Gov. Bill Walker has unveiled a $4.2 billion state budget proposal that includes a new gasoline tax, the diversion of Permanent Fund earnings to government operations and the end of the Juneau Access project.
In other words, The Road is again dead.
“I am a builder by background and understand the importance of construction projects, but I am very concerned with our current multibillion-dollar fiscal crisis and must prioritize the need for fiscal resolution,” Walker said in a prepared statement.
The Alaska Legislature has allocated tens of millions toward the project, and Walker has proposed diverting the remaining $48 million to the Alaska Marine Highway and capital projects. Of that figure, $38 million would be available for reappropriation immediately; the remaining $10 million would become available once the project is formally closed.
The diversion will help the state close a multibillion-dollar budget deficit, but only slightly. Under Walker’s budget proposal Thursday, the deficit is $2.8 billion in fiscal year 2018, which starts July 1.
Ninety percent of The Road’s $574 million price tag was to be paid by the federal government, with the state required to pay the remaining 10 percent. After construction, Juneau’s road system would be extended to a new ferry terminal north of the Katzehin River. A short ferry ride would connect that terminal with Haines and Skagway.
Dick Knapp, president of Citizens Pro Road, was irate when he heard Walker’s decision.
“How could he say it’s the state budget?” Knapp asked. “Either he’s dumb, or he thinks we’re dumb. Pick one. Either he’s stupid, or he thinks we’re stupid, because that’s a non-reason.”
Knapp said the governor is passing up free, job-creating money from the federal government, and the state has already allocated or spent most of what it needs to build the road.
On the other side of the coin, Emily Ferry of the Southeast Alaska Conservation Council was ebullient when she spoke to the Empire by phone Thursday.
“It’s a great day,” she said.
SEACC favors the continued maintenance and expansion of the Alaska Marine Highway System. In 2006, it sent the Department of Transportation back to the drawing board with a lawsuit that said DOT didn’t adequately consider ferry system upgrades as alternatives to road construction.
“The governor made a really smart choice, especially when you consider that DOT’s own study said the road would cost $5 million more each year than the Alaska Marine Highway system,” Ferry said.
According to the state’s economic feasibility report on The Road, the state would pay more in absolute terms, but a road could support many more vehicles than even an upgraded ferry system, making it cheaper on a per-car basis. The state’s study contended that a road would make driving more attractive, bringing more cars to the route. SEACC and other groups disputed the state’s estimates.
“We just can’t afford to invest in a project that’s going to increase the state costs,” Ferry said.
The Federal Highway Administration and state of Alaska have already spent millions in planning and preparation for the road, but the state will not be required to repay the federal government, even though there’s no project, said Jeremy Woodrow, a spokesman for the Alaska Department of Transportation.
That’s because the federal government’s money wasn’t funding construction; it was funding a project to determine the best alternative for improving transportation in Lynn Canal, and that project now has an answer.
“The state’s best alternative right now is nothing,” Woodrow said. “It’s a ‘no build.’”
Walker’s budget proposal must be approved by the Legislature to become effective, but his approval of a “no-build alternative” means that even if the Legislature were to decide otherwise, the money would have no project to fund.
“I do think that the governor has made a good, fiscally responsible decision given our fiscal situation,” said Rep. Sam Kito III, D-Juneau, when contacted after the announcement.
Kito has opposed construction of The Road, and he said that given the state’s deficit, the project doesn’t make fiscal sense.
“There are better things out there to do with the money that’s available,” he said, and he pointed out that in addition to the money that’s been allocated but not spent, the state can sell the bridge pilings already purchased for the project.
He expects the state would earn as much as $10 million in a sale.
Rep. Cathy Muñoz, R-Juneau, and Sen. Dennis Egan, D-Juneau, each said they’re disappointed with Walker’s decision.
“I think the decision represents a major lost economic opportunity for our community and our region,” said Muñoz, who will leave office in January.
Before becoming a lawmaker, Egan worked for the Alaska Department of Highways, a predecessor agency to the Department of Transportation. He remembers when Gov. Jay Hammond canceled a highway that ran along the west side of Lynn Canal.
“I didn’t look at it as a way out of here,” Egan said of that project and the just-canceled successor. “I looked at (Juneau) Access as a way into the capital.”
Mayor Ken Koelsch likewise said he was disappointed with the governor’s decision. In a prepared statement, he said, “Today’s announcement feels like a body blow.”
Rep. Justin Parish, D-Juneau, will replace Muñoz in the Capitol when the Legislature convenes in January.
He said he didn’t care for the road option the Department of Transportation had proposed, but now he has to find jobs for people who otherwise might have been employed in construction of the road.
“I wasn’t terribly impressed with the plan to build a road to a ferry terminal, but now I’ve got to scramble to make sure Juneau doesn’t continue to lose jobs,” he said.
Parish, Egan, Kito and Muñoz each said they want to ensure that money diverted from The Road stays in Southeast Alaska, and the governor appears to feel the same way. The formal text of the bill reappropriating the money states that the appropriations will be “reappropriated to the Department of Transportation and Public Facilities for enhancement of transportation and infrastructure in the greater Lynn Canal area.”
Parish and Egan each said they’d be open to the idea of spending some of the money on improvements to the notorious Fred Meyer intersection on Egan Drive, or for a second bridge across Gastineau Channel.
“We have a lot of major projects here that can use that herkin’ money,” Egan said.
The two Alaska-class ferries under construction in Ketchikan will directly benefit. DOT’s Woodrow said those ships need a little over $4 million to purchase needed equipment, such as life rafts, before they enter service.
He added that even though the Juneau Access project is dead, the idea of a road out of Juneau will not go away.
“It doesn’t mean the project is dead forever, or the concept is dead forever,” Woodrow said.
The research compiled during Juneau Access will remain on file, ready to be used the next time someone proposes a road out of Juneau.
And if history is any guide, that next time is inevitable. Since 1905, there have been three significant plans and almost one dozen lesser attempts to build a road out of Juneau.
• Contact reporter James Brooks at 523-2258 or james.k.brooks@juneauempire.com.
