Corps of Engineers projects quietly fuel Alaska economy

Construction work amounts to $2 billion in the past five years

Posted: Tuesday, November 18, 2008

ANCHORAGE - It's kind of like a big, invisible hand in Alaska's economy.

A hand that has guided more than $2 billion of construction around the state over the past five years, overseeing everything from toxic waste cleanups at abandoned military sites to the building of new harbors.

Yet the Army Corps of Engineers' projects here are obscure to many Alaskans, economists say.

"Nobody knows what they do unless they are involved," said Scott Goldsmith, an economist at the University of Alaska Anchorage.

The Corps is part of the Army, but beyond military work its responsibilities include construction around navigable waters, flood control and other engineering work.

With the slump of housing construction right now and the recent loss of hundreds of construction jobs around Alaska, the Corps' projects might be one of the few bright spots for that industry next year, said Neal Fried, a state labor economist.

"It's a big piece of the action, no doubt," he said.

"You call any engineering firm. They are all working on Corps projects," Fried said.

Suppliers, trucking firms and other businesses are benefiting too, he said.

So what is the recent trend in Corps of Engineers spending?

On one hand, its budget for Alaska projects, which has three main legs - military, civil and toxic cleanup work - has declined significantly from its peak in 2005 and 2006.

Those years were huge for military projects in Alaska due to the Middle East conflict-related influx of troops and infrastructure - jets, hangars, barracks, family housing and clinics.

Spending plummeted in 2007. But Congress recently approved a budget that will fund a modest increase in military construction in Alaska during the next year, mainly to add equipment and shelters for Elmendorf's new F-22 fighter jets.

Congress approved about the same level of spending for toxic-waste cleanups in Alaska as it did last year - roughly $25 million. These cleanups often involve old diesel spills, rusty fuel drums and dumps of toxic chemicals at former military sites.

The Corps' spending for civil projects won't be finalized until next spring.

Underpinning some of this spending are earmarks - a term that became a dirty word during the recent presidential race. Earmarks are special items that members of Congress insert into spending bills to pay for projects they favor - a bridge, barracks or building, for example. Though earmarks typically account for a low percentage of federal spending, they have become symbolic of government waste and cronyism.

Public scrutiny of earmarks has increased in recent years, but Congress hasn't stopped using them.

Alaska's Sen. Ted Stevens is legendary for his sway over federal spending and earmarks.

Though he no longer chairs the powerful Senate Appropriations Committee, and despite the bad publicity this year from the federal corruption charges on which he eventually was found guilty, Stevens was the biggest "earmarker" in the spending bill that Congress passed in September, according to the Washington, D.C.-based advocacy group, Taxpayers for Common Sense.

In that bill, Congress approved 2,321 earmarks worth $6.6 billion, according to the Taxpayers for Common Sense. Stevens secured $239 million of the total, a larger share than any other member of Congress.

So how much of the Corps' Alaska budget came from earmarks? Roughly 20 percent, overall, over the past five years.

In those years, earmarks for Corps' work in Alaska accounted for:

• 15 percent of the Corps' military construction budget.

• 48 percent of the toxic waste cleanup budget.

• 50 percent of the civil construction budget.

However, next year, the contribution from congressional earmarks to military construction and toxic waste cleanups in Alaska will be significantly less than it has been in the previous five years, according to the Corps' budget figures.

A big wild card next year is Corps' spending on civil construction.

These are the Corps projects most visible to Alaskans - from erosion control in Kivalina to dredging ship channels in Cook Inlet near the Anchorage port.

If Congress wiped out earmarks, the civil construction budget in Alaska could be half of its historical levels.

"If all of a sudden (Congress) stops earmarks cold turkey, yeah, we'll look at what projects we are working on and whether we have too many staff for the amount of work," said Steve Boardman, the chief of the Corps' Alaska district's civil-project branch.

So far, it doesn't look like that will happen.

In fact, some Democrats are talking about pouring more money into public-works projects around the country next year to try to improve the nation's troubled economy.

President Bush requested $25.2 million for civil projects in Alaska. The House of Representatives increased that amount to $25.6 million. The Senate bill nearly doubles it: $45.6 million. A final bill isn't expected until March.

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