$2.6 billion Senate capital budget boosts port, not bridge

Richard Mauer

JUNEAU -- The Senate unveiled its $2.6 billion capital budget over the weekend, a goody-laden bill that includes more than $380 million in earmarked projects for the Anchorage area -- but nothing for the Knik Arm bridge and only a portion of the amount sought for Anchorage port construction.

The bill was released at a Senate Finance Committee meeting that began just before 9 p.m. Saturday night -- on the eve of Easter and the second night of Passover. The committee room was jammed with aides from other legislators who abandoned their evening plans to gobble up copies of the inch-thick bill and scan it for the projects sought by their bosses.

Senate Finance Co-Chairman Bert Stedman, R-Sitka, wearing a green tie embroidered with moneybags, said the capital budget was choreographed between the governor's office, the Senate and House. There should be no surprises for any of the parties, at least in terms of total dollar amounts, he said.

"The governor gave us a reasonable budget target, which was last year's numbers," Stedman said. "We agreed on the overall number from last year and that set the spending limit, and then the House and the Senate had discussions and agreed on who's going to spend what portion."

With the ink of his line-item veto pen, the governor has the ability to enforce his will, but Stedman said he had no interest in challenging Parnell -- the size of the capital budget seemed about right to him.

The Finance Committee added about $722 million to the budget initially submitted by Parnell, leaving all the governor's priorities intact with still enough room for the House to add another $300 million in its own earmarks, Stedman told reporters.

In addition to the capital budget, the House, Senate and governor's office have agreed on a bond package for another $450 million on transportation projects, Stedman said. The bond bill will be revealed Monday, though its spending would be contingent on voter approval.

"That's agreed upon too, not only the dollar amount but what's in it," Stedman said.

Stedman compared the spending bill to about $3 billion set aside in savings in the operating budget. Stedman said he hoped to eventually create an endowment out of savings when cash reserve reaches about $20 billion in a year or so. That endowment could be managed like the Permanent Fund but with a dividend that goes toward paying regular state operations.

Weston Eiler, the committee aide who presented the capital budget -- officially Senate Bill 160 -- said among the large items were funds for engineering buildings at both the Anchorage and Fairbanks campuses of the University of Alaska.

Stedman, a Republican from Sitka, did well for the two House districts that make up his Senate district. The budget would spend $145 million there, more than a third of the amount directed to the 16 House districts included in the Anchorage area total.

The committee took about 7 minutes to put the budget on the table and then adjourn. Stedman said later that he expected the budget to pass the Senate early this week and be transmitted to the House. With adjournment scheduled for April 15, the only legislation that must pass between now and then are the operating and capital budgets to keep government running.

Stedman said he still hoped to also get a rewrite of the state's oil taxes out of his committee in the next few days.

Meeting with reporters after the committee session, Stedman said the troubled Anchorage port expansion project gets $25 million in the Senate's capital budget. Another $50 million is earmarked in the bond package for the Anchorage port, he said, and he expects the House will add another $25 million before it's through with the capital budget.

"That leaves them short about 250 (million dollars)," Stedman said. The port had sought $350 million this year, but the Legislature decided to dole out the money slowly because of problems that have surfaced over the last few years.

"I think that's part of the reason why there's not a lot of enthusiasm in just doing a $350 million appropriation," Stedman said. "We inherited the port as the last man standing with cash. The municipality is pretty much out of it, the federal government's out of it."

If the port continues to show the need for more money and is efficiently managing what it has already received, the Legislature would probably appropriate another increment next year, he said.

Asked whether there was any money for the proposed Knik Arm bridge, Stedman said, "It ain't in there. I don't think it's ready for financing. The presentation that was made to the Senate Finance Committee (by the Knik Arm Bridge and Toll Authority) a couple weeks ago was frankly one of the worst presentations my committee members said they've ever seen in here," Stedman said.

Stedman said he was also less than thrilled about spending money on the Point MacKenzie port project across the Inlet from Anchorage, including the railroad extension. The bond package has "probably" $30 million for the project, he said, though he expected the chairman of the House Finance Committee, Bill Stoltze, to increase that funding in the capital budget when it reaches the House. Stoltze is an Eagle River Republican whose district includes some territory south of Wasilla.

Stedman said he would "put the kibosh" on the Point MacKenzie port if he could.

"We're going to have several hundred million dollars in that port," Stedman said, and yet, he said, he hadn't seen a business plan for it that worked.

"At least Anchorage's port, even though we all agree that there's been problems and possibly $20 or $30 million in rebuild -- waste -- at least they're trying to get their act together and scale it back. It's a different animal across the Inlet."

Eventually, Stedman said, Anchorage will probably get its full expansion, resulting in a $750 million port on that side, and a $500 million port on the Point MacKenzie side.

"It's nuts, in my opinion," he said.


Reach Richard Mauer at rmauer@adn.com or (907) 500-7388.

More Legislature news
Anchorage Daily News
Contact Richard Mauer at or on