Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

There was a palpable lack of enthusiasm at the Haines Borough Assembly’s meeting to discuss project priorities for the state’s capital budget.

Every year, the legislature asks the borough to submit a list of projects it would like the state’s help financing through the capital budget, borough manager Debra Schnabel said at the start of the meeting. This process dates back to a time when they were actually giving people money, she said. These days, the chance of the state funding any of the items on the borough’s wish list is nil, Schnabel said. “I’m not sure why we do this now. However, it’s a good exercise. It helps us to prioritize.”

After a brief discussion of the rules governing capital project requests which established that there is no limit to the amount of funding the borough can request nor a limit on the number of projects, assembly members voted unanimously to draft a resolution naming funding priorities for the capital budget for the upcoming fiscal year (FY21): a portion of the wastewater treatment facility replacement, moorage floats for the South Portage Cove harbor, Second Avenue reconstruction from Main St. to Mud Bay Rd, a replacement design for the fire hall/police/emergency medical facility, renovation of the Lutak dock face, and a municipal sludge composter. 

Last year, the assembly’s wish list for the current fiscal year (FY20) included the same six items. The fact that none of these made it into the FY20 capital budget is not a slight against Haines but a reflection of a change in the state’s financial situation, Sen. Jesse Kiehl said. “Since the price of oil dropped a few years back, the legislature has ratchetted back the capital budget.”

Five years ago, the state’s capital budget project list looked a lot different. Before the price of oil collapsed, leaving the state with a budget deficit, the list of capital projects broken down by district was well over 100 pages and there were always at least a few Haines-specific projects. In fiscal year 2015 (FY15), which began on July 1, 2014, the list included three Haines projects: $20 million in federal funds for ferry terminal modifications, $60,000 in state funds for the school roof, and $1.2 million in designated state funds for the biomass project. Since then, the word “Haines” has appeared in a list of capital budget projects exactly once, in fiscal year 2017 (FY17). That year, the list included $30 million in federal funds for Haines Highway reconstruction.

Between FY15 and the following year (FY16), the length of the capital projects list was reduced by roughly three-quarters. While the federal funding level remained relatively stable, $1.1 billion in FY15 and $1.3 billion in FY16, state spending fell from $1 billion to $259 million during that same year. And these numbers have stayed pretty fixed since then.

Beginning in FY15, the state greatly reduced the size of its investment, prioritizing funding in the capital budget needed to match federal transportation dollars, Kiehl said. This is why federal funds coming into the state have remained relatively stable even as the state’s investment dropped off. The $741 million reduction in state funds between FY15 and FY16 represented a reduction in smaller grants to municipalities and nonprofits and a decrease in maintenance on state assets like ferries and other critical infrastructure, he said.

Although it is unlikely that Haines Borough will receive funding for any of the projects on its wish list for the upcoming fiscal year, it is still worthwhile to submit a list, Kiehl said. “It lets legislators know what the needs are around the region.” He and his colleagues can then look for other opportunities to try to meet the needs of the communities they serve, he said.

Right now, there is buzz around the capitol about using a general obligation bond to help fund the capital budget, Kiehl said, but the discussion is still in its early stages. Borrowing money through general obligation bonds would require voter approval.

Boroughs, nonprofits, and other eligible entities have until close of business on Feb. 14 to submit their capital project wish list this year. Kiehl said anyone who wants to submit a project list should reach out to his legislative office to get a Capital Project Submission and Information System (CAPSIS) account set up. The capital budget traditionally begins in the Senate before moving to the House. Once project lists from around the state have been submitted, senators will review all proposals and prioritize projects based on potential impact. Alaskans likely won’t see a draft of a capital budget until April, he said.

The assembly will consider the resolution containing capital budget project requests at its next meeting on Tuesday, Feb. 11.