Alaska DOT letter shows $563 million in contracts, projects record year, warns of match shortfall

The Alaska Department of Transportation & Public Facilities awarded $562.9 million in construction contracts from Oct. 1, 2024, through June 30, 2025, the department told the Alaska State Legislature's transportation committees in a letter. The department called 2025 one of its most active construction seasons in recent history. It expected about $400 million more in awards by Sept. 30, 2025, which would bring federal fiscal year 2025 construction awards to about $1 billion, "the largest single-year program in the department's history." The letter warned that a state match shortfall for federal fiscal 2026 had already moved projects and could shrink future contracts.

The Federal Highway Administration and Federal Transit Administration approved Amendment No. 2 to the 2024-2027 Statewide Transportation Improvement Program, the state's list of federally funded projects, on July 14, 2025. The amendment drew 222 public comments. The final version added nine projects and dropped 26 from the draft.

With match money lower than expected, the department met federal obligation targets using Advance Construction balances, which let it obligate federal funds without immediate state match, and toll credits earned through the Alaska Marine Highway System. Federal findings attached to the letter counted about $91 million in toll credits and about $783 million in Advance Construction set for conversion after fiscal 2027. The findings cautioned that Advance Construction depends on state funds that may be reduced.

Schedules for 2026 and 2027 had already been adjusted, the letter said. Without a legislative fix, contracts would shrink and projects would slip. Of 43 match-related changes, 39 moved later and four moved earlier. The Glenn Highway project from the Parks Highway to South Inner Springer Loop shifted from fiscal 2028 to 2026. The Richardson Highway Milepost 346 Chena Bridge project shifted from 2029 to 2026. The Sterling Highway Milepost 45-60 reconstruction moved from 2028 to 2027, and the Richardson Highway Milepost 266-341 passing lanes project moved from 2028 to 2027. Federal records posted Sept. 29 show a $53.2 million formula grant for the Glenn project's second phase.

"If addressed early in the 2026 session, we expect to return many of the rescheduled projects to their original timelines," Commissioner Ryan Anderson said in a July 2025 department release.

The gap carried into early 2026. Anderson told staff at a Feb. 6 all-staff meeting that "we have a $70 million shortfall in our current match," adding that the governor had submitted a supplemental request to cover it.