Road bond bill OK'd by Alaska House

| 5/5/2005

The Alaska House has approved legislation to borrow about $193 million from grant-anticipated revenue vehicle bonds to pay for roadwork.

The bill, sponsored by Rep. Kevin Meyer, R-Anchorage, would authorize the state treasurer to borrow money through the special class of bonds – commonly known as GARVEE bonds – to help finance 23 transportation projects listed in the bill.

Many of the projects are part of Gov. Frank Murkowski’s road priority list. Among the projects listed are extending the Glacier Highway in Juneau north to the proposed Kensington mine and granting $10 million to pave a road between Hollis and Klawock on Prince of Wales Island in the panhandle.

The funding program allows the state to borrow money against the federal transportation dollars that come each year to pay for construction. The sale is based on the assumption that federal funding in future years would pay off the bonds. This allows the state to get money needed for the project up front.

Opponents say borrowing the money would saddle future generations with debt. Supporters say the state would earn interest from holding $193 million while the debt is being paid down.

The interest from the bonds would cut the state’s obligation in half for a few years, Meyer told the Juneau Empire.

HB275 must still pass a reconsideration vote in the House, which is not expected to change the outcome, before moving on to the Senate.