State appropriations falling short of grant match requirements is risking $600 million in federal dollars slated to pay for transportation projects in Alaska.
That’s according to Alaska Department of Transportation (AKDOT) Deputy Commissioner Katherine Keith. She said Wednesday the department isn’t anticipating construction delays for now and is moving forward with the second amendment to its Statewide Transportation Improvement Program (STIP).
But staying on schedule depends on finding the money to meet the grant match obligations.
“We are not cancelling projects. We are not slowing down at all. We are working assuming we’ll have the ability to identify a solution with the Legislature next session,” Keith said.
Keith spoke Wednesday at a policy board meeting for Fairbanks Area Surface Transportation Planning, or FAST Planning, the organization that helps program federal funds for projects in the Fairbanks and North Pole area.
Alaska relies heavily on federal funds to construct and repair highways, airports and other transportation infrastructure, but the state often has to have some skin in the game to receive that money.
In the capital budget this session, state legislators fulfilled those state match requirements in part by reappropriating $70 million in unexpended or unobligated funds from old highway and aviation projects.
Senate Finance Committee Co-Chair Bert Stedman (R-Sitka) didn’t immediately respond to a request for comment Wednesday. But at an April meeting, he framed the reappropriations as a way to help the state wriggle out of a tight fiscal situation.
“It’s a one-time maneuver. And next year’s budget will be more challenging,” he said at the time.
But Gov. Mike Dunleavy nixed most of those reappropriations when he signed the budget bills last week, leaving a hole in the state match.
Keith called those line item vetoes “important.”
“Many of these appropriations have already been spent or partially spent and are tied to active projects,” she said.
Prior to the line item vetoes, about half of the Legislature’s $70 million reappropriations sum had come from money put aside years in 2017 and 2018 for the Juneau Access Project. AKDOT released a request for proposals (RFP) in May for a contractor to begin design and construction for that project this summer. The state released the RFP just days after the Legislature passed the final budget bills.
Former democratic state lawmaker and current Mayor of the Fairbanks North Star Borough Grier Hopkins sits on the FAST Planning Policy Board, and he was skeptical about the claim that upcoming projects in the STIP wouldn’t get pushed back. He said it would have been better to keep the reappropriations in place and adjust the funding sources later, if necessary.
“I guess I disagree that it was an important action taken by the governor, and it’s going to cause further delays and impacts on our contractors being able to get jobs on the street,” he said.