- Associated Press - Wednesday, April 8, 2015

JUNEAU, Alaska (AP) - The Senate Finance Committee on Wednesday unveiled a stripped-down rewrite of the capital-projects budget.

As it stands, the budget would be one of the smallest capital budgets in Alaska in more than a decade. The bill proposes total capital budget funding for fiscal year 2016 of about $1.46 billion, less than Gov. Bill Walker proposed. The capital budget for fiscal year 2004 was $1.53 billion and about $1.3 billion in 2001.

Supplemental items for the current year are rolled into the overall package, and changes still could be made. Amendments are expected to be considered Thursday.

The capital budget doesn’t include $7.1 million proposed by Gov. Bill Walker’s administration for the design of a new school facility at Kivalina as part of a settlement of a lawsuit over rural school funding and to continue the development of a road that would serve as an evacuation route for the community and provide access to the new school site. Kivalina has been struggling with erosion and the new school site selected by the community would be on higher ground, according to budget documents. There is no road to the site currently, the documents state.

Committee co-chair Sen. Anna MacKinnon, who oversees the capital budget on the Senate side, said conversations continue on that issue. There remains a question of what the state’s obligation would be, she said. For example, is the road part of that obligation?

Sen. Donny Olson, D-Golovin, said the main goal is making sure the legal settlement is met. But he noted some of the outstanding questions. He said he was in a meeting about these issues that included other finance members, the attorney general and representatives of Legislative Legal Services on Wednesday afternoon.

The bill does not include $8 million for an engineering building at the University of Alaska Fairbanks.

The bill also does not include $92 million related to accounting issues for advance payments to health-care providers stemming from problems with Alaska’s Medicaid payment system. The payments were requested by the Walker administration. MacKinnon, R-Eagle River, said that will be a separate conversation with the House and Walker.

For months, legislators and Walker sought to tamp down expectations for the capital budget, given the multibillion-dollar deficit the state is facing this year and next amid low oil prices.

MacKinnon said the primary goal is to leverage federal dollars, which make up the vast majority of funding identified in the draft, with an effort, too, to complete projects.

Whatever ultimately passes the Senate would go to the House for consideration.

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