On the road to highway funding changes — ‘Donor’ states decry Alaska’s disproportionate receipt of transportation money

By Jenny Neyman

Redoubt Reporter

Alaskans have it good when it comes to federal funding for highway projects. That may not seem to be the case while rattling along the ruts in the Sterling Highway heading east out of Soldotna, or bottoming out on the frost heaves and dips that never quite seem to be evened out on the Sterling flat.

Alaska is a “donee” state, getting $6 back in federal highway funding for every $1 Alaskans pay in gas taxes. That’s not the case for “donor” states, such as California or New York, which get less funding back for the dollars residents pay in gas taxes. It’s an inequity in the way funds from the national Highway Trust Fund are allocated to states, based on formulas in the Surface Transportation Authorization Act.

The inequity is likely to soon change, which will reduce the amount of federal funding Alaska gets for national highway projects.

“It has been scrutinized recently by a lot of the states, such as California and New York. Many of these states certainly, during the recession here, face difficult financial situations, and the donor states look at the donee states getting that massive return of money, of partially their funds,” said Dave Post, central regional planning manager for the Alaska Department of Transportation and Public Facilities.

Though a change in the reimbursement funding formulas will mean fewer dollars for Alaska, Post said the system of funding does need to change, because the current formula is not working.

“Twice in the past two years, the Highway Trust Fund has basically gone insolvent,” Post said.

In 2000, the Highway Trust Fund had about $20 billion in it, but that amount slipped to under $1 billion, necessitating Congress to step in twice in the last two years to transfer general funds into the Highway Trust Fund to keep the highway-funding program from essentially going bankrupt, Post said.

“We know that the funding formula is likely to be changed. It needs to be because the current one hasn’t worked for the last two years,” Post said. “We know that the donor states, once again, are scrutinizing the amount of funds likely to go to Alaska.”

The current Surface Transportation Authorization Act, passed in 2005, is due for an overhaul by Congress, and actually expired at the end of September.

How that overhaul shakes out could have a drastic impact on funding for transportation projects in Alaska, because the state is overwhelmingly dependent on federal dollars to maintain, repair and construct highway projects.

“Basically, we don’t have a state highway program. We don’t receive state funds on a regular basis for capital improvements. We’re entirely reliant for our programming purposes on the federal funding,” Post said. “(Congress) is in the midst of revising the transportation authorization bill. That defines how we go ahead and spend money over the course of the next four years. We’re not really sure at this point in time how much money, total, we’re going to get from the feds, over the course of the next four years.”

Alaska ranks roads projects needing funding through its Statewide Transportation Improvement Program list. The Federal Highway Authority approves, or not, funding for the projects, covering 90 percent or so of the cost. But there’s only so much money allocated to Alaska to cover highway projects in the state, no matter what priority they’ve been given on the STIP list. If that amount of money declines, as it likely will when Congress gets to revamping the transportation reimbursement formula in the next year or two, that may particularly affect projects coming up in the near future, because they were developed and budgeted for under the current funding system.

“Our current projections are kind of based upon the status quo, but it might be kind of on the optimistic side,” Post said. “… We’re probably going to be programming somewhere in the near future between $100 million and $200 million on the national highway system, but we don’t know how much money we will get over next four-year period until Congress authorizes the next version.”

According to the state’s draft STIP list for 2010 to 2013, the average yearly funding for the 2001 to 2003 STIP was $404.93 million, average yearly funding for the 2004 to 2006 STIP was $478 million, and average yearly funding for the 2007 to 2009 STIP was $296.9 million.

If federal highway funding comes in at less than expected, DOT will face some difficult choices in prioritizing and designing highway projects, Post said.

“It would have the effect of postponing projects under way. Decisions will have to be made which have not yet been, that we’ve not needed to address. If it’s less funding than we had anticipated in the development of this STIP, we’re going to have to revisit what it was that we had to spend money on in any given year and figure out what we have to cope with on any given amount,” Post said.

On the Kenai Peninsula, refiguring the federal Highway Trust Fund allocation formula could affect funding for a project that would revamp a portion of the Sterling Highway from Mileposts 58 to 79, including wildlife-vehicle collision mitigation efforts, like fencing and underpasses for wildlife to cross safely away from traffic.

Mike Hall, a state DOT representative in charge of that project, said he hopes to start work in 2011. If that’s the case, funding probably won’t be affected. But any number of factors could delay the project into a time frame where funding could be affected. The Kenai National Wildlife Refuge and DOT need to agree on measures to mitigate vehicle-wildlife collisions. That hasn’t happened. And the project needs to have its National Environmental Policy Act document reviewed, since the original was done in 2005. If the NEPA document review passes without change, the project could move right on forward, but if new data from a wildlife migration study initiates a decision to do an environmental assessment of the project, or a full-blown Environmental Impact Statement, that will add years onto the timeline.

“Funding could impact that project. We may consider delaying or postponing it, or we would impact other efforts in order to keep that one going ahead,” Post said.

“It depends upon how Congress chooses to fund us in the intervening time frame, until the next highway authorization bill is passed. It depends on when that bill is passed if (the Sterling Highway project) is impacted by that.”

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1 Comment

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One response to “On the road to highway funding changes — ‘Donor’ states decry Alaska’s disproportionate receipt of transportation money

  1. Matt

    I wonder if Alaskans will like having to pay their own way for a change. Palin made it seem like Alaskans were rugged, independent foes of big government. Clearly not the case. Sorry that northeast liberals aren’t interested in paying for small government “conservatives” up north anymore.

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