Alaska's senior U.S. senator, Lisa Murkowski, succeeded in adding several provisions to the trillion-dollar infrastructure package that will benefit Alaska, including more federal aid for the state ferry system. Murkowski, speaking to reporters Aug. 4 on Capitol Hill, was among a bipartisan group of senators who negotiated the deal that won Senate approval on Tuesday.
The 2,700-page, trillion-dollar infrastructure bill that passed the U.S. Senate on Tuesday could provide tens of millions of dollars, maybe more, to help the ailing Alaska Marine Highway System.
How to use the money - assuming Congress approves the final package later this year, which is far from certain - would be decided by the governor and Alaska legislators next year.
"We can't allow it to be a total replacement of the state's responsibilities," Robert Venables, executive director of the Southeast Conference, said Monday.
He hopes the state would use the additional federal funding to improve from an insufficient level of service to providing "adequate service" to meet coastal community needs, Venables said.
State general fund dollars cover a little more than half of the ferry system's $108 million annual operating budget, with most of the rest of the money coming from ticket revenues. The budget is down about 25% from three years ago.
There is nothing in the federal infrastructure funding bill that would explicitly require Alaska to use the new federal aid to improve service, rather than replace state dollars.
A key element of the legislation for ferry communities is a provision that authorizes $1 billion to support essential ferry service for rural communities nationwide, at the rate of $200 million a year for five years.
Alaska Sen. Lisa Murkowski, a member of the bipartisan Senate group that negotiated the deal, was behind efforts to add the provision to the legislation.
The new federal aid program would be limited to ferry systems that serve at least two communities, at least 50 miles apart, which eliminates a lot of the short-haul systems around the country, putting Alaska in a prime spot to get some of the money.
The bill directs the secretary of Transportation to "establish requirements and criteria for participation in the program ... including requirements for the provision of funds to states."
While the bill authorizes $200 million a year for five years, starting with the current federal fiscal year that ends Sept. 30, 2022, the money would be subject to annual appropriation by Congress.
And it would be subject to legislative appropriation in Alaska. "You still have to get it through the political process," State Senate Finance Committee Co-Chair Bert Stedman, of Sitka, told the Anchorage Daily News last week, speculating that any federal money could be used to merely replace what the state already spends.
Stedman in the past has bemoaned the growing urban-rural political divide in Alaska, and its damage to services important to smaller communities.
Acknowledging the politics of the state budget process, Venables said no net gain to the ferry system would be a disappointing outcome of the federal aid.
The governor's office has not specifically commented on potential uses of any additional federal aid for the ferry system.
However, Randy Ruaro, the governor's chief of staff, said in a public radio interview last week: "That's going to produce a very significant amount of funding for Alaska's ferry system. We just don't know exactly how much will come out of that formula yet. But it will be substantial. ... We're already making plans on our end on how to best get the highest and best use of the funds for the system."
The bill also would change federal law, allowing the Alaska Marine Highway System to spend federal highway dollars on vessel operations and repairs, not just new construction. Most of the fleet is decades old, with the state short of its own money to build new ships.
The bill authorizes $570 million out of the Highway Trust Fund over the next five years for the construction of new ferries and ferry terminals nationwide.
Another provision of the bill authorizes $250 million for pilot project to build and operate ferries that run on electricity or other lower-carbon fuel. Though the bill does not name Alaska, it says at least one grant under the program must go toward "a ferry service that serves the state with the largest number of Marine Highway System miles." The answer to that is Alaska.
Venables said he is excited about the prospect of Alaska winning a grant for such a ship to operate in Lynn Canal, between Haines and Skagway, maybe Juneau, or between Ketchikan and Metlakatla, maybe Prince of Wales Island.
Especially for an electric-powered ship, the shorter shuttle runs would be more feasible than a longer mainline route through Southeast, he said.
Other provisions of the bill would authorize:
- $3.5 billion, about 40% more in federal funding than current levels, to highway construction, repair and maintenance in Alaska, spread out over five years, Murkowski's office said.
- More than $180 million to the state for clean water projects. Though a substantial down payment, the state has said it needs close to $2 billion to provide adequate drinking water and sewage services in rural Alaska. Wrangell needs substantial repairs to its water reservoirs and water treatment plant.
- Separately, Alaska villages would receive a share of $3.5 billion designated for Indian Health Services water and sewage spending nationwide. That amount would be spread across five years.
- And about $5 billion would be available in grants under a new airport terminal improvement program, with some of the money set aside for small, rural airports, Murkowski's office said in a statement. The state of Alaska owned and operated 237 airports as of 2019, including the Wrangell airport, according to the latest figures from the state.
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