House Finance hears overview of Senate Bill 57, Alaska capital budget

Juneau — The Alaska House Finance Committee on April 28 received an introductory briefing on Senate Bill 57, the capital budget, including how the Senate package reduces state general fund exposure while capturing federal matching dollars and funding 27 projects, committee staff said.

"This budget has dollars $2,500,000,000 in federal funds that we captured with $155,000,000 UGF," David Scott, staff to Sen. Stedman and to the Senate Finance Committee, told the committee as he summarized the Senate version of the capital bill. He said the bill before the committee spends $2.9 billion in total capital funds.

Scott said the Senate package prioritizes statewide needs — including public safety, essential infrastructure and deferred maintenance — over district-specific capital requests. Committee members were told the Senate denied all individual capsid requests and removed or reduced numerous administration requests.

The nut of the Senate offer, Scott said, is a mix of new projects, reappropriations of prior appropriations, and a fund-source change for Permanent Fund dividends. He told the committee that, after accounting for federal match, the Senate added 27 projects totaling $88.8 million; of those, roughly $46 million is financed with unrestricted general funds (UGF), $34 million from designated general funds (DGF) and about $9 million from other funds.

Scott highlighted several items in the package: funding to obtain a Federal Energy Regulatory Commission (FERC) license for the Dixon Diversion project (the appropriation is for licensing activity, not construction); authority for Alaska Housing Finance Corporation programs for rental assistance and senior housing; IT updates for multiple departments; Dalton Highway maintenance; Alaska Marine Highway System vessel maintenance funded from the Marine Highway Fund; and a new evidence building for the Fairbanks Department of Public Safety post. On the Fairbanks evidence project, Scott said current evidence storage "are ConEx boxes" with mold issues and that personnel must don protective gear to access them.

On deferred maintenance, Scott said the Senate deferred maintenance package totals $36 million, with $19 million directed through the Major Maintenance Fund for K–12 schools. Michael Partlow, capital budget coordinator for Legislative Finance, told the committee the statewide deferred maintenance appropriation to the governor's office is intended for deferred-maintenance needs across state assets and has increasingly been used to address emergent priorities because of the backlog. "Because of the billion-dollar scale of our deferred maintenance list, there's always a roof collapsing somewhere," Partlow said.

Scott explained two revenue actions that reduce the budget's UGF requirement: reappropriating stalled DOT projects ($47.1 million UGF) and old highway and aviation match ($20.9 million), and increasing the Permanent Fund Dividend board distribution to the statutory cap (from the board-authorized 30% to 50% of net income), which he said yields roughly $12.5 million more in dividend funds available for capital. He said those actions together displaced roughly $80.5 million of UGF.

Committee members asked technical and timing questions: Representative Galvin and Representative Ballard asked to follow along with the provided report pages; Representative Stout questioned how the Permanent Fund dividend board action would work if the board declined to pay the larger dividend; Representative Hannon asked about contingency language tied to a potential acquisition of the Stratton Library building in Sitka and the possibility of future supplemental requests if a purchase proceeds. Scott and Partlow said specific cost estimates for renovating the Sitka building to a courthouse were not available in the materials before the committee and would come from the judiciary or DEED if pursued.

Scott closed by summarizing the Senate package's UGF totals: the bill contains about $161.6 million in UGF, which he said is $119.8 million less than the governor's submitted capital budget. He said denials and scope reductions, together with the reappropriations and fund-source changes, produced the lower UGF total.

The committee did not take formal action on SB 57 at the April 28 introductory hearing; members were briefed and asked technical questions. The House Finance Committee is scheduled to meet again the next morning to hear an overview from the Office of Management and Budget and consider additional bills.