Legislature(2005 - 2006)

2005-01-14 Senate Journal

Full Journal pdf

2005-01-14                     Senate Journal                      Page 0060
SB 46                                                                                             
SENATE BILL NO. 46 BY THE SENATE RULES COMMITTEE                                                    
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                  "An Act making capital appropriations and                                        
            appropriations to capitalize funds; and providing for                                  
          an effective date."                                                                       
was read the first time and referred to the Finance Committee.                                      
Governor's transmittal letter dated January 12, 2005:                                               
Dear President Stevens:                                                                             
The capital budget bill delivered today contains my proposal for the                                
2006 fiscal year.                                                                                   
As you know, a capital budget is how a government meets one of its                                  
most basic infrastructure responsibilities to citizens, that of ensuring                            
safe roads, schools, and state facilities.                                                          

2005-01-14                     Senate Journal                      Page 0061
Overall, the capital budget totals a little over $1 billion of which $825                           
million will be supported by federal funds.  Of this, $518 million in                               
federal transportation funds are proposed for road, highway, ferry, and                             
airport projects throughout Alaska.  Another $134 million of primarily                              
state funds is proposed to tackle the state's backlog of deferred                                   
maintenance, which ranges from repairs to Pioneers' Homes and                                       
correctional facilities to fixing state roads, airports, and harbors.  It                           
also includes $30 million to fund priority major maintenance in                                     
schools around the state.                                                                           
The capital budget also includes $145 million in state funds for two                                
major transportation initiatives.  The first is $37 million for                                     
transportation projects that will provide access to some of our natural                             
resources so economic development can take place and create good                                    
jobs, especially in rural Alaska.  Another $108 million is proposed for                             
projects that will help relieve congestion in Alaska's more populated                               
In addition to maximizing federal funds, the administration is looking                              
at ways to leverage limited state funds.  Using the bond capacity of                                
state corporations is one way to stretch state dollars in the short-term                            
and still enable us to meet the state's responsibilities.  At the same                              
time we are able to prudently save the state's reserves while we                                    
aggressively work on new revenue from resource development.                                         
The proposal also includes $340 million of primarily transportation,                                
university, and deferred maintenance projects that will be funded                                   
through bonds issued by the Heritage Securitization Corporation, that I                             
will propose to create in separate legislation.  Debt will be issued over                           
several years as money is needed to pay for projects.  Debt service will                            
be paid from the Heritage Capital Fund, which consists of earnings of                               
the Amerada Hess settlement principal.                                                              
The capital budget includes proceeds from the sale of bonds by the                                  
Alaska Student Loan Corporation (ASLC).  This is the second of a                                    
three-year plan by which ASLC is repaying the state for its initial                                 
investment of $300 million in student loan programs.  The proposal                                  
reflects the corporation's desire to assist the state in bridging its short-                        
term fiscal gap.  This proposal will have no impact on student loan                                 
programs.  ASLC plans to repay the state up to $260 million by the                                  
end of FY 2007.                                                                                     

2005-01-14                     Senate Journal                      Page 0062
I look forward to working closely with this Legislature to jointly craft                            
a capital budget that provides Alaska residents essential state services                            
and creates good jobs for hard working Alaskans.                                                    
Sincerely yours,                                                                                    
Frank H. Murkowski