like to thank our sponsors, the Alaska Humanities Forum, BP, ConocoPhillips, Wells Fargo and the Denali Commission were our major sponsors this last year. And it's through their contributions that we were able to produce this report. Also the Alaska Conservation Foundation, the Anchorage Daily News, and Information Insights provided in-kind donations as well.

This document -- and I'm going to skip over the history of 20/20, there's a whole page on it in there if you're interested. I'd like to get straight into the measures here. The heart of this effort is this group of 49 measures of progress in Alaska. And we start out, we divide these, if you look at the table of contents at the very beginning, we divided them into five major topic areas: education, economy, environment, communities and government. Within each of those topic areas we have five objectives which are value statements that came out of the 20/20 process that involved thousands of Alaskans from all over the state. We had over 100 meetings statewide and a couple of fairly large conferences, some public opinion surveys including what I think is one of the best public opinion surveys ever done of Alaska Natives, 500 households. And all of those informed these italicized statements under each of the major topic areas as public objectives that we share in common as Alaskans.

And then we go into the 49 measures from there. And each of the measures has usually more than one indicator that we're looking at, but we choose one that's a primary or a key performance indicator that we chart each one of the measures.

Starting off with the general measures on page 1, we have two general measures, demographics and disparities. These are not under the other five sections. They are our primary leading indicator and our primary lagging indicator. And I'll explain what I mean by those. Demographics, the quality and quantity of the population of Alaska drives almost every other measure in this document. As the population ages you'll see more demand for health care. If you have more 18 to 24 year old males the crime rate is going to go up. That's just how it is, guys, sorry, I'm not trying to ding you. But the demographic makeup of Alaska is driving a lot of these measures to a large extent, so we put that in there as number one, something to keep our eye on on this dashboard to predict future trends in the other measures.

The second measure there, disparities, is our primary lagging indicator. And what I mean by that is that that is the final measure of a society's fairness and equity, are we bringing all Alaskans along with us as we're progressing. And the degree to which we can minimize disparities in the state is, I think, the final measure of our success. Disparities can be seen in a number of different areas in Alaska; economic, educational. We chose education here because education is such a foundation for -- a strong foundation for all the other things in life that people are striving for. Education is the single best predictor of income. It allows you to live a much fuller life. I don't think I have to argue the case for education in front of an audience that includes Carol Comeau certainly.

But education, we measure here -- we use it as a measure here of disparities looking at the percentage of tenth graders who failed the high school qualification exam. That exam, you can see by looking at this chart, is failed much more often by various subgroups: disabled, limited English, Alaska Native and minorities than it is by, for example, white tenth graders. So looking at this we can see we have some ground to cover as a state in terms of bringing all of our minority populations and special populations up to the level that white students enjoy. And we're not specifying how we need to do that, we're simply showing the data so that people can have a meaningful debate when they're talking about whether we are succeeding as a state.

On the other hand, I should mention that if you look at the economics, there was a recent article in Alaska Economic Trends, an excellent monthly publication from the Alaska Department of Labor, that talked about something called the genie coefficient which was written up in the paper recently as well. The genie coefficient is a measure of the disparity in wealth, how it's distributed through a population. And Alaska as it turns out has the most even distribution of wealth of all 50 states which was a surprise to a lot of people. It turns out we have more dual income households, more middle age strong earning families, that type of things. So there's kind of an interesting confluence of socio-economic characteristics that make Alaska that way. But we do have the most equitable distribution of wealth in the nation and that's something to be proud of.

Moving straight into the five topic areas, education is our first topic area for the reasons I've already described. We think it's the fundamental building block of a healthy society. You need everything, but you need to start with education. In education we distributed the measures in a fairly straight forward timeline that education usually follows from pre-kindergarten all the way through higher education. We looked at our children entering school ready to learn which a lot of people don't realize Alaska assesses all incoming kindergartners and first graders as to their ability to learn in the classroom.

The measure I'd like to talk about today is number 6, schools. This illustrates a number of the challenges that we faced in putting together this progress report. Schools. And we're talking about kindergarten, K through 12 here. One measure that we chose from schools came from something called the Alaska Youth Risk Behavior Survey. The Youth Risk Behavior Survey is a survey that is done nationwide in all 50 states that looks at a number of different elements of what constitutes risky behavior for teens. This survey, notice looking at the chart that the data only exists for Alaska in 1995 and 2003 and it exists for the rest of the country steadily during odd years. They do it every other year since 1993. What makes this interesting is this is one of the challenges we face in collecting data.

The YRBS, the Youth Risk Behavior Survey, used to be implied consent meaning that you could go and do the survey in a school of the children in the school without getting explicit consent from the parents. That was changed, I think in 1999, is that right, Carol?

CAROL COMEAU: Yes.

DR. OSTERKAMP: Where the law was changed by the State Legislature to explicit consent where you had to go out and get parents to return permission slips for their children to be involved in the survey. And the school districts in Alaska have attempted since that law was passed to get those permission slips returned really without success. They go through a lot of effort to do that, put a lot of resources, have pizza parties and things like that for people to try to get 100 percent return rates on the permission slips, not necessarily signed yes, they could be signed no. Just getting them back, but parents are so overwhelmed these days that evidently they just don't have the time to deal with yet another obscure permission slip for some survey they probably have never heard of.

But this illustrates tension between some private -- between the right to privacy in the home which was the reason cited by the legislators who introduced and passed the law, and the need of public institutions like schools to deal with these kids who are in their trust five days a week for so much of the year. So that's one of the interesting things about this indicator is that we're looking -- we're asking schools to do something and not providing them with a tool that they need to do it. That may be appropriate that we're not doing that, but it's a discussion that probably needs to be revisited since it was 1999 when we last talked about it, so that's the school indicator. Feel free to ask questions, by the way, as we go through these on any of the indicators that are in these sections.

The economic indicator I'd like to talk about is number 10, income, which is one of everybody's favorites. The economic indicators, by the way, are divided into three objectives; one from the worker perspective, one from the business perspective, and then one from the sustainability perspective. The sustainability perspective, it will come as no surprise to most of the people in this room, contains two measures; one of the amount of federal funding we get per capita in Alaska, and the other of the importance of the oil industry. We are kind of a two dimensional economy in a lot of ways although that's becoming less true every year.

But number 10, income. If you look at per capita personal income in Alaska you can see that it used to be considerably higher than the national average and it's now pretty much the same. And that's been something that people have been tracking for quite some time. Most of personal income comes from wages, from your job. Some of it comes from transfer payments. Some of it comes from dividends, things like that, but we are much more like the rest of the country in terms of the average personal income, per capita personal income in Alaska.

CARLA BEAM: To get a real understanding of the impact of that, how does that compare -- how do we compare with the rest of the country in terms of cost of living?

DR. OSTERKAMP: We do have a cost of -- well, we have a cost of business and a cost of government indicator. Cost of living used to be a lot higher. It's not nearly as high these days. I don't know what our specific rank is, but I think we look a lot more like the rest of the country these days. So I couldn't give you a number, but it used to be a wide gap just like the per capita personal income and it's now much closer.

GRETA GOTO: Ken, the statewide, not the.....

DR. OSTERKAMP: Statewide, that's correct. And that's -- thanks, Greta. She segued right into the point I'd like to bring up about this measure.

Per capita personal income, we used to break it out by urban and rural. We used to, being in the one prior addition we had of this progress report. But that seemed to cause a lot of confusion. People would look at it and the per capita personal income figure for Anchorage, for example, or any urban area in Alaska is still considerably higher than the national average, but the per capita personal income for rural Alaska is much lower.

Now we had people who would look at that and say well, that's just a shame, we need to get the rural average up closer to the national average, but that's not comparing apples and oranges. We have our own challenges in rural Alaska as, again, I think most of you know, but really to compare apples to apples you would have to break out the rest of the nation by urban and rural. And I see that a lot. It seems almost weekly in the paper people talk about urban versus rural averages in some particular critical indicator versus the national average. But you need to always keep in mind that the national averages includes both urban and rural, so you have to break both of them out to get a really meaningful comparison.

That said, there are as Greta mentioned, if you look at per capita personal income in rural Alaska it is much lower than this line that you see here.

Any questions on personal income? The next section is the big section of the document, communities. It includes crime, public safety, we call it, health, and then some other general livability indicators which was kind of a collection of indicators that maybe didn't fit other places, but we thought were important enough to include as measures of progress.

Looking at -- the one I'd like to pull out of this is the access to health care indicator which is number 31. Access to health care is -- if I had to pick one personally, one of these measures that reflects the most critical group of issues facing -- or challenges facing Alaska in the future that would be the one that I would choose. Health care is a huge issue for both people who have to purchase health insurance and for businesses who have to co-pay or provide it for their workers. It fits on both side of the equations because we also generate a lot of jobs in the health care industry. It's been one of the fastest growing industries in Alaska for a number of years now. So health care cuts both ways.

The interesting thing about this particular chart if you look at the percentage of Alaskans without health insurance, is that we still do worse than the nation on average even though 200,000 of the 600 odd thousand Alaskans are covered by federal programs. So I imagine that that's a much higher percentage of our state's population that are federal beneficiaries. And if you control for that we would look considerably worse.

Access to health care is interesting from another perspective which is that it like a lot of these measures, if you want to measure progress on access to health care you need to break that down a little further into specific indicators. And we have three that we look at here. It's kind of a three- legged stool. You need to be able to pay for health care in order to get it in a timely fashion, but you also need a facility to go to, and you need a competent, medical professional there when you arrive. So the professionals, the facilities and the ability to pay are all related and you need them all to make up a good health care system in the state.

As you can see from reading the text, health professionals are an issue in Alaska. We have a lot of some types of health professionals and not enough of others. And we measure this by looking at something called a health professional shortage area. Health professional shortage areas are tracked by the federal government and you can use those as good indicator of whether we're providing enough health staff in Alaska.

MS. BEAM: I'm just curious to know what was going on 1993 through'96 when we were actually below the national average?

DR. OSTERKAMP: I suspect the economy would be the primary reason. Probably more people had jobs. That was a strong time in the economy nationally. Alaska doesn't typically follow national trends, but that would be my bet. We were starting to recover from '87 at that point and things were going pretty strong up here. Also we did have, I think, in the late '90s an outflow of probably federal beneficiaries which is why that spikes up. I think we lost some military personnel in those years and probably some other federal personnel as well. So that's -- any questions on access to health care?

The next section -- I'm sorry, I skipped over a section which is the environment. I had my index tabs mixed up here. If you go back and look at the environment section, the environment section was a bit of a challenge, frankly. We don't have good data on lot of environmental indicators, so we use a lot of proxies here where you'll look at something, some measure of the environment like wilderness. And you'll see that we're measuring the number of people predicted to visit national parks. Well, that's a proxy indicator. It's a good one. We don't track it on a regular basis, but it's still a solid indicator of impact because impact is directly related to use for any wilderness area.

We divided the environment section into three parts: preservation, conservation, and quality. And the idea is that you want to preserve areas like wilderness and things like bio- diversity because of their intrinsic importance. You want to conserve the things that you're using, energy being a notable indicator of that, and you want to concentrate on quality for things like air, water and land.

The measure I'd like to look at right now is number 27, waste, that should be waste management I guess. Waste is an interesting indicator from the perspective that if you go to the Alaska state website they have a program called Missions and Measures which most of you have probably heard of. And Missions and Measures is like Alaska 20/20 in that it attempts to attach performance measures to all state departments and agencies, but they're a little different in the way that they do it. They're more of a results based budgeting approach if you're familiar with that looking at the bang for your buck, so to speak.

So if you go to the Governor's website and you click on the OMB link it'll give you a list of all state departments, agencies, and divisions. And when you click on them it'll give you their performance measures that they think are the most important for the public funds that they're spending, the (indiscernible - background coughing) objectives that they're tasked to achieve. If you go to the Division of Solid Waste and you click on their heading and go to their measures, Missions and Measures, you'll see that they measure the percentage of class one and class two landfills across Alaska that are properly permitted, sited and operating. And that sounds good because you see the bar looks like 96 percent of these class one and class two landfills that are properly sited and operating. That looks good.

However, Alaska -- they're missing a critical piece of information there which is the status of class three landfills. A lot of people aren't familiar with class three landfills because they don't exist anywhere else in the country. They're a special designation only for Alaska. And I think 180 out of our roughly 280 landfills in Alaska are class three. The reason for that is we have so many communities off the road network so they have to manage their waste within these small communities. And these communities are facing other challenges, mostly environmental. They have permafrost. They have transportation difficulties as well. So class three landfills are a big issue in Alaska and they aren't tracked at all in the Missions and Measures website. So we try to call that out, these critical indicators that we think are missing that people aren't paying enough attention to. And we do that frequently in the Alaska 20/20 notes section at the end of the measure. So.....

Another interesting thing about that, if you go to the Division of Solid Waste website they have some information about solid waste generation in Alaska. And you click on that and it like goes to the EPA and they have a link-up for the same thing. You click on that and it goes back to the Division of Solid Waste, so there's a little bit of circular logic at work there.

I should note that the person who is spearheading Missions and Measures is Cheryl Frasca who is the OMB chief. And she is really driving the Missions and Measures initiative at the state level. She's very good with indicators. She's the one who started the Investing in Results program here in Anchorage when she was with the Muni. And so we have been working with her as much as her schedule allows. She's a very busy person, but I expect that those Missions and Measures will get better. I simply call them out to show that there are different ways of measuring progress. And the reason that we are an independent organization is we take our direction from Alaska, from Alaskan citizens, versus being an organ of state government or a private sector organization. Any questions on the waste indicator?

The final section, I guess I've covered education, economy, environment, and communities, the final section is government. Government is endlessly fascinating to most Alaskans whether you love it or hate it. There's not a lot of people in between. As a statewide quality of life measurement organization, 20/20 is different from other states that have completed this process. And there's only about three or four other states that have gone through this comprehensive process to come up with citizen drive measures of the quality of life. Oregon, Maine and Minnesota would be the three notable ones.

They don't measure or measure very much the performance of government. Oregon because they're part of state government, they're part of the governor's office. And Maine and Minnesota measure a few things like voter turnout, but they don't have a co-equal section devoted to government like they do to education or the economy.

We do. We think it's a important to measure the performance of government and the use of public funds because government is one of the primary actors if not the primary actor in attacking a lot of these social problems and using our resources in the form of property taxes or oil royalties from publicly owned resources. So we felt it was important to include government in here.

We look at the management of government, whether it's effective, whether it's efficient, the difference being effective is doing the right thing and efficient is doing the thing right. We include the Missions and Measures as a specific measure in here, cost of government. A lot of different things in here. This is probably the densest section of the report, but it pays close reading I think.

The indicator I'd like to talk about is number 47, balanced budget. Alaska does not do a very good job of balancing our budget. We haven't for some time. And to simplify, we essentially cover this imbalance by taking money out of our state savings account, the Constitutional Budget Reserve fund. And there's going to come a day when there's no money left in that account.

So you've all heard of a fiscal gap. It's been front and center in Alaskan politics some years and not talked about at all other years. The problem with the fiscal gap is it's a very real and structural issue. It's resulted and probably held back our bond rating most years as a state, but the problem is that we keep dodging that particular bullet. It's not exactly a problem, but it's a problem in that we're not addressing the long-term need to do so. So the time is going to come, maybe not for us, but maybe for you folks at the end of the table you might want to start paying a little more attention to that particular measure because I suspect that you're going to be the ones who are going to be paying for it.

The budget is by definition a priorities document. If you look at the budget and you look at what percentage of the budget goes to what areas of public policy: education, transportation, public safety, that tells you where as a state we think we need to put the most resources. And by definition we're making hard choices there about what we think is important for Alaska. Hence, the very public and nasty fights you hear all the time which we think are great. They're part of democracy and the inherent part of democracy, the conversation that needs to happen between public officials and the public.

But if you look at this document, the progress report, you'll see 49 measures that no one is probably going to argue with. We don't make those priorities decisions in this document. This document is meant to inform that discussion. There are a lot of different, legitimate ideological perspectives out there, whether you're a Republican or a Democrat or something else, but to have a meaningful conversation you need to at least agree on the facts at the start of your conversation or your debate. And that's what this document attempts to provide.

No one's going to say I want fewer high school graduates, I want less personal income, I want us to be less wealthy and run larger budget deficits. These are not really contentious measures of progress in Alaska. The contention will arise when you talk about where you want to put public funds. Do you want to pursue better unemployment benefits? Do you want to fully fund pension benefits? Do you want to put more money into rural Alaska? Do you want to attack this social problem or that social problem because there's a trade- off as any economist will tell you, once unlimited resources are limited. That's why Neal Fried is the dismal scientist, but he does a pretty good job of making it better than that.

So, anyway, I'll go ahead and close on that and open up the floor for questions. That's our document. It's meant to be an annual publication so everybody can keep their eye on progress over the long term. Most of the indicators are not going to change a lot year to year, but we feel it's important for Alaskans to have the latest data on these various measures and to have a chance to talk to -- speak truth to power in terms of what public objectives should be on a fairly regular basis. And that's what we do.