Southeast Alaska legislators talk about spending surplus

Sen. Burt Stedman, R-Sitka, proposes fuel supplements for ferry system

Posted: Wednesday, September 28, 2005

WRANGELL - Southeast Alaska legislators on Tuesday discussed how to spend the state's expected general fund windfall from higher oil prices next year.

Sen. Albert Kookesh, D-Angoon, said it could be as high as $2 billion.

"As the state looks at the surplus, we should do something creative and long-lasting," said Kookesh, in Wrangell during the annual meeting of the Southeast Conference.

Ideas ranged from supplementing fuel on the Alaska Marine Highway System to creating an endowment fund for school operating budgets.

High fuel costs will be a major issue next session, lawmakers said. The ferry system continues to run in the red for a variety of reasons and desperately needs assistance, said Sen. Burt Stedman, R-Sitka.

"Look at the fuel cost per gallon. That alone needs supplementing," he said.

The senator said he does not know how much money will be set aside for the ferries but he said it would be significant enough to catch the public's attention.

Kookesh said he wants to put an end to politicians bickering in Juneau over school funding and set aside an automatic $1 billion a year for schools' operating costs. He said last year schools were underfunded at $4,900 per student. The figure should be about $5,120 per student, he said.

The governor earlier proposed spending $1 billion of the surplus to make a down payment on the state's 20 percent ownership of the natural gas pipeline it is seeking to build with North Slope oil producers. The total cost is estimated at $20 billion.

Ketchikan wants some of the money for a ferry to shuttle passengers between its airport and the city, said Jim Van Horn, aide for Rep. Jim Elkins, R-Ketchikan. Elkins was not able to attend after his recent liver cancer diagnosis.

A new ferry would cost $5 million to $7 million, Van Horn said. Ketchikan currently has two ferries with one aging and not able to meet U.S. Coast Guard standards. The city has federal funding to build a bridge to its airport, yet the project will take eight years.

The legislators also discussed ways to reinstate a municipal revenue-sharing program that was in effect for many years before being scrapped in 2003.

Stedman said he expects the governor to address this in his budget.

Rep. Bill Thomas, R-Haines, said he will continue to push his bill that would use earnings from the state's permanent fund to assist Alaska's many rural towns on the verge of bankruptcy. The earnings would not affect money set aside for Alaska residents' yearly dividend, he said.

• Andrew Petty can be reached at

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