As Alaska legislators confront a major state budget deficit, the state Senate on April 15 voted unanimously to approve a “bare bones” $162 million capital budget to pay for construction and renovation projects across the state.
The spending plan, which would take effect July 1, remains a draft subject to approval by the House. Gov. Mike Dunleavy could also veto individual items in the spending plan.
The budget bill passed by the Senate is almost entirely limited to the minimum in state money needed to unlock more than $2.5 billion in federal grants for road projects and other priorities.
With oil revenue down and costs up, legislative fiscal analysts are projecting a significant state budget deficit for the coming year.
On April 11, the House voted to reduce the proposed 2025 Permanent Fund dividend to about $1,400, but that is not enough to erase the deficit and a further reduction is possible as legislators work to finish the budget before the May 21 adjournment deadline.
The governor’s proposed budget for capital spending across Alaska did not include any money for Wrangell projects, and the Senate did not add any in its work on the bill.
The borough’s wish list for state grants this year added up to tens of millions of dollars, including an upgrade to the disinfection system at the community’s wastewater treatment plant; Inner Harbor replacement; deepwater port development project at 6-Mile; a new roof at the recreation center; repairs to the rot-damaged Public Safety Building; and repairs to the viewing platform at Petroglyph Beach.
Borough Manager Mason Villarma said he was not surprised that no Wrangell projects made the list in such a tight state budget year.
To help afford even the pared-down state budget, members of the Senate Finance Committee clawed back millions of dollars previously allocated to construction projects that have not yet been spent.
Among the clawbacks was $37 million set aside for the Juneau Access Project, a longstanding effort to build a road along Lynn Canal for highway access between Haines and Skagway and the capital city.
“To even get to the bare-bones capital budget, my district ended up contributing half a dozen ribs and a femur. … I’m not pleased,” said Juneau Sen. Jesse Kiehl.
“This is just the beginning of many tough decisions you’re going to see over the next few weeks, between now and the end of May, and I don’t think some of the folks in the building have quite grasped that yet,” said Sitka Sen. Bert Stedman, co-chair of the Senate Finance Committee in charge of the capital budget.
The Sentinel contributed reporting for this story. The Alaska Beacon is an independent, donor-funded news organization. Alaskabeacon.com.
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