Transportation funding fallacies deserve correction

  • By Marc Luiken
  • Monday, January 11, 2016 5:58pm
  • Opinion

Alaskans are facing a sobering reality: we can no longer afford the same service levels from state government. An oil revenue-induced state deficit resulted in the Alaska State Legislature reducing government’s fiscal year 2016 general fund budget by $404.1 million. These cuts affected every state agency. The Legislature directed the Department of Transportation and Public Facilities (ADOT&PF) to reduce its general fund operating budget by $34.6 million.

ADOT&PF has managed this significant reduction to the best of its ability by balancing the cuts across the entire department. The general fund reductions include: $11.1 for Alaska Marine Highway System (AMHS); $16 million for maintenance of highways, airports and facilities; and $7.5 million for support services.

Nearly 96 percent of ADOT&PF’s general fund operating budget goes toward direct services. This includes maintenance and operations of roads, airports, public facilities, and AMHS. The other four percent funds support services such as accounting, auditing, IT, and staff necessary to meet federal funding requirements.

Contrary to the arguments of some, every company — including government agencies — requires staff to process paperwork, issue paychecks, create operating plans and manage employees. This creates an efficient organization with an appropriate level of staff performing valuable behind the scenes work that enables equipment operators and ferry workers to focus their time toward directly serving Alaskans.

A look into where ADOT&PF positions were eliminated in the fiscal year ‘16 operating budget demonstrates that the department reduced elsewhere before cutting equipment operators or ferry service. Thirty-six percent of the positions eliminated were from support services. In other words, a section that is only 4 percent of budget accounted for over one-third of the total staffing cuts.

Another question I am frequently asked is, why not use some of the $500 million in federal funds to plow roads or run ferries? Believe me, I wish we could but maintenance and operations are not an allowable expense by the federal government. Every state in the nation agrees to the same provisions when accepting federal dollars. Federal funds may only be used to plan, design and construct state transportation infrastructure and the state must pay for the maintenance and operation of that infrastructure.

Alaska relies on the infusion of highly regulated federal funding to help build our transportation infrastructure. Including a small state match drawn from the general fund, these projects spur our economy by employing thousands in project consulting and construction industries and through the increased access, mobility and safety they provide to the public. ADOT&PF has hundreds of highly qualified and specialized employees whose salaries are directly paid for by federally funded projects.

ADOT&PF has an excellent track record of seeking, obtaining, and leveraging large amounts of federal transportation funding. At a time when state capital dollars are scarce it’s critical that we continue on our time-tested and proven track.

Since Alaska must self-fund transportation maintenance and operations, cutting ADOT&PF’s general funds has meant visible reductions in the services that Alaskans use and rely upon every day. Again, these are sobering fiscal times for Alaska. We have made hard choices and we have more difficult decisions ahead.

As these choices are debated, ADOT&PF will continue to pursue as many efficiencies and new technologies as possible to offset budget reductions. Tools such as TowPlows, icebreakers and anti-icing treatments do create cost savings, but still are not enough to close the gap. Consequently, Alaskans will see less service as long as cost-cutting remains the primary fiscal tool.

ADOT&PF is a service organization comprised of dedicated and professional Alaskans who are deeply committed to serve the public, while wholeheartedly embracing our department’s core values of integrity, excellence and respect. We are working hard for Alaskans to get the fiscal picture right. Our mission will remain “to Keep Alaska Moving through service and infrastructure.”

Marc Luiken is the commissioner of the Alaska Department of Transportation and Public Facilities.

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