ABSTRACT

Perhaps the greatest deterrent to using the Anchorage consumer price index to approximate the rate of inflation in Fairbanks during the pipeline construction period is that Anchorage had a type of pipeline impact different from that which Fairbanks experienced. Despite inflation and other factors contributing to higher costs in Fairbanks, the pipeline construction project brought to Fairbanks some monetary gains. Inflation is a general theme which runs throughout the cost column. To the consumer, inflation means reduced purchasing power of the dollar. Local government not only experienced increased revenues, but also increased demand for services. The structure of the economy and the procedures for collecting taxes caused the demand for services to precede the increased flow of revenues. Due to the political climate, increased sources of local revenue, and the availability of impact funds, local governments in the Fairbanks area attempted to refrain from raising the mill rate by avoiding the introduction of new services.