House Finance Committee hears governor's proposed $1.2 billion capital budget

Kenny Knutson / KTUU
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JUNEAU, Alaska (KTUU) - Gov. Mike Dunleavy’s proposed capital budget for fiscal year 2020 would see a drop of around $200 million from the capital budget passed by the Legislature in 2018.

Budget director Lacey Sanders presented an overview of the proposed $1.2 billion capital budget to the House Finance Committee on Tuesday.

The budget calls for just over $95 million to come from unrestricted general funds which would be used to generate over a $1 billion in federal matching funds.

The vast majority of that money would come from the FEDERAL Department of Transportation for highways and airport maintenance.

Some of the funds come from unusual places. The proposed South Denali Visitors Center would be funded in part from $20 million in dividends and receipts from the Alaska Industrial Development and Export Authority.

Co-chair of House Finance Committee, Rep. Tammie Wilson, R - North Pole, said using receipts to fund a one-time project was essentially dipping into AIDEA's savings account.

While much smaller than the operating budget, the capital budget has an important place in funding construction projects and tackling deferred maintenance.

Co-chair of the Senate Finance Committee, Sen. Natasha von Imhof, R - Anchorage, is in charge of formulating the Senate’s version of the capital budget.

“Looking at the capital budget for the last several years, it has shrunk significantly since 2014,” she said. “With that, there has been significantly less projects going on in our state. Construction jobs are down and we now have a backlog of deferred maintenance.”

In 2018, the Office of Management and Budget reported to the Senate Finance Committee that Alaska had a $1.87 billion backlog in deferred maintenance projects. The University of Alaska has over $1 billion in backlogged projects.

Under the governor’s capital budget plan, the University of Alaska would receive $5 million from the state for deferred maintenance.

Wilson wants to see a list of the backlogged deferred maintenance projects to determine what projects are most essential to fund.

She also said by telephone that the state needs to be “really careful with our money” in making investments that drive future revenue.

With proposed cuts to agency spending, von Imhof said the Senate should also “strategically” consider how to keep investing in capital projects. She spoke about the need to fund roads as well as broadband infrastructure which could help with distance education and telehealth

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