WASILLA - The Matanuska-Susitna Borough's hopes for $35 million from the state for a rail link between Port MacKenzie and the Parks Highway near Houston just hit the Alaska's multibillion-dollar deficit.
Borough Manager John Moosey and project director Joe Perkins got a polite but firm hint of grim prospects ahead in the Legislature at a joint meeting Tuesday of House and Senate transportation committees in Juneau.
"This is a tough year, as you both know," co-chair Sen. Pete Micciche, R-Soldotna, told them. "I would not take this year as a gauge of support for your project."
Gov. Bill Walker already stripped two Mat-Su megaprojects, the Knik Arm Crossing and a proposed dam on the Susitna River, from his proposed capital budget.
Moosey called the partly finished 32-mile Alaska Railroad link crucial to the region's economic future.
He told the committee that several major deals -- none of them final -- hinge on rail access between the deep-water port and the highway running to the Interior and Fairbanks, including a $160 million liquefied natural gas facility.
The rail extension is about 65 percent complete, built with $184 million in seven state appropriations since 2008 plus one general obligation bond, according to project director Joe Perkins, a former state transportation commissioner. It'll take another $120 million to finish the job, Perkins said.
If the borough gets $35 million this year and the rest next year, the borough could be on track with the Alaska Railroad to open the line in 2018, he said. "If it's piecemealed and continued to be piecemealed, it's going to stretch out."
Funding isn't the only hurdle. One of a half-dozen segments of the project falls across Point MacKenzie farmlands with strict agriculture-only state covenants. The borough is now talking condemnation with the state, Perkins said.
Officials are also negotiating rights-of-way on another segment with landowner Knikatnu Inc., the Wasilla-headquartered Alaska Native village corporation, he said. "If negotiations are not successful, it is our intent to condemn Segment 5, the Knikatnu portion."
The Alaska Railroad got similar news about state funding prospects at a different hearing Monday in which legislators signaled they may not be able to shoulder a federally mandated safety upgrade.