$2.2 billion capital budget includes railroad, port projects

Photo/Courtes/ Patty Sullivan/Mat-Su Borough

On April 14, the last day of the legislative session, state lawmakers approved a $2.2 billion capital budget. The budget is a decrease in state funding of about $600 million versus the current year’s $2.8 billion capital budget.

In December, Gov. Sean Parnell unveiled his $1.8 billion proposal for the capital budget. At the time he said there was room for the Legislature to add some spending.

Between cuts to the capital budget and a slight decrease in the state’s operating budget, Parnell said the state has a “manageable fiscal plan,” during an April 15 press conference.

“We’ve lowered the band on state spending by something akin to $1.1 billion this year from the prior year,” he said.

The Legislature’s final budget came in Senate Bill 18.

Parnell still must sign off on the Legislature’s capital budget, and can veto items as he sees fit, so the current appropriations are not yet guaranteed.

Once finalized, money will become available July 1, at the start of the state’s fiscal year.

Roughly $1 billion of the capital budget is federal money, primarily appropriated for transportation projects through the Federal Highway Administration and the Federal Aviation Administration. More than 93 percent of the approximately $776 million allocated to airport improvement and surface transportation improvement work is federal money.

In the past, transportation industry officials have been critical of the state’s propensity to rely on federal money for capital transportation projects while federal budget cuts of some form appear to be looming.

Groups working on railroad projects received state funding in the capital budget, but not as much as either had hoped for. The Alaska Railroad Corp. can expect $19.1 million to go towards implementing Positive Train Control, or PTC, a federally required railroad safety program. The railroad had requested $35 million from the state to fund PTC work through 2015.

The money it did get will fund PTC benchmarks through 2014, railroad spokesman Tim Sullivan said, and prevent the corporation from having to lay off more employees in the foreseeable future.

In March, the railroad announced plans to cut 54 positions over 2013 because of cuts to its federal funding and an overall decline in business.

“We’re grateful for the support from the Legislature; we’re grateful for the support from the governor’s office,” Sullivan said. “Folks here are encouraged that we’re going to be able to move forward on this unfunded federal mandate.”

He added that the railroad will have go back to the Legislature to ask for more money in coming years.

Through 2013, Sullivan said the railroad will have spent $62.5 million of a total $150 million it will need to come up with before the end of 2015 to meet the PTC deadline.

The much-scrutinized 32-mile rail extension being constructed by the Matanuska-Susitna Borough from Houston to Port MacKenzie was appropriated $25 million for future work. The borough originally asked for $60 million this year. In March the borough announced that $88 million worth of construction had begun for the year. If fully funded in time, the project completion is expected sometime in 2016.

The borough’s Public Affairs Director Patty Sullivan said the legislature’s appropriation would go toward work on segment 5, as well as begin design and engineering, right of way acquisition, and track construction for segment 6, which is outside of Houston.

After getting $100 million in the fiscal 2013 capital budget to begin building new engineering buildings in Fairbanks and Anchorage, the University of Alaska will receive $30 million of the $100 million it asked for to complete the facilities in the fiscal 2014 budget.

University of Alaska spokeswoman Ann Ringstad said the money will allow for work to continue through the fall of 2014 and that the university is continuing to work with state officials on getting additional money to finish the projects.

The budget allocates $95 million towards continued studies and licensing for the proposed multi-billion dollar Susitna-Watana dam.

Smaller renewable energy projects in the state will get $25 million of a possible $50 million that could have been allocated under state statutes for the Alaska Energy Authority’s Renewable Energy Fund.

The state Village Safe Water program received $51.5 million. Of that, nearly $31 million will be dedicated to new projects.

Seward will get $10 million for construction of a harbor to act as a “home port” for large fishing vessels. Other port projects in the Legislature’s budget include $1.5 million for the Port of Skagway’s Gateway Project, and $500,000 for upgrades at the Nome port.

Elwood Brehmer can be reached at [email protected]. Journal reporter Tim Bradner contributed to this story.

04/18/2013 - 11:32am