Voters may be asked to approve more than $315 million in bonds to pay for new roads and other transportation projects.
Despite being flush with plenty of spending money (latest revenue forecast: $8.6 billion for this fiscal year), the governor proposed bonding $140 million for new transportation projects, a figure lawmakers have since jacked up to $315 million.
Juneau's slice of the pie is currently at $5 million, earmarked to make the intersection at Glacier Highway and Back Loop Road safer. That's up from earlier in the budget process when Juneau's share was at zero.
In Gov. Sarah Palin's original proposal, Juneau would have shared $15 million with the rest of Southeast Alaska for repaving, but that amount was moved into the capital budget.
Coupled with her proposal for transportation bonds, Palin suggested voters decide whether to approve $100 million in bonds for a new crime lab in Anchorage. That proposal hasn't seen the light of day since early February.
Palin's budget director, Karen Rehfeld, said the $240 million total in what are called "general obligation bonds" comes out to about $20 million in debt repayment over 20 years, which she said was a reasonable amount the state could afford to pay.
Rehfeld said securing the bonds as a small part of the overall budget allows voters to have a say in approving projects and added that it's a good time to borrow money.
"You can borrow pretty cheaply," Rehfeld said.
Rep. Beth Kerttula, D-Juneau, said with borrowing costs so low, this was a good time to issue bonds to build projects. At the same time, additional money could be socked away in investment accounts where it will earn higher returns and be available if needed.
Rehfeld said Palin's comfort level would "change dramatically" if the total amount of the general obligation bonds went north of $300 million.
The bill passed the Senate Saturday with the help of Sen. Kim Elton, D-Juneau. He said he voted for the bill despite his objections to it because compromises have to be made to get an overall budget passed as the legislative session finishes up.
Though not a "perfect solution," Elton said, "we end up with a recipe everyone can live with."
Funding road projects with bonds makes it seem the contentious capital budget is smaller, said Rep. Kevin Meyer, R-Anchorage, co-chair of the House Finance Committee responsible for the capital budget.
"We're going to try to count that separate so it doesn't count toward the whole total," he said.
Saturday evening the House of Representatives authorized spending the $315 million. House Speaker John Harris, R-Valdez, assured legislators that if the voters do not approve the bonds, the money will not be spent.
Contact reporter Alan Sudermanat 523-2268 or e-mail firstname.lastname@example.org.
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