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Gov. Frank Murkowski said Wednesday that a state grant to Juneau for a capitol design competition was "inappropriate" and should be returned.
"Clearly that was, in my mind, inappropriate authorization of funds. As governor, the responsibility rests with me and I accept the responsibility for the action taken by my administration," Murkowski said at a noon news conference.
Juneau received $94,500 of leftover Department of Transportation and Public Facilities money funneled from state projects that the Legislature had designated for maintenance, management and planning.
Jim Clark, the governor's chief of staff, said he was "sorry" for helping arrange the allocation, and Transportation Commissioner Mike Barton said, "It was a mistake."
The governor will be writing to Juneau Mayor Bruce Botelho to ask him to refund the money, he said. Botelho said he will recommend that the city comply.
The funding outlined in a transfer-of-responsibilities agreement was signed in February, ahead of the March 2 architectural contest. John Manly, spokesman for the Transportation and Public Facilities Department, said the grant was given because the city-proposed capitol would be built near government property.
The state grant was introduced Monday by Juneau City Manager Rod Swope at a Juneau Assembly meeting as a suggestion to pay for the design competition costs.
Legislators and the governor received notice of the appropriation late Tuesday afternoon, angering a number of lawmakers from Southcentral Alaska. The region has been in competition with Juneau to relocate the capital.
Rep. Carl Gatto, one of the most vocal opponents of the appropriation, said the money was given under the table to Juneau without the authorization of the Alaska Legislature.
"It's sad that special interests were able to find money somewhere and misappropriate it," Gatto said.
Last year, the Legislature voted not to give any state money from the operating budget to Juneau's effort to build a new capitol.
On Tuesday, as co-chairman of the House Transportation Committee, Gatto threatened to reduce funding from the Department of Transportation and Public Facilities. After the news conference Wednesday, Gatto still expressed a desire to possibly cut from the department's budgets.
"I think it's time to re-scrutinize DOT's budget and see if there are any more hidden accounts somewhere that make money available to special interest groups," he said.
The governor said the Transportation and Public Facilities Department has flexibility to use money for projects that are valued as a priority. But the department was wrong to designate this grant specifically to Juneau's capitol design competition, Murkowski said.
Mayor Botelho said he thought the grant was "entirely appropriate."
"We were under the assumption that the expenditure had the governor's support," Botelho said.
Botelho has worked closely with the governor's chief of staff, Jim Clark, but Murkowski has not taken a stance on the issue.
When asked directly if he supports Juneau building a new capitol, Murkowski responded: "That's a matter for Juneau to decide what kind of proposal and kind of capitol development they propose. Clearly state funds in that process are inappropriate."
The mayor said the $94,500 grant has not been spent, and he has called a special meeting of the Juneau Assembly today at 5 p.m. at which he will recommend returning the money. In the sense that it was money figured into the planning budget and now gone, it sets back the effort to build a new capitol, Botelho said.
So far, Juneau has spent $400,000 of its own money to conceive a new capitol. The mayor said he has not lobbied the state for financial support.
Andrew Petty can be reached at email@example.com