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Senate's capital budget buys Anchorage LIO but won't build Kivalina school

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  • Updated: September 28, 2016
  • Published April 11, 2016

JUNEAU — The Alaska Senate released its proposed capital budget Monday, and one of its few big projects was a line item to buy the Legislature's Anchorage offices for $32.5 million, the price approved by a legislative committee two weeks ago.

Missing from the Senate's capital budget: a request from Gov. Bill Walker to spend $7.2 million for a new school in the Northwest Alaska village of Kivalina.

The Anchorage Legislative Information Office purchase would use money outside the state's unrestricted general fund — the typical yardstick used to measure state spending. Instead, it would come out of the Alaska Capital Income Fund if the Senate's capital budget is approved. That's according to a new version unveiled Monday that was drafted by the office of Sen. Anna MacKinnon, R-Eagle River, who co-chairs the Senate Finance Committee.

The Capital Income Fund is a savings account that takes in earnings each year from a settlement of a state lawsuit with North Slope oil companies, known as the Amerada Hess case. It's also proposed to receive money this year from the Alaska Housing Finance Corp. and the Alaska Industrial Development and Export Authority under the House's and Senate's proposed operating budgets.

Walker's administration said the Kivalina school is needed to fulfill the terms of a legal settlement of the Kasayulie case, which was fought over education funding for remote villages. The school is in the Senate district of Sen. Donny Olson, D-Golovin, who recently jumped from the minority Democratic caucus to the Republican-led majority. Olson serves on the Senate Finance Committee.

A legal opinion from last year distributed by MacKinnon's office Monday says that the additional $43 million for the Kivalina school that lawmakers put in last year's budget "will likely meet the state's obligations" stemming from the Kasayulie case.

The Senate's capital budget, released a week before the Legislature's scheduled adjournment, would also divert $1.5 million in unspent money from past budgets to pay for "video surveillance upgrades and other security enhancements" at the Capitol, including $250,000 left over from travel and materials for a legislative task force on sustainable education.

The proposed Senate budget includes $1.6 million for design work for a deeper port for Nome.

But there's no money for Anchorage's port, in spite of Mayor Ethan Berkowitz's administration's lobbying for $290 million to help finish a delayed modernization project. Asked about the Senate's bill, a spokesman for Berkowitz, Myer Hutchinson, wrote in a text message that the proposal to leave out funding wasn't surprising. "Lots of time left," Hutchinson said.

The total unrestricted general fund spending under the Senate's new capital budget — which doesn't include the $32.5 million for the Anchorage legislative offices — is $88 million, compared to $180 million in Walker's version. In 2013, when the state was flush with oil revenues, the capital budget was $2.1 billion and filled with pork-barrel projects for every legislative district.

The Senate's proposed budget must be approved by the full Senate, and will likely undergo further changes in the House.

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