Alaska Senate passes capital budget with focus on school maintenance and housing

JUNEAU — The Alaska Senate advanced the $3.9 billion capital budget, which has an emphasis on school maintenance and housing, to the House on Friday.

The capital budget is used to fund infrastructure and maintenance projects across the state. The vast majority of capital budget funding comes from the federal government.

The capital budget passed the Senate 15-3 along caucus lines. Fifteen members of the bipartisan Senate majority voted to advance the capital budget. Three Republican senators, who don’t sit with the majority, voted not to approve it. Democratic Sens. Lyman Hoffman and Donny Olson had excused absences.

“There’s going to be a concentration on deferred maintenance across the state,” Sitka Republican Sen. Bert Stedman said when presenting the budget on the Senate floor. “There’s going to be a heavy concentration on K-12 schools. There’s going to be a concentration on University of Alaska infrastructure.”

The capital budget funds the top 15 school projects on the major maintenance list submitted by the Alaska Department of Education and Early Development at a cost of roughly $36 million. The top-scored project is to rehabilitate the Craig Elementary and Middle School on Prince of Wales Island.

Stedman said the House could fund more school projects down the maintenance list.

The top three school construction projects submitted by the education department would be funded in Minto and Mertarvik at a cost of $9 million. The Senate set aside $22 million for design and construction work for a replacement school in Toksook Bay.

The University of Alaska has a $1.4 billion deferred maintenance backlog. The university would receive $26.5 million to fund the top six major maintenance projects submitted by the university’s Board of Regents. Those include $4.4 million in repairs at the UAA Social Sciences Building.

Another priority in the Senate’s capital budget was to boost state funding for housing through the Alaska Housing Finance Corp. Funding would come from the corporation’s annual dividend to the state treasury.

”We have a dire need for housing across the state,” Stedman said on the Senate floor.

Around $30 million would be split between rebates for homebuyers for new energy-efficient homes; weatherization projects to help reduce power bills; and new housing in rural Alaska for teachers and public safety workers, among others.

“We’re very appreciative that there’s a real focus on doing something in these areas,” said Bryan Butcher, CEO of the Alaska Housing Finance Corp. “There’s not enough housing, not just in one area of Alaska. It’s true in urban Alaska, it’s even more true in rural Alaska.”

Other top-line items in the Senate’s capital budget include:

• $15 million to help fund a nursing facility at the Alaska Native Tribal Health Consortium, which is intended to alleviate pressure at the Alaska Native Medical Center.

• $7.5 million for SeaShare, a nonprofit based in Washington state, that would give fish to Alaska food banks and food pantries.

• $9.7 million to fund organizations like the Denali Commission to help write grants to capture more federal infrastructure funding.

The Senate typically takes the lead on the capital budget. House and Senate leadership agreed on the size of the capital budget earlier in the session: Dunleavy would have $250 million in state dollars to designate for projects, the Senate would have $200 million and the House would have $100 million. Most of that funding would be for statewide projects.

The Senate chose not to fund several of the governor’s requests, including a $6.2 million plane for the Department of Public Safety and $7.5 million to help upgrade the online application system for the Permanent Fund dividend. Funding was removed for the Alaska Gasline Development Corp., which supports building a long-sought natural gas pipeline from the North Slope.

Per the agreement, the 17 majority senators would have $50 million to split in funding for capital projects in their districts. Twenty-three members of the Republican-led House majority would have $25 million for their districts.

Wasilla Republican Sen. Mike Shower, who is not a member of the majority, said on the Senate floor that the Mat-Su had missed out on some of its share of projects because of that agreement.

“That’s not fair. That’s not balanced,” he said.

Shower, and other minority members, introduced proposed capital budget projects as amendments that were rejected by the majority of Senate members. Those could be added by members of the House.

Palmer GOP Rep. DeLena Johnson said in a Friday news conference that it doesn’t matter who’s in the majority. She said the Senate typically focuses on statewide projects and the House approves smaller, more specific capital project needs.

Hallway exchange

The House advanced the operating budget Thursday on to the Senate, with a roughly $2,300 Permanent Fund dividend and $175 million in extra school funding.

When accounting for the $550 million in capital budget spending, and legislation expected to pass, the House and Senate budgets combined would leave the state over $276 million in deficit. To balance the budget, the House’s proposed dividend is unlikely to survive negotiations with the Senate.

Last year, the Senate combined both bills and advanced the budget to the House on the last day of the legislative session. The Republican-led House majority was frustrated, and said members had less of a say in the capital budget.

To avoid a repeat of that this year, the operating and capital budgets were exchanged in the second-floor hallway in the state Capitol on Friday evening. That way, neither legislative chamber would have both budget bills at the same time.

Although it’s been a practice in the past, longtime Capitol watchers said it had been at least 15 years since the last hallway exchange of the two budgets.

A large group of lawmakers — including Kodiak Republican Senate President Gary Stevens and Wasilla Republican House Speaker Cathy Tilton — were on hand to watch budget bills being transferred between the two legislative chambers at 6 p.m. Legislators and legislative staff shook hands and hugged after the transfer was complete.

How they voted:

Sen. Click Bishop, R-Fairbanks (Y)

Sen. Jesse Bjorkman, R-Nikiski (Y)

Sen. Matt Claman, D-Anchorage (Y)

Sen. Forrest Dunbar, D-Anchorage (Y)

Sen. Cathy Giessel, R-Anchorage (Y)

Sen. Elvi Gray-Jackson, D-Anchorage (Y)

Sen. Lyman Hoffman, D-Bethel (E)

Sen. Shelley Hughes, R-Palmer (N)

Sen. James Kaufman, R-Anchorage (Y)

Sen. Scott Kawasaki, D-Fairbanks (Y)

Sen. Jesse Kiehl, D-Juneau (Y)

Sen. Kelly Merrick, R-Eagle River (Y)

Sen. Robb Myers, R-North Pole (N)

Sen. Donny Olson, D-Golovin (E)

Sen. Mike Shower, R-Wasilla (N)

Sen. Gary Stevens, R-Kodiak (Y)

Sen. Bert Stedman, R-Sitka (Y)

Sen. Löki Tobin, D-Anchorage (Y)

Sen. Bill Wielechowski, D-Anchorage (Y)

Sen. David Wilson, R-Wasilla (Y)