House approves road bond bill

Reps also pass an act making sex tourism in Alaska a felony

Posted: Wednesday, May 04, 2005

The state would use about $193 million in bonds to pay for road construction and maintenance projects under a bill passed Tuesday in the House of Representatives.

The bill would spend $15 million annually from federal highway funds for the next 15 years to pay off the Grant Anticipation Revenue Vehicle or GARVEE bond debt, according to the bill's sponsor Rep. Kevin Meyer, R-Anchorage.

The bond package includes projects from Gov. Frank Murkowski's "bottleneck busters and roads to resources" proposal that originally was to be funded with money from the Alaska Permanent Fund.

Of the 23 projects listed in the bill, $10 million would be used to extend Glacier Highway in Juneau to the proposed Kensington gold mine, $10 million would pave a road between Hollis and Klawock on Prince of Wales Island in the panhandle and $9 million would go toward improvements to the Tudor-Bragaw intersection in Anchorage.

Rep. Berta Gardner, D-Anchorage, voted in favor of the bill but said it should have included money to ease congestion at the intersection of Lake Otis and Tudor in Anchorage.

"That's the worst intersection in the state," she said.

Rep. Jim Holm, R-Fairbanks, voted against the bill. After the floor session, Holm said he opposes borrowing the money and saddling future generations with debt.

Meyer said the state would earn interest from holding the $193 million while the debt is being paid down. The interest earned would save the state about $19 million, he said.

The federal government pays 90 percent of the state's highway construction and maintenance needs, while the state contributes 10 percent. The interest from the bonds would cut the state's obligation in half for a few years, Meyer said.

"These roads will take two, three, four, five years to build," he said. "We get the interest off of that money that we borrowed."

But Holm said if federal funds decline, it would make it more difficult to pay off the debt.

He also said that with numerous construction projects laid out in this year's capital budget, contractors in Alaska would not be able to handle the workload. That means the state would have to hire construction firms outside Alaska to help with the projects.

Meyer said the state has consistently received about $300 million to $400 million a year from the federal government for road projects and that if federal funding declines, the $15 million needed annually to pay off the bonds would not make much difference.

The bill passed 32-4, with two Republicans and two Democrats voting no. It needs a final procedural vote before moving to the Senate for consideration.

The House also approved a bill Tuesday making promotion of sex tourism in Alaska a class C felony.

The bill by Rep. Eric Croft, D-Anchorage, defines promotion of sex tourism as anyone who advertises or provides travel services for the sex tourism industry.

The bill passed 39-0 and now heads to the Senate for consideration.

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