Legislature(2007 - 2008)BUTROVICH 205
02/05/2008 01:00 PM Senate TRANSPORTATION
Audio | Topic |
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Start | |
SB218 | |
SB236 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
+= | SB 218 | TELECONFERENCED | |
+= | SB 236 | TELECONFERENCED | |
+ | TELECONFERENCED |
1:56:00 PM CHAIR KOOKESH announced consideration of SB 236. FRANK RICHARDS, Deputy Commissioner, Department of Transportation and Public Facilities (DOTPF), Juneau, AK, said he would describe Alaska's transportation system and how the state is constrained in addressing its aging assets. He said he would describe what other states are doing on their highways and roads, and present Governor Palin's approach to meeting Alaska's transportation needs with an Alaska Transportation Fund. MR. RICAHRDS said the existing infrastructure across Alaska presents safety concerns across the board from fatal accidents to seasonal closures of airports. This significantly impacts the flow of goods and people. There is congestion in larger communities affecting everything from commuters to the movement of freight and school busses. The state's assets are deteriorating because of limited funding. He displayed photos of highway pavement to demonstrate its poor condition. He estimated the backlog of pavement that has reached the end of its useful life is approaching $300 million on the national highway routes. This is 2,100 miles of highway that include the Glen Highway, the Parks Highway, the Richardson Highway, the Sterling Highway, the Alaska Highway and the Dalton Highway. The pavement deterioration on these highways alone is growing at a rate of $80 million a year. Other routes like the Alaska Highway System and the Community Transportation Program which include locally owned roads present an additional need. He estimates that for every dollar of timely pavement lifecycle investment, $4 of extensive repair costs can be saved. It will be difficult to put into place with such a large backlog of nearly failed pavement. MR. RICHARDS said there are also needed bridge repairs although progress is being made. Work on Washington Creek Bridge is almost completed as well as on several Parks Highway bridges, the Hicks Creek Bridge, the Kenai River Bridge in Soldatna, the South Channel Bridge in Unalaska, and the Tanana River Bridge on the Alaska Highway. Bridges in Hyder and Gustavus are scheduled projects this year if the necessary environmental permits can be obtained. About 10 percent of the bridges need seismic retrofits. To date DOTPF has spent almost $20 million doing the work in Phase 1. Phase 2 will be much more expensive. Only one or two projects can be done per year. He said transportation assets are also being impacted by changing climatic conditions including heavy precipitation, greater frequency of strong storms, warmer summers and extended seasons that increase the number of freeze/thaw cycles. 2:00:43 PM CHAIR KOOKESH asked him to address the bill with respect to the endowment MR. RICHARDS said the governor has proposed two installments into an endowment fund, $500 million in fiscal 2008 and $500 million in fiscal 2009, to create a corpus of about $1 billion. That fund would be invested through the Department of Revenue and the interest earned would then be used to fund transportation needs across the state and address all modal issues, from ports and harbors to airports and highways. It would be a fund source the legislature would appropriate to cover specific projects that DOTPF would nominate through the capital budget process. CHAIR KOOKESH asked if the committee was being asked to adopt a fiscal note. He said he was confused by all the zeros. MR.RICHARDS referred the question to the administration services director, Nancy Slagle. 2:02:31 PM NANCY SLAGLE, Director, Administrative Services, DOTPF, Juneau, AK, said she would expect an appropriation specifically for the $500 million to capitalize the fund. This bill creates the fund. The zero fiscal note is basically saying that DOTPF will administer the program by identifying projects within the organization. CHAIR KOOKESH asked if that means this bill would establish the fund and then an appropriations bill will follow to fund it. MS. SLAGLE said that is correct. SENATOR OLSON asked if this will decrease the state's ability to get federal funds for big projects. MS. SLAGLE said the bill will not impact the ability to get funds from the federal government. Other states are trying to deal with the decrease in federal funds by different means like increasing fuel taxes, bonding and tolls. This is an approach the governor thought was appropriate for Alaska. SENATOR WILKEN asked to look again at slide 17 again to see what other states have done. He asked if Alaska is the only state that doesn't have a general fund component for transportation and asked if this is correct. MR. RICHARDS said that is correct. All 49 other states have a transportation fund. SENATOR WILKEN asked Mr. Richards to discuss slides 17-21 and 26 for some background. MR. RICHARDS said that Alaska has been fortunate to receive almost $6.44 of federal highway funds for every dollar that is spent at the gas pump. Re-authorization of the highway bill will take place in 2010. The emphasis in a new bill will be on greenhouse gas reduction. As a recipient state, Alaska will likely see a significant reduction in what it receives. The new national commission that was charged to look at the next re- authorization released a report last week that proposed a complete makeover of the whole federal transportation system. 2:07:01 PM SENATOR WILKEN asked if the expectation of funds coming to Alaska from offshore will be less. MR. RICHARDS replied that is correct. He indicated on the chart what other states have been receiving and how they are funding their transportation needs. Other states fund approximately 70 to 80 percent of their transportation needs using funds they collect through fees and other structures like gas taxes, tolls, and public/private partnerships. They rely on 20 to 30 percent of federal funds. In Alaska, state ownership is about 40 percent. The types of funding used by other states would be difficult to institute in Alaska with its small population base. The strategic advantages of having a state-funded program are that projects can be completed faster which equates to being less costly. Federal laws don't have to be followed. For example, NEPA (National Environmental Policy Act) is avoided if there are no federal actions involved such as wetlands permits. Preventative maintenance could avoid the NEPA process if federal funds are not involved. Another demanding law that would be avoided is specific to DOTPF funds and applies to recreational refuge and historic properties. Slide 21 identifies a typical project with a federal timeline of seven years; each phase of a project in a federal program must be completed before the next phase can begin. For example, an environmental phase which averages three years must be conducted before a right-of-way phase can begin. The benefit of a state- funded program is that many of these processes can be conducted concurrently. For example, DOTPF saved three years time on the Dalton Highway and two years on the Elmore Road. CHAIR KOOKESH asked if those were federally funded projects. MR. RICHARDS said they were all state general funded projects. MS. SLAGLE added that there have been some federal projects along the Dalton Highway. SENATOR WILKEN asked Mr. Richards to discuss slide 26. MR. RICHARDS said that individual project appropriations don't allow the DOTPF to develop a programmatic approach. In lean years appropriations have been small. This in turn impacts the construction, design and engineering communities because there isn't a consistent approach to keep the work flowing and folks employed. The $50 million generated by the Alaska Transportation Fund would give the DOTPF the ability to have a systematic approach. With individual appropriations an estimate in year one for a project might, because of inflation, run out of money by year five. When that happens it's necessary to return to the legislature to ask for additional funds. 2:13:56 PM MR. RICHARDS said that with a programmatic approach it would be possible to cover those increased costs by shifting funds from one project to another. It would be more efficient and would result in substantial savings. That would be similar to what's done with federal highway and federal aviation programs. He noted that to raise an equivalent $50 million would require raising the existing gas tax 150 percent, from eight cents to twenty cents. CHAIR KOOKESH asked where the $50 million came from. MR. RICHARDS said that is the initial revenue stream that would be seen in the first year. SENATOR COWDERY asked what process would be used to prioritize the projects. MR. RICHARDS explained that DOTPF would develop a listing of projects similar to the STIP (statewide transportation improvement program). In individual years the projects would be submitted to the legislature for appropriation. SENATOR COWDERY asked about funding for the Alaska Marine Highway. MR.RICHARDS said that is one of the transportation modes in the state and it would be eligible to receive money from this fund. AVES THOMPSON, Executive Director, Alaska Trucking Association (ATA), Anchorage, AK, said the organization represents trucking th interests from Barrow to Ketchikan. It is celebrating its 50 anniversary in 2008. It represents more than 200 member companies throughout the state. Trucking employs over 21,000 people in Alaska. It pays more than $928 million in wages annually and makes a huge contribution to the state economy. One of the priorities of the ATA is to expand the DOTPF general fund capital projects program. It's clear that federal funding will not meet Alaska's transportation infrastructure needs. Given the enormous tax revenue increases, Alaska needs to invest some money in the state's transportation system. MR. THOMPSON said the transportation endowment fund can serve as a primary funding source to enable significant expansion of the state general fund capital projects program. The description on page 1, lines 13-14, is broad and covers a lot of different projects. The highway trust fund has been depleted partly because of the heavy demand coming from projects not related to highways highway projects. The federal highway trust fund will run out of money in 2009. Although there are modes of travel other than highways in Alaska, it seems that Alaska's highway system serves the largest portion of the population. Freight movement and tourist and personal travel are on the rise and demands will continue to grow exponentially. The largest share of the project dollars made available through this fund should be directed to the highway system. Non-highway projects need to be considered on their own merits after seeking other sources. In Alaska there are two major highway systems, the National Highway System and the Alaska State Highway system. These are systems of connecting routes that link communities and workplaces. They are the major routes that carry a large portion of all the freight delivered in Alaska. ATA supports SB 236. 2:22:16 PM CINDY BETTINE, Member, MatSu Borough Assembly, Wasilla, AK, said she represents District 5 which has two of the most dangerous roads in the state according to DOTPF, based on accidents and death. She supports SB 236 and hopes the funding will amount to more than $6 million a year. MatSu is one of the fastest growing areas of the state, she said, and taxpayers contribute over $10 million a year. Because of the population growth and the over use of state roads, local roads are taking a beating. What were originally developed as residential subdivision roads are now used for short cuts between state roads. One of their trunk roads has had priority for over 20 years and over the intervening years, the cost has escalated to over $40 million. Utilities have been moved. Rights-of-way have been purchased. 2:24:56 PM MARIAN ROMANO, Borough Manger, MatSu Borough, Palmer, AK, said she supports this bill but said it is not enough to meet the present needs of the state or even the MatSu Borough. One third of the state's network is in the MatSu Borough. The borough has three of the most dangerous roads in the state, according to accident data from DOTPF. There were five fatalities in January on state roads. Their recent long-range transportation plan shows that $1.5 billion is needed over the next 20 year to prevent gridlock. Asphalt has tripled in price and the cost of right-of-way acquisition in the MatSu Borough has doubled. The borough has already spent $12 million on the Seward Meridian Highway. It has identified the right-of-way, but there is no money to purchase it. This puts home owners in a position where they can't sell their houses and therefore, cannot afford to buy another house. This is a critical north/south artery and has been on the list for 20 years. It provides access to a new hospital and to the college which is currently expanding and taking on four-year students. The population of the Kinick/Goose Bay Road area is considered equal to the fifth largest city in the state. This is a main access road to the new state prison. DOTPF doesn't have this road on its list. The borough is taxing itself to meet its own needs. There is a local contribution of $6 million to local roads and the community provides gravel for free to DOTPF. She suggested the committee consider matching programs to recognize communities' willingness to use their own resources. 2:29:25 PM SENATOR WILKEN moved SB 236 from committee with individual recommendations and attached fiscal note(s). There being no objection, the motion carried.
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