Juneau road and Nome port lose funding as Alaska Senate passes capital budget
Sen. Bert Stedman, R-Sitka, presents the Alaska Senate's draft capital budget on Tuesday, April 15, 2025, as fellow senators listen. (Photo by James Brooks/Alaska Beacon)
As Alaska legislators confront a major state budget deficit, the state Senate on Tuesday 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 may also make line-item vetoes.
The budget bill passed by the Senate is almost entirely limited to the minimum needed to unlock more than $2.5 billion in federal grants for road maintenance and other priorities.
With oil revenue down and costs up — including the Permanent Fund dividend — analysts are projecting a significant budget deficit for the coming year. On Friday, the House voted to reduce the proposed 2025 dividend, but not enough to erase the deficit.
To help the issue, members of the Senate Finance Committee clawed back millions of dollars previously allocated to construction projects, reducing the need for new state revenue to pay for the capital budget.
Among the clawbacks: $37 million set aside for the Juneau Access Project, an effort to improve road and ferry service to 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 Sen. Jesse Kiehl, D-Juneau and a member of the Senate Finance Committee.
Other notable clawbacks included $10 million for a proposed deep-draft port in Nome, and $138,611 remaining in an account to be used for Ketchikan's proposed Gravina Island Bridge, once dubbed the 'bridge to nowhere.'
Members of the finance committee also turned to the state-owned investment bank, the Alaska Industrial Development and Export Authority, for an additional $12.5 million above the $20 million already pledged by the bank to the state treasury.
Budgeters rejected some of Dunleavy's budget requests: $2.5 million for a proposed road in the western portion of the Matanuska-Susitna Borough, $4.2 million for development of the trans-Alaska natural gas pipeline, $2.5 million for firefighting aircraft, and $6.5 million for a new state plane to be used for emergency response.
They also rejected all $3.2 billion in requests from individual legislators for their specific districts.
Senate Minority Leader Mike Shower, R-Wasilla, called the result 'a fair and balanced approach' in a statement released after the vote.
Some projects saw reduced funding: A $6.5 million request to expand the Bradley Lake hydroelectric project's capacity was cut to $6 million. Bradley Lake is among the cheapest sources of electricity on the Railbelt.
The Senate's biggest addition was $19 million for major maintenance at public schools — the governor had proposed no funding for the major maintenance list.
'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 Sen. Bert Stedman, R-Sitka and co-chair of the Senate Finance Committee in charge of the capital budget.
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