Alaska village programs facing big cuts in federal funding

Kyle Hopkins

As part of an effort to shave earmarks from the federal spending plan, President Obama has proposed cutting $10 million from a Denali Commission program that pays to purchase health equipment and build village clinics and elder housing in rural communities.

"In many cases these funds pay for equipment and construction in private health care facilities whose costs should not be subsidized by the federal government," the Office of Management and Budget wrote in a report explaining cuts in Alaska and elsewhere. The projects are "not subject to a competitive or merit-based process," the OMB found.

Trying to delete the money has become a routine part of the federal budget-making process. Presidents Bush and Obama have proposed cutting the program each of the past three years, only to see Congress re-inject the money.

It's too early to be concerned, said Joel Neimeyer, who heads the commission as federal co-chair. "We'll just see where it ends up," he said.

Neimeyer said White House officials told him soon after his selection for the job in the fall that they'd be targeting earmarks.

The Denali Commission has steadily lost funding in recent years. The annual budget has fallen from about $141 million in 2006 to $61 million in 2010, according to the commission.

Created by Congress in 1998 at the request of then-Sen. Ted Stevens, the Denali Commission oversees spending on rural infrastructure in Alaska. It trains crews to weatherize village homes and replaces rotting rural fuel tanks, funds alternative energy projects and builds roads.

The president proposes pulling all funding for the commission's health care construction budget, which has parceled out $191 million over the past 10 years and has paid at least partial construction costs for 95 clinics across the state, according to the commission.

Under the terms of the program, once the commission receives the money, village must compete for project funding, commission officials said Friday.

The commission's draft to-do list for 2010 includes clinic projects in villages from Venetie to Wales, according to a tentative road map released Friday.

For example, the report says the Denali Commission is expected to pay for $800,000 of the estimated $1 million cost of a primary care clinic in Takotna, and to cover about $2.3 million of a $2.5 million clinic in Napakiak.

If the commission lost construction money for the clinics, it could still help villages plan and design their projects while looking for other funding sources, such as the Department of Housing and Urban Development, Neimeyer said.

"Maybe these clinics won't get built in the next two years, but I'd be surprised if most of them aren't under construction in the next five years," he said.

Alaska Sen. Mark Begich responded to the president's budget in a written statement Monday:

"I am disappointed, but it is not unexpected, to see earmarks for the Commission cut as they were last year. I look forward to working again with Sen. (Lisa) Murkowski to restore the funding, as we did last year."

Begich said it was good to see the president planned to give the Denali Commission $11.9 million for its general budget.

That's just one source of funding for the commission, which gets its money piecemeal from multiple federal sources.

Begich and Murkowski are working on legislation that would pay for the commission through a single, predictable appropriation each year, said Begich spokeswoman Julie Hasquet. Last year, Begich proposed setting commission funding at the 2006 level of about $140 million.

"Each year the appetite for earmarks in D.C. grows less and less. That's why this need for sustainable funding is even more important," Hasquet said.

A spokesman for Murkowski couldn't be reached Friday afternoon.

The Denali Commission funding is part of a $3.8 trillion federal spending plan announced by the president Monday.

The proposal would also eliminate a high energy cost grant program, under the Department of Agriculture, that contributes to Denali Commission funding. The program was worth $18.5 million in this year's budget, with about half of the money going to Alaska, according to Murkowski's office.

The OMB found that the grants encourage people to buy fossil fuels and that a federal low-interest loan program serves the same goal of helping rural people afford high energy bills.

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