LOS ANGELES — The Alaska State Senate passed a $2.1 billion capital budget for fiscal year 2015 on Friday, which included a $245 million financing package for a heat and power plant at the University of Alaska Fairbanks.
That amount includes state funds, as well as $157.5 million in anticipated bond revenue — part of which would come from the Alaska Municipal Bond Bank Authority. The Senate also passed a separate Senate Bill 218 that would increase the borrowing limit of the bond bank authority, as part of the overall package.
Senate Finance co-chair Kevin Meyer, R-Anchorage, said the Senate has been focused on identifying projects started in recent years, but still need additional funds to complete.
"For the past two years, we have seen the negative impact that results from not completing these projects. Costs of construction, supplies, and vendor contracts increase year over year and it is resulting in increased price tags for these projects," Meyer said in a statement. "This puts pressure on future capital budgets, which is in direct opposition to our effort to constrain spending."
The budget also authorizes more than $90 million for deferred maintenance on projects around the state, including buildings, public facilities, community centers, and libraries. An additional $107.4 million is proposed for road construction and maintenance, $17.8 million for airports and aviation safety measures, and $35 million for ports, harbors, and the Alaska Marine Highway System facilities.
The budget is a $250 million decrease from last year's capital budgets. It includes $547 million in unrestricted general funds, $182 million in designated general funds, $266 million in other state funds, and around $1.1 billion in federal funds.
The budget bill passed with 19 votes in the Senate, with only one dissenting vote. It is now being considered by the House.
On Saturday the Senate also passed House Bill 23, which authorizes funding for the long-stalled plan to build the Knik Arm Crossing, a bridge that would span 1.7 miles between Anchorage and the Mat-Su Valley.
The bill had already been passed in the House, and now returns there for a concurrence vote on changes made in the Senate.
If signed into law, the fate of the nearly $1 billion project would be in the hands of the Federal Highway Administration. No state bonds can be sold and significant construction cannot begin until the administration approves up to $350 million in low-interest loans under the Transportation Infrastructure Finance and Innovation Act.
If the loans are approved, the next part of the financing would come from $300 million in federal receipts from a National Highway System fund. The third portion of the financing will come from $300 million in state bonds, which would be repaid over a 20-year period at $20 to $25 million per year.
Previously, a public-private partnership was considered for the project's financing, but state lawmakers decided that a fully public finance model would be more cost-effective.
"Under this plan, the project debt is serviced more quickly, so the state benefits from excess tolls sooner," said Senator Anna Fairclough, R-East Anchorage/Eagle River. "When all is said and done, we will have saved hundreds of millions of dollars over the public-private financing plan and we will not be strapped to a long term contract with a private partner."
