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Stevens: Federal help is waning

Senator tells lawmakers that Alaska may have to shoulder more costs

Posted: Tuesday, March 20, 2007

Alaskans, facing the prospect of less federal funding, may have to pick up more of the costs of running the state, U.S. Sen. Ted Stevens told the state Legislature on Monday.

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Many in Alaska have long been accustomed to the federal government's picking up a big part of the cost of state projects, in part because of the Republican senator's longtime tenure as chairman of the Senate Appropriations Committee.

Alaska lost some of that clout when Stevens and Rep. Don Young, R-Alaska, lost their chairmanships this year, as the Democratic Party won control of both houses of Congress.

When Alaska was a new state, and before it became an oil exporter, it requested and received a great deal of federal assistance, Stevens said.

"As a young state, Alaskans sought help from the federal government, which responded," Stevens said.

At the same time, he said, the Alaska Permanent Fund continues to grow, leading other elected officials to question whether the state should continue to get as much as it does from the federal government.

"It is harder and harder to fulfill federal funding requests of our state, and will continue to be so," Stevens said.

Since the state has $37 billion socked away, both appointed and elected officials from other states are questioning why Alaska doesn't finance a bigger share of projects here, he said.

"Many take note in the billions of dollars in our permanent fund," he said.

With increasing demands on the federal treasury for homeland security and the wars in Iraq and Afghanistan, funding will be increasingly difficult to obtain, and more local matching money will be demanded.

The federal government has invested $100 million in the Denali Commission without a significant contribution from the state; and Alaska is one of only 14 states that don't contribute to operation of community health centers, he said. The Denali Commission is a federal-state partnership designed to provide utilities, economic support and infrastructure throughout the state.

Gov. Sarah Palin is aware of the changing circumstances and is taking Stevens' warnings to heart, said spokeswoman Sharon Leighow.

"The state is currently looking at restructuring its budget to maximize federal matching funds," she said.

State and local support for projects will show federal funders that projects have merit, Stevens said, and the state already has taken some positive steps.

Stevens also praised the state's support for renewable energy projects, praising a geothermal energy project at Chena Hot Springs and a loan program to help build small renewable energy projects in communities struggling with exorbitant power costs.

"I really congratulate you for your vision on this," he said.

Solving those problems could free up state money for spending elsewhere, he said, instead of being used to subsidize fuel costs in remote communities.

"In a few short years the power-cost-equalization program could be a thing of the past," he said.

• Pat Forgey can be reached at patrick.forgey@juneauempire.com.



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