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All Hope for Knik Bridge Rides on Federal Decision

by Phillip Manning ~ June 24th, 2014

by:  Liz Ruskin, APRN

Gov. Sean Parnell on Friday signed a bill to finance a $900 million bridge across Knik Arm, from Anchorage to Point McKenzie. Bridge proponents originally wanted to fund the project entirely with federal earmarks. But then Congress banned earmarks, in part due to public outrage over this bridge and another in Ketchikan, both derided nationally as “bridges to nowhere.” The new Knik bridge plan is contingent on low-interest loans from the federal government. APRN’s Liz Ruskin reports on the loan program the state is pinning its hopes on.

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Knik Arm bridge fans would have envied Los Angeles last month. In a U.S. Senate hearing room, California representatives were high-fiving themselves for winning more than $2 billion to extend a subway to the city’s Westside. Sen. Barbara Boxer was delighted.

“Listen to these numbers. They’re even big by Washington standards. In addition to the $1.25 billion, full funding grant agreement, for which we are so grateful to this administration, the Purple line extension project is also benefiting from an $856 million loan made possible by the TIFIA Program.”
That’s the program Alaska hopes will lend the state more than $340 million for the Knik Bridge. Boxer is one of its chief proponents in Congress.

“TIFIA: Transportation Infrastructure Finance in Innovation Act.”
As she explains it, the program is designed to lend the money needed to get a project started while other revenues roll in more slowly.

“Because when you put together projects like this, they’re enormous, and they’re enormously important, so you gotta use all the options at your disposal.”
Los Angeles Mayor Eric Garcetti thanked his senators and the federal government but says the real reason they got the money is that Angelenos reached into their own wallets first. Garcetti commends local voters for approving a 30-year sales tax to pay for transportation.

“We’re not coming here hat in hand with an empty hat. We come here to get it topped off.  We know that in this changed landscape you have to bring something to the game in order to get more, and we consistently do that.”
Alaska isn’t coming entirely hat in hand to the feds, either. In the past, they’d asked TIFIA to finance nearly half the bridge costs. But federal officials said they wanted to see more of a state commitment. So now the state is asking TIFIA to cover about a third. Another third would come from other federal transportation dollars. And for the state’s third, it plans to issue up to $300 million in bonds, but only if it gets the TIFIA money first. The plan is to pay it all off with tolls, estimated at $5 per car.  AlaskaTransportation development director Jeff Ottesen told state legislators the financing plan is smart for the state.

“We’re getting a chance to build this and, quite frankly somebody else is going to pay a large piece of the tab.”
Ultimately, the U.S. Transportation Secretary decides which projects TIFIA will fund. The department made no one available to interview for this story. But Steve Ellis, vice president of Taxpayers for Common Sense, says the very reason Alaska might like the plan – limited financial commitment — makes it unattractive to federal policymakers. Ellis says Alaska isn’t really bringing revenues to the deal; it’s bringing more debt.

“People may argue these bonds are skin in the game but in reality it’s still somebody else’s skin.”
His group claims credit for pinning the “Bridge to Nowhere” label on the Ketchikan bridge and helped spread the taint to the Knik project as well. Last year Taxpayers for Common Sense gave the Knik project a second “golden fleece award,” intended to highlight wasteful federal spending. Ellis predicts the U.S. Transportation Department won’t like the loose repayment terms Alaska is proposing.

“Certainly if you’re saying that whatever scraps are left will go to pay off the Tifia loan, that’s going to raise up the hackles of the feds.”

Knik bridge proponents shouldn’t count on Sen. Lisa Murkowski intervening with the department. She says she has concerns about the cost, the routing and the fairness to other parts of the state. As far as winning TIFIA funds, she thinks it’s an uphill battle. Murkowski says it’s unfair, but nationally “major Alaska bridge project” remains synonymous with pork.

“That has clearly stuck and you can open a newspaper here in Washington DC today and you will still see reference to the ‘Bridge to Nowhere.’”
A spokesman for Alaska Congressman Don Young says he’ll support the bridge for TIFIA funds. But he notes Young sent hundreds of millions of dollars to the state to build the bridge back in 2005 but the state chose to spend that money elsewhere.

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