House transportation committee: veto of reappropriated state match could cost Alaska roughly $500M–$600M in federal aid

During a House Transportation Committee hearing, Co-chair Representative Karen said the governor's veto of reappropriated state matching funds could prevent Alaska from securing roughly $500 million to $600 million in federal transportation dollars that depend on a state match. The committee convened to discuss the vetoed reappropriation, recent submissions to the statewide Transportation Improvement Plan (STIP) and redistribution of August funds; the invited Department of Transportation and Public Facilities (DOT) commissioner did not attend.

The committee emphasized the scale of the potential loss: members cited a range of state-match figures in the hearing record — $62 million and $70 million — and said those state dollars would unlock an approximately 9-to-1 federal match (described in testimony as a 10% state match yielding about 90% federal funds). Committee members warned that, without the state match restored in a future supplemental budget, the legislature would need to find roughly $70 million in January to preserve those federal awards for fiscal 2026 construction seasons.

Why it matters: Federal Highway Administration and Federal Transit Administration approvals and the STIP amendment process govern access to federal funds. The committee asked when Federal Highways would complete review of Alaska’s STIP Amendment No. 2 (submitted to federal agencies on 07/01/2025) and whether any STIP language differed between the publicly noticed draft and the version forwarded to FHWA.

Committee members also raised concerns about a Juneau Access/Cascade Point package that one member said previously had received $37 million in initial legislative appropriation. DOT issued a request for proposals on May 23 to build about three miles of road along Glacier Highway to Cascade Point, bridge work across Cascade Creek, and upland site preparation for a proposed ferry terminal. Committee statements said DOT had not produced feasibility studies or cost-benefit analysis showing how that project would serve the Alaska Marine Highway System or broader stakeholders. The hearing record named likely beneficiaries of the Cascade Point work as Goldbelt Corporation and Kensington Mine; it also said the municipalities of Skagway and Haines submitted letters opposing the project.

Committee members described conflicting information from DOT offices: the committee said Commissioner Ryan Anderson told legislative offices in writing that there would be issues in 2026 if funding was not restored, while Deputy Commissioner Catherine Keith told legislative staff that DOT expected no delays in 2026 and 2027. The committee said some projects already face startup challenges and noted the state received $108 million in federal funds described as "step dollars" in 2023 and only $19 million in the most recent air-missed STIP submission year.

A committee member said, “It’s disappointing that the Department of Transportation and Public Facilities Commissioner Ryan Anderson did not join us today and that we were not given earlier notice of his unavailability.” The committee said its offices had repeatedly asked DOT for written answers to a list of questions about the STIP amendment, which federal aviation and highway projects were affected by the veto (with itemized dollar figures), availability of alternative matching funds as of July 1, and whether contracts for the Juneau Access/Cascade Point work had been awarded or executed. The committee said, as of the hearing, it had not received those responses.

Because the invited DOT representative did not attend, the committee briefly moved into executive session under Uniform Rules Section 22(b)(2) to discuss matters that "tend to prejudice the reputation and character of a person." The hearing record shows the committee recessed, convened the executive session, then returned to open session; no public vote tally was recorded in the transcript.

The committee closed by noting the veto’s cross-regional impacts — Northern, Central and Southeast regions — and the effect on marine, road and aviation programs and on Alaska’s contracting community. Co-chairs said that, absent restoration of the reappropriated match in a supplemental budget, significant emergency legislative action would be required to avoid shortfalls for projects slated to begin in fiscal 2026.

The House Transportation Committee adjourned at 2 p.m.