Federal dollars and BIL awards boost rural airport projects; DOT warns of FY25 funding uncertainty

Troy LaRue, division operations manager for Statewide Aviation at the Alaska Department of Transportation and Public Facilities, and Rebecca Douglas, aviation planning chief, briefed the Senate Transportation Committee in Juneau on March 6 on federal funding and project plans for the rural aviation system.

For the record, Troy LaRue introduced himself as "Troy Larew, division operations manager, statewide aviation," and Rebecca Douglas said, "For the record, Rebecca Douglas. I am the aviation planning chief under Troy LaRue in Statewide Aviation for Alaska DOT." Their presentation covered federal Airport Improvement Program (AIP) grants, funding available through the Bipartisan Infrastructure Law (BIL), and a queue of runway, safety and terminal projects across the state.

The update is important because 82% of Alaska communities rely on aviation for passenger travel and freight. LaRue told senators that operating the statewide aviation system costs "a little under $50,000,000," and that the department supplements that amount with aviation fuel tax and leasing revenue.

Douglas said AIP funding into Alaska has been relatively consistent over recent years and that, for federal fiscal years 2025 and 2026, the FAA program allows a reduced 5% state match for eligible projects (a temporary change tied to the FAA reauthorization). She also described BIL funding providing roughly $50,000,000 per year for the rural airport system above the standard federal allotment, money the department can roll forward across years if unused.

Officials highlighted large projects in Southeast Alaska: Sitka’s terminal work has federal funding on the order of $47,000,000 over multiple grants and phases, and Ketchikan’s terminal project is about $35,000,000 in federal funding for planned construction phases. LaRue said Sitka is partly under construction and that Ketchikan will receive major construction grants later in the program timeline.

Douglas said the FAA changed grant programming rules requiring one grant per unit of work, which increased the department’s grant count and paperwork but also simplified closeouts. She said the department used AIP and supplemental BIL funds to advertise roughly 11 construction projects planned for the 2025 season, although she cautioned that a federal continuing resolution could delay grant obligations until later in the year.

Douglas also reported a recent discretionary resiliency grant award for Yakutat Airport’s master plan, an award she said adds supplemental funds that the department can use to reallocate previously planned federal funds to other projects.

On operations, LaRue and Douglas described how the department pools FAA entitlement funding from multiple airports to fund higher-cost projects across rural Alaska, rather than restricting each airport’s entitlement to the originating airport. Douglas said the department spends its FAA entitlement amounts annually and applies them against a multi-year program of maintenance and capital projects.

Senators asked about terminal maintenance and ownership. DOT staff said the department typically does not own terminals across the rural system; many terminals are owned or managed by boroughs, cities or carriers. Sitka and Ketchikan were described as co-sponsored projects in which the department has worked closely with local governments.

Douglas pointed senators to the Alaska Aviation System Plan website as a public source to review project queues and timelines. She said the department expects to have more clarity on FY25 obligations after Congress acts on appropriations, with March 14 identified as a key date for the near-term appropriations timeline.

Committee members requested written follow-up on FY25 allocations and project scheduling once federal appropriations become clearer. DOT staff agreed to provide written updates to the committee.