Alaska out $61 million in federal highway funds

State's delegation didn't realize bill had changed

Posted: Tuesday, May 25, 2004

ANCHORAGE - Alaska stands to lose $61 million in federal highway funds because of changes passed this year in the highway funding formula.

The state's congressional delegation earmarked special projects without realizing the cost of those projects would be subtracted from Alaska's federal highway allocation.

The state will lose nearly 20 percent of its $330 million in federal highway money.

"I think it was a total accident. ... They just wrote something wrong," Rep. Don Young, R-Alaska, said last week. "I don't think it was intentional at all."

The problem is the wording in an omnibus appropriations bill Congress passed in February. In the past, the state has gotten an "earmark" for funding projects in addition to its regular formula funds for transportation.

The new bill included wording that subtracted some of those earmarks from formula funds.

Stevens' office said the senator, who is Senate Appropriations chairman, was aware of the problem and has been working to fix it.

Meanwhile, state and city road officials are scrambling to figure out what to cut to make way for the earmarked items.

"The net effect is other projects will have to be delayed by a year at least," Jeff Ottesen, a state Department of Transportation manager. "There's projects (being put off) all across the state."

Some $49 million will be cut from work scheduled between now and when the new federal fiscal year begins Oct. 1, and the balance will be taken out of next year's federal highway allocation for Alaska, unless Congress remedies the situation.

"We're trying to spread the pain over two years," Ottesen said.

Among the projects that will be affected, the state will slow work on the Glenn Highway near Palmer and delay work on the Parks Highway from miles 41 to 44, Ottesen said.

In Anchorage, the state Department of Transportation will postpone a major resurfacing of Tudor and Muldoon roads, he said.

Most federal highway money is allocated among the 50 states according to formulas that allow the states to project and plan for certain amounts annually.

Members of Congress also identify specific transportation projects they want, and those are normally purchased with other, discretionary funds.

This is the first year a provision was included to deduct the cost of some earmarked projects, but not others, from the funds given to each state under the formulas.

With Stevens as the chairman of the Senate Appropriations Committee, Alaska gets the highest percentage addition to its regular highway dollars of any state and the second-highest dollar amount after Alabama, Ottesen said.

Young said House Speaker Dennis Hastert, R-Ill., and Majority Leader Tom DeLay, R-Texas, now don't want to fix the earmarking language because their states benefit from it.

"All of a sudden they've got a windfall in Illinois and Texas and they're saying, 'Why should we change it back to where it was?"' Young said.

Deputy state transportation commissioner John MacKinnon told regional directors to cut projects planned for the same part of the state where Congress earmarked other projects, and he said the state would deduct from every region a share of the costs of earmarked projects with statewide benefits.

Examples are $10 million designated for a road from the Kuskokwim River village of Crooked Creek to the Donlin Creek mine and $6 million for preliminary work on a bridge across Knik Arm.

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