I'm one of the voices that for well over a decade have been questioning the state of Alaska's zeal for megaprojects. Call me crazy, but when the state's own studies show again and again that a project is simply not worth the costs, I don't think we should proceed.
The numbers I point to speak for themselves; they come straight from the Alaska Department of Transportation, the public agency that has lobbied the governor — hard — to construct the Juneau-Katzehin road.
[Assault on Alaska megaprojects skips inconvenient facts, ignores benefits]
The plain truth is that this megaproject will cause the state budget to go up. What's more, the economic benefits just aren't there to justify the expense.
As many astute readers have pointed out, construction of the half-billion-dollar road won't mean you will be able to drive all the way from Anchorage to Juneau; rather, it will mean a shorter ferry ride from Haines and Skagway to the yet-to-be-built Katzehin ferry terminal. This is one of a number of important facts and figures that the small but persistent cabal of road boosters has failed to share. Here is the rest of story.
The Legislature, led by Senate Finance Committee Chair Anna MacKinnon, has authorized spending close to $200 million in federal funds on the Juneau road extension.
As previously reported by the ADN, the senator and her husband, Associated General Contractors of Alaska Director John MacKinnon, stand to financially benefit from the access the 50-mile road would provide to mineral claims on family-owned property in Berners Bay.
But just because the Legislature has authorized spending federal funds does not mean the money is set aside for this project. In fact, there is very little money actually budgeted for the project.
Here's how it works: Each year the Legislature intentionally authorizes more projects than the state has funding for in order to give the Department of Transportation flexibility. DOT then creates a "fiscally constrained" three-year budget known as the Statewide Transportation Improvement Program. Less than $7 million is currently budgeted for the Juneau-Katzehin road. That's about 1 percent of the $574 million cost estimate. Since the bulk of the megaproject is not currently in the STIP, hundreds of millions of dollars worth of projects queued up for places like the Mat-Su, Anchorage or Fairbanks must be delayed or canceled if the governor decides to proceed with the road.
To be clear, this megaproject won't bring in new federal funds. Rather it will focus the funding we do have on one single dead-end road.
And it will cost the state's operating budget to go up. I know that's counterintuitive because ferries, generally speaking, cost more to maintain and operate than roads. In specific cases, however, roads cost the state more. As stated on page 4-61 of the 2014 study signed by former Transportation commissioner and ardent road booster Pat Kemp, the net cost to the state of the Juneau-Katzehin road is $193 million more than the cost of maintaining existing ferry service over the 36-year life of the project. DOT's study goes on to explain that this is because both the capital and operating costs for the Juneau-Katzehin road would be greater than those associated with the existing ferry alternative.
[Governor going soft on megaprojects as Juneau road shows signs of life]
Why would the state knowingly approve a project that will increase the state budget to the tune of $5 million per year at the same time that shrinking budgets have forced it to close maintenance road and airport maintenance stations across the state?
It is also true, as Win Gruening points out in his Oct. 5 commentary, that the benefit-cost ratio analysis does not account for every single cost and benefit. This is in part because what some perceive as a benefit, for example, subsidizing travel for vehicles to travel along the Lynn Canal, others, like the 45 percent of ferry walk-on passengers who currently travel the Lynn Canal without a vehicle, may consider a cost.
However, the benefit-cost ratio is often considered the best stab at evaluating whether a project is worth the costs. The American Association of State Highway and Transportation Officers advises planners to nix projects that have a benefit-cost ratio of less than 1. With a ratio of 0.28, the benefit cost ratio for the Juneau-Katzehin road is so far below the cutoff that it is a wonder the governor is even considering the project.
The challenge for Gov. Bill Walker with a project that has been so controversial for so long is that there are so many numbers and so many arguments for and against it. The trick is to focus on the most important questions. Will building the Juneau-Katzehin road save the state money? No. Do the benefits outweigh the costs? No.
OK, then, let's move on.
Emily Ferry is deputy director of the Southeast Alaska Conservation Council in Juneau.
The views expressed here are the writer's and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com or click here to submit via any web browser.