Public calls for more in capital budget

SE testimony on SLAM, medical center, revenue-sharing
Juneau Mayor Merrill Sanford testifies in front of the Senate Finance Committee on behalf of funding for Juneau on Monday as Rep. Cathy Muñoz, R-Juneau, watches from the gallery.

Legislators cut tens of millions of dollars from Gov. Sean Parnell’s state operating budget proposal and have expressed their desire to keep the capital budget small compared to previous years.


But public testimony Monday suggested that in order to constrain the size of the capital budget, which allocates state funding for projects around Alaska, lawmakers will have to say “no” to a lot of people.

The Senate Finance Committee accepted public testimony from across the state Monday afternoon, with many of those who testified asking legislators to add more funding into Parnell’s $796 million capital budget proposal.

One persistent theme espoused by mayors and municipal staff from several communities, including Juneau and Sitka, was a desire for more money in community revenue-sharing.

In recent years, the state has supplemented a base amount of $60 million for community revenue-sharing. The Alaska State Legislature provided $25 million in supplemental funding last year, for a total of $85 million to be distributed to communities throughout Alaska.

This year, Parnell’s draft budget did not include the $25 million supplemental funding.

The mayors made it clear they want that money back in the capital budget this year.

“As you know, these funds help all of us get through the hard times,” Juneau Mayor Merrill Sanford told the committee. “During the better years, they help us with needed projects that we have in our own municipalities. To some of our smaller communities, it is the only basic funds they receive. So it’s very important that you do your due diligence on revenue-sharing.”

Sanford said Juneau stands to receive $850,000 from the $25 million supplemental funding on top of the $2 million it receives from the $60 million base amount. If state and federal support decreases, he warned, the City and Borough of Juneau could be forced to cut services.

“You who came up through the ranks — school board members, assembly members, mayors — know how important this is to our individual communities,” said Sanford, asking the senators to put the $25 million into the budget.

Sitka Mayor Mim McConnell framed the issue as “a matter of fairness and equity” between Alaska’s rural communities and more developed areas.

“For small communities in Southeast Alaska who are neither benefiting from tourism nor energy development, municipal and supplemental revenue-sharing is not just critically imperative, it is a matter of fairness and equity in ensuring that Alaska does not become two states within a state: one state of communities of increasing affluence, and another state of increasingly desperate rural poverty,” McConnell said.

Members of the public also testified on a range of projects they asked to have funded in the capital budget, with a recurring theme in several Southeast residents’ testimony being increased support for the State Library Archives Museum, or SLAM.

Construction workers in Juneau’s Willoughby District broke ground in January on the SLAM project. The project’s goal is to provide a new space for the Alaska Division of Libraries, Archives and Museums and bring all three components under one roof.

Parnell’s draft budget includes $20 million for SLAM, which is scheduled for completion by early 2016. But $50 million is needed for the project to be fully funded.

Supporters said Monday that unless the Alaska State Legislature comes up with the additional $30 million, SLAM will face delays and cost increases.

“Let’s finish it,” said Juneau resident Marie Darlin. “Let’s not continue to piecemeal it. It will save us money, and it’s one way to spend money to save money.”

Anchorage Republican Sen. Kevin Meyer, co-chairman of the Finance Committee, responded, “We hope to finish a lot of projects that are kind of in the starting phases — it’s just that there’s a lot of them.”

“I know there is,” Darlin replied.

Indeed, several people from Cordova testified to ask for $7.7 million from the state to finish a community center in their city; people from Kodiak asked for funding for a water treatment plant; and, in Southeast, people from Ketchikan and Petersburg said some of their basic facilities are no longer adequate for community needs.

Ketchikan Mayor Lew Williams III and others asked senators to commit $20 million toward reconstruction of the PeaceHealth Ketchikan Medical Center.

“If this project is not forthcoming, the ability of Ketchikan to continue providing this level of health care to the region will be in serious jeopardy,” Williams warned.

Dr. Peter Rice, medical director of the PeaceHealth Medical Group, said that with an aging hospital that does not meet industry standards, it is “extremely difficult” for Ketchikan to recruit and maintain surgical staff.

“This project is a must-do, and if we are not able to launch this project this year, I am fearful that we will risk losing surgical and orthopedic specialists, which ultimately could end up with a reduction in surgical services in southern Southeast Alaska,” said Rice.

Testimony from Petersburg painted a dire picture as well.

Petersburg Police Department Chief Jim Agner testified to ask the Legislature to provide funding for the Petersburg Borough to replace its police station, which he called “the worst public safety facility in the state of Alaska,” adding that “probably it’s a good bet it’s one of the very worst facilities in the nation.”

Agner said the building had been flooded with raw sewage Monday morning, describing it as “not an uncommon occurrence.” He claimed the structure is at risk of collapse due to unsafe structural modifications.

Agner and Petersburg Public Safety Advisory Board member Sally Dwyer said they are seeking $7 million for a new police station.

“We have identified a spot that the (borough) has and owns the property for … that would be perfect for a new police (station), and all we need is money, guys,” Dwyer said. “And we need your help.”

In addition to the requests for legislative support of state and municipal building projects, some who testified asked to have money for their organizations’ capital projects included in the budget.

The president and chief executive officer of the Southeast Alaska Regional Health Consortium testified to ask for state funding to help build a clinic in Hoonah.

Charles Clement said $6 million out of about $8 million SEARHC needs for the clinic has been “lined up,” but that unless the state makes up the difference with $1.9 million in this year’s capital budget, that existing commitment could dry up.

“We have the cash ready to go,” said Clement. “We have the land acquired. We have the designs done. If we can acquire this last bit of appropriations, we’ll be under construction this summer.”

Parnell’s capital budget proposal, which was the subject of Monday’s testimony, includes $796 million in undesignated general funds. The total amount of the proposal is almost $1.87 billion, with most of the difference being made up by federal receipts.

Contact reporter Mark D. Miller at 586-1821 or at


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