Committee Rejects Most Proposed Cuts to Alaska Railroad’s Revenues
Alaska Railroad Depot in Fairbanks, AK. Photo by Kimberly Tyburski, KTVF-TV
FAIRBANKS — A congressional committee has rejected most of a threatened $30 million cut to the Alaska Railroad’s revenues.
A House-Senate conference committee approved a federal transportation bill Wednesday night that would provide $31 million to the railroad during each of the next two federal fiscal years.
The conference committee agreement still must be passed by each house of Congress, but Alaska’s delegation expressed optimism about the deal.
“We got it back,” said Representative Don Young (R-Alaska) in an interview Thursday. Young was a member of the conference committee that adopted the spending level, which the Senate had proposed to cut drastically.
The $31 million accepted by the conference committee is the equivalent of about 17 percent of the Alaska Railroad’s projected revenues of $185.7 million in this calendar year.
The money would come through the Federal Transit Administration. Young said every passenger railroad in the country receives such funding. Alaska had been shut out for many years, but when Young was chairman of the House Transportation Committee from 2001 to 2006, he succeeded in including the Alaska Railroad in the formula at 60 percent of the funding given other railroads, he said.
Based on the formula, the Alaska Railroad is expected to receive $35.8 million from the transit administration for the current federal fiscal year, which began Oct. 1.
However, when the Senate passed an updated version of the legislation in March for the coming two years, it eliminated about $30 million of the $35.8 million. The House version did not cut the funding so severely.
The conference committee agreed Wednesday to spend at close to the current level during the next two fiscal years.
“A great deal of thanks goes to Congressman Young and Senators [Lisa] Murkowski and [Mark] Begich for their hard work to retain critical funding for the Alaska Railroad in the transportation bill,” said Chris Aadnesen, Alaska Railroad president and CEO, in a news release.
The railroad uses part of the money to pay off bonds it sold to raise money for track rehabilitation.
“The railroad has sold bonds based on the revenue. If they didn’t receive the money, they’d lose their rating,” Young said. “If we take away their ability to borrow and build... we’re stuck.”
Alaska Railroad spokesman Tim Sullivan said securing the federal money would not affect the railroad’s plans to eliminate about 50 positions statewide. Those positions are disappearing because Flint Hills refinery in North Pole is shipping less jet fuel to Anchorage, he said. Most of the jobs will be eliminated through attrition and by not hiring seasonal employees, so “the number of pink slips will be much lower,” Sullivan said.
The conference committee’s bill also sets funding levels for much of the federal highway and other transportation spending in Alaska during the coming two fiscal years.
According to a summary from Senator Mark Begich, D-Alaska, the bill would do the following:
• Provide funding of $460 million in fiscal 2013 and $464 million in 2014 for highways, roads, bridges and other infrastructure projects in Alaska.
• Spend at least $46 million annually on road projects in about 200 rural Alaska villages. The Senate version had cut about $13 million from the funding. The bill also reauthorizes a high priority projects program, which benefits Alaska villages and reservations nationwide, at $30 million. The Senate bill had eliminated the authorization.
• Revise the federal spending formula for ferries in a way that emphasizes route miles, which benefits the Alaska Marine Highway System.
Contact Fairbanks Daily News-Miner assistant managing editor Sam Bishop at 907-459-7574.