Legislature(2007 - 2008)BUTROVICH 205
02/05/2008 01:00 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| 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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