Senate adds $156M to capital budget, prioritizes deferred maintenance

The Alaska Senate added $156 million to the state capital budget, shifting from the governor's austere proposal to fund deferred maintenance across schools, universities, and state facilities.

The Senate Finance Committee's version of Senate Bill 214, presented to the House Finance Committee on Thursday, directs $88.7 million in unrestricted general funds toward statewide infrastructure needs rather than individual legislator projects. The additions came after oil prices spiked beyond last fall's projections, when the governor submitted a match-only budget.

"The governor submitted a capital budget that was very lean," said David Scott, staff to Senate Finance Committee Co-Chair Bert Stedman. "With the uptick in UGF revenue, the Senate is adding primarily deferred maintenance funding to the governor's budget. This increased spending is focused on statewide issues."

K-12 schools received the largest share at $88.7 million total. The Senate funded the top 15 projects on the Department of Education and Early Development's major maintenance priority list at $45 million, after reducing a $34 million request for Galena's Huntington School to $5 million to reach more projects down the list.

The reduction drew concern from Rep. Will Stapp during House Finance Committee review. "Just through the chair too regarding Galena's Huntington School, so also been to that one. Also Moonlights is a boarding school for a lot of rural kids who come there, very similar to Mount Edgecomb," Stapp said. "I haven't had the opportunity to talk to Superintendent Johnson yet there, but I bet if I do, he's gonna tell me that skimping on the appropriation probably doesn't allow him to do much of anything."

The budget includes $17.5 million to begin replacing the Stebbins school destroyed by fire in 2024. The total project cost is $120 million, with $71 million requested from the state after insurance proceeds. The appropriation represents Phase 1 for engineering, design, and initial materials, according to House Finance Co-Chair Neal Foster.

"Total request for the school, as mentioned, was $120 million. The requested amount from the state was $71 million, so the delta there would be the insurance that was received, I believe," Foster said. "And then of that $71 million, of course, this is $17 million in what's being called Phase 1 to get the initial work done."

"The funding will be spread out somewhat," Foster added. The capital appropriation lasts five years, allowing the legislature to add funding in future budgets.

Three additional major maintenance projects addressing deteriorated fuel tanks at rural schools received $11.8 million from the Spill Prevention and Response Fund.