Opinion: Infrastructure finance bill is a win-win for Alaska

Governor Mike Dunleavy speaks during a press conference at the Alaska State Capitol on Thursday, Oct. 28, 2021. (Peter Segall/Juneau Empire)

Governor Mike Dunleavy speaks during a press conference at the Alaska State Capitol on Thursday, Oct. 28, 2021. (Peter Segall/Juneau Empire)

Politics is often viewed as a zero-sum game in which one side wins at the expense of another, but the blanket duty proposal introduced by my administration represents a win-win for Alaskans.

Known as GO bonds, this instrument for financing infrastructure projects must first be approved by the Legislative Assembly and then by voters in a general election.

I’ve always said we have to trust people if we want them to trust us, and Alaskans will make their voices heard at the ballot box as our constitution requires for issuing GO bonds.

I trust Alaskans, and I’m confident in the event that we can present to the people about the benefits of this proposal to build a safer and stronger state.

As proposed, my administration’s GO Bond proposal requires approximately $325 million in funding to cover more than a dozen projects, including roads, ports, harbors and airports.

A set of GO bonds approved by lawmakers and, ultimately, voters is a way for Alaskans to control their own destiny.

The projects span the state from northwest to southeast and from the interior to the south-central.

On the Kenai Peninsula, we will fund the much-sought-after Kenai River Bluffs stabilization project as well as essential expansion and improvements to the Port of Seward to accommodate growing cargo and passenger traffic.

Together, these are two urgent projects considering the loss of structures to erosion and the rapid approach where the current Alaska Railroad wharf in Seward will become unusable.

Alaskans have always shown a willingness to invest in capital projects through prudent funding dating back to statehood, and this was during a time when we still had an income tax.

In total, Alaskans have endorsed GO Bonds 16 times since 1960 to raise approximately $3 billion to build infrastructure for our vast state that benefits our economy and our workforce.

A natural question is why finance these projects instead of paying for them directly? The answer is that in the current interest rate environment, our long-term returns on our investments are greater than the costs of repaying our debts.

Due to strong investment returns, our obligations to our public pension system are virtually wiped out, reducing our fiscal costs over time.

State government fixed costs like pensions and debt servicing are down as revenue prospects look increasingly positive, the state is well positioned to afford a responsible level of new debt to meet these needs and priorities.

Because of this improved budget situation, I will not consider using general fund dollars to pay for projects that will cost less to fund in the long run.

Another question is why go into debt when Congress is supposed to flood the states with money for federal infrastructure?

The answer to this is that many projects that are priorities at the state or local level are not necessarily priorities at the federal level. Nor is the state in line to receive a stack of largely unlimited funds as was the case with the COVID-19 relief bills.

Although some competitive grants are available in the recent infrastructure bill, many funding opportunities require state matches ranging from 10% to 35%.

I have heard the voices of those who see a contradiction in the receipt of federal funds compared to my criticism of the current administration. Some have suggested that I should thank the Biden administration instead. One senator went so far as to say that I shouldn’t “bite the hand” that feeds Alaska.

To be clear, the Alaska I envision is one that feeds itself, not an Alaska that depends on the federal government for food.

Credit for every benefit to Alaska under this infrastructure bill goes to the hard work of our Congressional delegation, and their dedicated representation of our interests is always appreciated.

As champions of our resource development opportunities, they know as well as I do that federal government money is no substitute for failing to meet its obligations ranging from state law to 2017 legislation that required that the lease sales take place in Arctic National. Wildlife refuge coastal plain.

So, for those who believe I should thank the Biden administration for attacking Alaska like no other state since day one, I can only say prepare for disappointment.

Although we may be treated as such by this administration, Alaska is not a second-class state. We will use the same traditional infrastructure twinning programs available to our 49 sister states.

We will not apologize, nor will we give up our right to speak out against this administration or to defend the rights of Alaskans if necessary, whether or not we receive federal funds.

To suggest that we bite our tongues for fear of biting the federal hand only underscores the danger of relying on federal funds to sustain our state.

My administration is digging into this 1,000-page bill to better understand exactly what it means for Alaska, and as more federal guidance is received explaining the rules for these expenditures and correspondences from State needed, the bond package may change.

It may also change based on input from Alaskans and their legislators. This is not take-it-or-leave-it legislation.

My administration is willing and ready to work with lawmakers and listen to Alaskans in order to have the best possible proposal that can win the support it needs from a majority of voters.

For a complete list of projects, estimated costs, and potential federal counterparts, please visit omb.alaska.gov and select “Proposed Budget.” From there, you can scroll down to the FY2023 GO Bond Proposal section for more details.

Mike Dunleavy is the 12th Governor of Alaska.

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