EDITORIAL: Why is the state repeatedly dropping the ball on federal funding?

Multiple times in the past year, our state government has made serious errors that resulted in missing out on millions of dollars in federal funding for road projects and education. It’s money we can sorely afford to lose, and it’s not clear what’s going on to cause state officials to be incompetent, obstinate or some combination of the two in disregarding requirements on how that funding can be used. What is clear is that it’s money Alaska needs — and we need to sort out this embarrassment right away.

It’s no secret that Alaska is unusually reliant on federal funds to make ends meet. As Sen. Ted Stevens used to proclaim on the Senate floor in Washington, D.C., Alaska is a young state, and hasn’t benefited from the 100-plus years of infrastructure funding enjoyed by other states before it joined the union. We’ve got some catching up to do, Sen. Stevens reasoned — and he successfully used that argument to leverage major projects for the state, from roads to airports to public buildings.

It’s an argument that is convenient for Alaska, but it’s also true: Roads cost more to build here, and they cost more to maintain. So do schools, or for that matter any public facilities. All of that expense underscores the importance of spending what we get wisely — and making sure we don’t miss out on any opportunity to have Alaska’s funds augmented by federal money.

And yet missing out is exactly what has happened on several occasions lately — in ways that have put hundreds of millions of dollars in much-needed funding at risk. The first incident, and by far the most significant, came in February, when Alaska’s State Transportation Improvement Plan (STIP) was rejected by federal authorities for widespread errors and ineligible projects it included. The STIP is a massive document, totaling more than $5 billion in proposed spending, and its rejection put $100 million in road projects at risk in this year’s construction season alone. Fortunately, the state was able to scramble and correct many of the errors in the plan before its rejection became permanent. But the errors were baffling — in one notable case, the state sought funds for a project at the Port of Alaska for which federal money had already been awarded and largely spent. And the oversights were elementary, such as a failure to collaborate with local transportation authorities in Anchorage and Fairbanks whose input is not only valuable but required. Although the STIP issues were mostly resolved without serious damage to necessary Alaska projects, the incident was a massive red flag that due diligence was seriously lacking.

Another frustrating debacle has been playing out in Alaska’s Department of Education and Early Development, where federal authorities found the state had inequitably distributed relief funds granted during the COVID-19 pandemic. Alaska wasn’t the only state to have issues distributing the funds, but every other state has rectified the matter (or made plans to) since being notified of the problem. Alaska could have done the same, and would have under the budget passed this year by the Legislature — but Gov. Mike Dunleavy used his line-item veto to eradicate the funds allocated to fix the problem, escalating a needless game of chicken that stands to cost the state $17.5 million in federal school funding on top of the governor’s vetoes. Despite clear explanations of why the state ran afoul of federal rules about allocating the money and multiple opportunities to correct the matter, the administration has chosen to tilt at windmills, and Alaska’s schools are paying the price.

The most recent incident, also involving the state Department of Transportation and Public Facilities, is another head-scratcher that shows the STIP issues weren’t a one-off. Alaska missed out on more than $50 million in requested supplemental transportation funds, receiving less money than any other state, because of inane errors that should have been readily apparent to anyone with the expertise to have a hand in crafting the funding request. Some projects, again, were not included in local authorities’ plans, and the state included other items even after being warned by federal representatives that they were ineligible.

Have our state departments seeking federal funds decided that the rules attached to receipt of those funds somehow do not apply to them? The problems with funding requests don’t appear to be due to partisan politics or greater scrutiny on the federal side — on the contrary, communication between state and federal authorities indicates that the feds are trying hard to get their Alaskan counterparts to correct errors and comply with policy. And for some reason, that’s not working.

With structural fiscal issues that have yet to be addressed, Alaska can’t afford to miss out on federal funds that should by all rights be a slam dunk. The various departments of this administration need to do their homework and make sure they’re playing by the rules so our state doesn’t lose a single dollar that could go toward fixing our roads or reducing class sizes.