Lawmakers hustle for state share
JUNEAU - State administration officials and legislators are hustling to stay abreast of a federal stimulus package that is evolving fast in Congress, and which could bring to Alaska an additional $800 million to $1 billion in federal funds.
Gov. Sarah Palin had asked for a much smaller portion of federal funds for Alaska, but the state’s congressional delegation is working to get a larger share.
Part of the new federal money would be for basic bricks-and-mortar infrastructure, part for an expanded social safety network, such as extended unemployment insurance and Medicaid health insurance coverage, and part to beef up education funding from elementary through the university levels.
Lawmakers in Juneau welcome the federal money as a one-shot chance to catch up on a list of bridge, road and public building construction and major maintenance projects, as well as rural school projects that have been deferred for years.
The stimulus money would also supplement what is likely to be a bare-bones state capital budget for next year, the result of low state oil revenues.
However, some lawmakers worry about any strings attached to the federal largesse in requirements for states to sustain expanded programs on their own dimes.
"The criticism I’m hearing is that that there will be programs created that we won’t be able to get rid of," said Rep. Les Gara, D-Anchorage, in a House Finance Committee hearing Feb. 3 hearing.
John Katz, the state’s representative in Washington, D.C., told the House committee there are huge unknowns about the federal package - sharply differing House and Senate versions must be reconciled - but that it is likely that states will get stuck with some of the tab in paying for programs in years ahead.
"Congress is creating an expanded social safety net and there may be requirements that some enhancements be continued, and the federal dollars may not be there in the future," Katz told the House committee.
There are also concerns about whether Alaskans can mobilize projects quickly enough, given seasonal constraints on construction, to meet strict timing requirements for projects to be underway. Katz said President Barack Obama wants "shovel ready" projects and that deadlines in the pending congressional bills range from 90 days to 120 days.
Palin and the state’s congressional delegation are working to push that to 180 days, but what’s more important is to define what the deadline means, Katz said.
"There are now two interpretations of this, one that the deadline apply to funds being obligated to projects and a second in that contracts be actually awarded," Katz said. "The state Department of Transportation and Public Facilities tells us that the latter could be very difficult, so we’re putting our efforts into having the deadline refer to funds being obligated to projects."
In any event the state DOT is gearing up to get projects out quickly and the agency is aware of the potential federal requirements, Katz said.
One clear requirement is that projects must have cleared environmental hurdles. So no large projects requiring new federal environmental impact statements will make the cut.
What’s also clear now is that the stimulus project will have no earmarks, or specific projects, designated in the legislation, Katz said. The money will instead be channeled into existing federal programs that provide money to states, such as federal surface transportation and airport aid programs.
State administration officials and legislators will have to sort out where Alaska’s share of the money goes in terms of projects, Katz said. For surface transportation projects, like highways and bridges, the existing State Transportation Improvement Plan, or STIP, will be followed.
For school construction, a priority list of needed new school construction and major maintenance projects maintained by the state Department of Education will be a guide. A concern is whether school projects now on the list will meet federal requirements that may be attached to the money.
Randy Ruaro, the governor’s deputy chief of staff, said the state will have to be creative in getting some of the stimulus money to needed harbor projects in coastal communities.
"There is no federal program for harbors. Perhaps we can use some of the provisions that will apply to public transit to do this," Ruaro told the House committee.
Katz said the stimulus package would also have provisions for grants, which will be a way to channel money directly to municipalities.
Alaska communities are being asked to send lists of desired projects directly to the state’s congressional offices, Katz said, but these will be used in next year’s regular federal programs rather than in the stimulus package.
Rep. Anna Fairclough, R-Anchorage, a member of the Finance Committee, asked Katz whether there could be funding for renewable energy.
"There is a lot of emphasis on renewable energy in the legislation and that is one of President Obama’s goals," Katz said. "It’s likely that a lot of this funding will go through the U.S. Department of Energy. The president also wants research on renewable energy."
Rep. Bill Thomas, R-Haines, also a member of the Finance Committee, asked Katz if local-hire goals might be swept aside in the rush to get projects out, particularly in rural areas.
"I see a lot of examples where a contractor brings in 22 people from out of town and hires maybe five from the local community, or puts a camp five miles out of town so there’s no economic benefit," Thomas said.
Katz said federal programs have requirements for percentages of contracts and business to go to disadvantaged people, a category in which some rural residents might fit.
There are some legislators, as well as senators and members of Congress, who worry about the long-term financial consequences of the stimulus package or whether it is really needed.
"We’re still debating here in the Legislature whether the package is good or bad, particularly in piling up more federal debt and possibly devaluing our currency. Has the train left the station? It is too late to rethink this?" Fairclough asked Katz.
"I’m afraid the train has left the station," Katz said. "There is a minority in Congress who disagree but there’s a majority that believe some form of economic stimulus is needed. The debate is over its proper balance between infrastructure, tax relief and programs."