Construction sighs with relief.

• Author: Ess, Charlie
• Position: Alaska - Industry Overview

Alaska's contractor's worried that the elections could shut off our construction funds. That didn't happen.

Coming up with an assessment of Alaska's construction industry is tough enough in a non-election year, what with money shifting through the industry as projects proceed from mounds of paperwork to the reality of earth moving.

The possibility of a changed political climate added pre-election ambiguity to funding for some of the state's largest capital projects, and had the construction industry holding its breath. Federal funding for Alaska projects appeared vulnerable shortly before the election, when the prospect of shifting majorities in Congress looked possible. "A lot of that stuff is in limbo," Henry Springer, executive director of the Associated General Contractors of Alaska said at the time. "There's no use speculating on the big stuff until after the election."

State election results could have a bearing on the Senate's power to override vetoes from Gov. Tony Knowles. Springer points to Knowles' veto of the tort reform bill, which could have had the effect of lessening the total dollar amount of bids submitted by contractors.

Nonetheless, Knowles has vowed to make long-range stability his bottom line. In signing the $100.1 million capital budget into law July 1, he urged next year's Legislature to adopt a capital budget which addresses basic needs and gives communities, school districts, the University of Alaska and contractors predictability in planning for the future.

In recent years, the capital budget has varied wildly, from $147 million to $616 million. Knowles contends that boom and bust cycles mean much of the work goes to Outside contractors and municipalities can't properly plan for their needs. The budget he signed changed little from the six-year version introduced in March, which he hopes will result in a "safe landing" for all facets of industry as the budget moves toward a balance point early in the next decade.

"We are glad to see some stability coming in the construction market," said Springer. He noted that stability calms all corners of the building industry and smooths out bonding capabilities and the levels of inventories that must be carried by suppliers.

Road Construction

A dismal note sounded potential poor health for Alaska's road construction program when the federal government discovered it had miscalculated the estimated ratio of Highway Trust Fund receipts to actual tax collections from Alaska. The snafu means $25 million less federal funds than the state had planned for and the gap sent Alaska transportation planners scrambling for direction in mid-October.

Combining the state's capital budget with the Alaska Housing Finance Corp.'s contributions of $47.9 million and the $293.6 million originally appropriated from federal transportation funds would have brought the state's FY '97 public works budget to $598.6 million. The largest portion of the capital budget had been dedicated to transportation projects, in which $37 million in state funding was matched by the $293.6 million in federal transportation funds.

Another variable in the road construction picture is that a scoring process implemented late last year drastically changes the way future road and aviation construction projects will be built. Under the new...