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Senate Finance takes up GARVEE bond proposal

Posted: Friday, April 12, 2002

JUNEAU (AP) -- Transportation Commissioner Joe Perkins sought help from some of his Lower 48 cohorts this week to fuel support in the Senate for a plan to jump start several major transportation projects here.

Gov. Tony Knowles wants permission to use Grant Anticipation Revenue Vehicle, or GARVEE bonds, to chip away at the state's $7 billion backlog of road construction projects.

But some Senate Republicans oppose the measure without a statewide vote, and The Association of General Contractors of Alaska don't want it because it could mean more work than they could handle, which might attract Outside contractors to start fishing for jobs in Alaska.

A plan to float $379 million in GARVEE bonds passed the House last year but stalled in the Senate out of fears that such a plan would ''overheat'' the construction industry.

In a Senate Finance Committee hearing on the bill Wednesday, officials from New Mexico and Colorado both recommended such a plan for Alaska.

''There's not a corner of Colorado that doesn't get some benefit out of this,'' said Tom Norton, executive director of the Colorado Department of Transportation.

Colorado has used more than $1 billion in GARVEE bonds to undertake road construction projects in that state, Norton said.

Perkins invited transportation officials from the two states to testify via teleconference after a lobbying group opposed to such a plan indicated those states had negative experiences with GARVEE bonds.

Perkins said several states have taken up GARVEE bond projects with success and Alaska could, too.

''I don't feel that will overheat the economy and it's my feeling we can do a lot more,'' Perkins said.

Knowles, a Democrat in his last year in office, proposed a $425 million GARVEE bond plan this year. The Republican-controlled House approves a $379 million plan that is now before the Senate Finance Committee.

House Bill 191 would use GARVEE bonds to finance 56 projects around the state. It also includes funding for fast ferries in Southeast Alaska and about $100 million in Anchorage projects.

The bonds would be paid back over a 15 year period using 10 percent of the state's $400 million federal highway funds, transportation officials said.

The state could also bank some of the bonds and use the interest generated to provide Alaska's required matching grant, said Kurt Parkan, deputy commissioner of the state Department of Transportation and Public Facilities.

''Effectively, we will be able to build these roads without any state dollars,'' Parkan said.

A state Attorney General's opinion said that such a bond package would not require a statewide vote.

But Senate Finance Co-Chairman Pete Kelly, R-Fairbanks, said fellow Republicans in his caucus want such a vote.

Senate committee members will not act on the GARVEE bond package until other bond proposals are considered, Kelly said.

An omnibus bonding package may then emerge which would require voter approval in November, Kelly said.



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