Anchorage asks for $600M to help rebuild port, but state legislators say it’s no sure thing

JUNEAU — Anchorage Mayor Dave Bronson traveled to the state Capitol last week with a big request: $600 million to help rebuild the Port of Alaska.

As recently as last year, that kind of request would have been outlandish, but a wartime surge in oil prices has Alaska expecting billions in new revenue. But despite the state’s improved financial picture, members of the House and Senate say the state’s largest city isn’t likely to get what it’s asking for.

“I don’t think we will get that,” said Rep. Andy Josephson, D-Anchorage. “I think we could theoretically afford that if oil prices stay as high as forecasted, but I think that if (the port) got $200 million to $300 million for (the next fiscal year), we’d have to mark that as a win.”

As soon as this week, the Alaska Senate Finance Committee is expected to release a first draft of the state’s construction and renovation budget for the next fiscal year.

Sen. Click Bishop, R-Fairbanks and the committee co-chair in charge of that budget, said the port is “an active topic of conversation.”

The port’s facilities are in disrepair and need to be replaced, and money to rebuild the port is the No. 1 request of the biggest city in Alaska.

“Due to severe corrosion, the entire port infrastructure is at risk of failure and collapse should another large earthquake strike Southcentral Alaska,” Bronson said April 20.

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Bronson’s deputy communications director, Hans Rodvik, said no one in the administration was available Friday to talk about the mayor’s lobbying trip — his third to the capital this year — but said in a written statement that the mayor has had “very productive conversations” on each of the trips.

In a presentation to the House Finance Committee on April 12, Bronson and other municipal officials estimated it will cost $1.85 billion to rebuild the port. Some of that money has already been obtained.

The $600 million, if received from the state, would go toward $1.1 billion needed to replace the port’s cargo docks.

The request is an area of rare agreement between the Mayor and the Anchorage Assembly. Members of the Assembly have also lobbied legislators for money.

“We’re trying to find funds in all different places to be able to make this a reality, and in the meantime, it creates jobs. So that’s good for Anchorage. But really, the end result is good for all of Alaska,” said Austin Quinn-Davidson, who represents West Anchorage on the Assembly.

City officials have tried to make the case that any state grants will reduce the amount of money the city needs to borrow.

Borrowing costs will be repaid using fees on deliveries to the port. Because most consumer products in Alaska are delivered through the port and officials expect fees to be passed on to consumers, reducing the amount of borrowed money means reducing on-the-shelf prices, city officials have said.

On April 20, Bronson told lawmakers that if the municipality is forced to borrow the full $1.1 billion cost of the cargo docks, the fee for cargo will increase from $3.30 per ton to $23.48 per ton.

“We strive and we try to get as much ‘free money’ — for lack of a better term — as we possibly can to offset what we’d have to go to a bank to borrow to cross the finish line,” port director Steve Ribuffo told the Assembly’s utility committee on Thursday.

Members of the Senate Finance Committee said they are unlikely to approve the full $600 million and raised several items of concern when asked why.

First and foremost, lawmakers aren’t sure that high oil prices anticipated by the official revenue forecast will remain around long enough for the state to collect the billions of extra dollars.

Second, if Anchorage receives $600 million, other areas of the state will expect comparable amounts of support for local projects they value. Lawmakers from the Matanuska-Susitna Borough, for example, have repeatedly requested money to complete a railroad line to Port MacKenzie, north of Anchorage.

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Third, lawmakers don’t want to spend state money on the port if federal aid can be used instead.

Alaska is expected to receive millions from the new federal infrastructure funding bill, and the details of that proposal aren’t fully known. There is no direct funding for the port in that bill, said an official in the office of Gov. Mike Dunleavy, but port officials could seek some small, competitive grant programs.

Also unknown is the amount of money the city will receive from a legal settlement related to a failed effort to rebuild the port. On Friday, the United States Maritime Administration, which was found at fault, appealed a December court ruling.

Dunleavy had suggested partially funding the port’s needs through a statewide bond issue. Leading members of the Senate Finance Committee said they’re opposed to borrowing money through a bond, but Senate Minority Leader Tom Begich, D-Anchorage, said he’s not prepared to rule out the possibility.

Sen. Natasha von Imhof, R-Anchorage, said she expects many projects, including the port, will compete for attention in the coming weeks.

Lawmakers will “try to make the painful decision of which is a priority or not this year,” she said, “knowing that it’s a possibility to fund part now, part next year, especially these long-term projects.”

James Brooks reported from Juneau and Emily Goodykoontz reported from Anchorage.