Dunleavy releases package of bond spending projects
Gov. Mike Dunleavy submitted the final piece of his 2022 budget plan to the functional half of the Legislature Feb. 5 but where the $356 million construction bond package will end up is anyone’s guess.
The general obligation, or GO, bond proposal in Senate Bill 74 would spend $356.4 million of state general funds to capture just more than $1 billion in matching federal transportation funding.
Dunleavy has said he wants to hold a special election this year should the stimulus effort pass the Legislature in order to expedite the process that would traditionally have the vote in November 2022. The Alaska Constitution requires a statewide vote to approve most forms of new debt.
“This statewide bond package is essential to stabilizing our economy and putting Alaskans back to work following the economic upheaval caused by the pandemic,” Dunleavy said in a statement from his office. “Not only will this proposal create jobs, it will improve critical infrastructure for all Alaskans. I look forward to working with the Legislature to take this to a vote of the people following the 2021 legislative session.”
The governor announced his plans for a roughly $350 million state GO bond package this past December with his broader fiscal year 2022 budget plan as part of $5 billion in stimulus programs and spending — mostly for Permanent Fund dividends — to counter the economic toll the pandemic has taken on Alaska’s nascent recovery from a multi-year recession.
In order to capture the most federal money, the projects are largely road and airport upgrades ranging from $29.9 million of state money for a new Sterling Highway roadbed around Cooper Landing to $540,000 for a mile of work on the Denali Highway.
It would also add $25 million to the School Major Maintenance Grant Fund as well as $9 million to aid in replacing the Houston Middle School that was demolished following the November 2018 earthquake.
Nearly $30 million would be allocated to the University of Alaska for general building maintenance and energy efficiency projects across its campuses along with $19.5 million for similar work at AVTEC, the state’s vocational training college in Seward.
The governor is also proposing $8.5 million for the Alaska Industrial Development and Export Authority to continue early work on the West Susitna Access project that would provide roads to coal and mineral prospects on the remote side of the Susitna Valley as well as $2.1 million for the Arctic Strategic Transportation and Resources, or ASTAR, concept by the Department of Natural Resources to similarly develop a primitive North Slope road network to access oil, gas and minerals and connect otherwise isolated communities.
According to the governor’s spokesman Corey Young, the administration felt the $356 million of state spending being proposed strikes an appropriate balance between the state’s ability to take on additional debt and the economic impacts the funded work would have across the state.
Young wrote in an email that the West Susitna Access allocation would provide AIDEA the funds to prepare an environmental impact statement and get through the initial feasibility evaluations.
While the West Susitna road is the revival of former Gov. Sean Parnell’s Roads to Resources initiative, the money for ASTAR would continue work started by Gov. Bill Walker’s administration in 2017 and subsequently carried by the Legislature and Dunleavy through additional rounds of funding.
A panel of state senators discussed the GO bonds among several issues during a Feb. 9 videoconference hosted by the Southeast Conference, a regional community development group.
Juneau Democrat Sen. Jesse Kiehl said he believes much of the work proposed for the area is “good, central infrastructure,” but questioned the regional allocation of it as well.
Senate President Peter Micciche, R-Soldotna, said the bond package needs to fit into an overall fiscal plan for the state.
“My interest this year is working towards a sustainable budget future. I know that feels like a tall order for many but I have faith in our Legislature,” Micciche said.
Sitka Republican and Senate Finance co-chair Sen. Bert Stedman noted that much of the work is basic infrastructure that the state could use but also emphasized the bond process is slow, meaning the money is not likely to “hit the street” and produce an economic benefit for several years.
“I recognize that interest rates are low and money is really cheap right now but that’s only part of the equation,” Stedman said. “If you want immediate relief you have to use cash, which is a pretty rare thing right now.”
Elwood Brehmer can be reached at [email protected].