Capital budget will keep pump primed for construction

The $2.94 billion state capital budget for fiscal year 2013 approved in the closing hours of the 2012 legislative session is chock-full of projects. The good news, however, is that the spending total is within the range that Gov. Sean Parnell and legislative leaders agreed on, and Parnell says he will make minimal vetoes from the bill.


Fiscal year 2013 begins July 1, so Parnell must give final approval to the budget by June 30.

The bill includes $870 million for transportation, $370 million for education projects, $210 million for energy and $90 million for projects to improve health care.

There also are a large number of small appropriations to community groups and nonprofits, some of them one-time grants for programs, and not for facilities.

About one-third of the appropriations are federal funds for major construction programs administered by the state and appropriated through the state budget, and about two-thirds of the spending is state funds.

The biggest chunk of the capital budget is the surface transportation and state airports programs, mostly financed by federal funds. The bill authorizes $451.1 million for surface transportation project, much of it for highways, and $227 million for improvements to state-operated airports.

Another major federal program administered by the state is the village safe water and wastewater program, with $51.5 million funded for next year, the majority being federal funds. There is a separate program funded by the state for aid to municipal water, sewage and solid waste projects, mostly in larger communities. It totals $33 million in the capital budget.

Another part of the capital budget authorizes port projects that are also authorized in a separate bill, House Bill 286, for state general obligation bonds that will come before voters in the fall elections. The total is $453.5 million that would fund a variety of ports, mostly for small coastal communities but also has $50 million for the Port of Anchorage expansion (there is an additional $48.5 million for the port elsewhere in SB 160) and $30 million for the Matanuska-Susitna Borough’s planned link of the Alaska Railroad from the existing rail line to the borough’s Port McKenzie, on upper Cook Inlet.

There is an additional $23.5 million for the rail extension in the capital budget. The borough knows it will have the capital budget  money, and if voters approve the bonds there will be additional funds available.

Legislators also included a number of highway improvement projects in the bond authorization bill, totaling $254.5 million, or about half the total authorized in HB 286. Voters will have to approve the bonds at the election.

Other large projects in the capital budget include two major new buildings for the University of Alaska, a $58.6 engineering building for the University of Alaska Anchorage and a $46.3 million engineering building for the University of Alaska Fairbanks.

The appropriations will cover only half the projected cost of the new buildings, university officials have said, so additional money will have to be raised.

There is also money appropriated for two new schools in rural Alaska, $36 million for a school renovation and addition at Emmonak and $24.9 million for a school replacement at Koliganek. Both communities are in southwest Alaska.

Another program funded of strategic importance is the governor’s “Roads to Resources.”

The program includes:

• $10 million for an environmental impact statement for an industrial-type road to Umiat from the Dalton Highway that will help oil and gas exploration in the region and development of a known small oil field at Umiat;

• $10 million for construction of an extension of the Elliot Highway from Manley, west of Fairbanks, toward Tanana, which is at the junction of the Tanana and the Yukon rivers;

• $4 million for more planning and environmental work on a possible industrial road from the Dalton Highway to the Ambler Mining District in the western Brooks Range;

• An addition by legislators for a $40 million road in Southeast Alaska from Kake to Petersburg.

The capital budget also authorizes $30 million for Alaska Aerospace Corp., a state corporation, to expand the Kodiak Launch Facility as part of a new deal with Lockheed Martin Corp. to use Kodiak for a series of satellite launches.

There is also $21 million for the state Alaska Gasline Development Corp. to continue is work on engineering for a 24-inch “in-state” gas pipeline from the North Slope to Southcentral Alaska.

Ketchikan’s shipyard will receive $10 million for further improvements.

The shipyard is leased and operated by a private company, Alaska Ship & Drydock, which was acquired in March by Vigor Industrial of Portland, Ore. Alaska Ship & Drydock performs shipbuilding and major marine maintenance, and is close to landing a contract to build a new state ferry, a major project.

The popular state home weatherization and home energy efficiency rebate programs are funded through the capital budget also. For next year, the capital budget bill has $51.5 million for the weatherization program, which is mostly for low-income Alaskans, and $20 million to pay the home efficiency rebates, which are for Alaskans of all incomes.