Senate passes bill to reappropriate $10 million from port funding

The City of Nome could lose $10 million in state funding, which was part of a $175 million appropriation by the Alaska Legislature in May 2022 for the Port of Nome expansion. This has come as a shock to the City and legislators alike. 

“It’s disheartening, it’s disgusting,” Nome Mayor John Handeland told the Nugget.

The Alaska Senate voted Tuesday to approve a draft capital budget that reappropriates $10 million that were meant to help fund the port expansion, but that are now to be used for a state match by Department of Transportation and Public Facilities to receive federal highway funds. 

Amid a state budget deficit of several hundred million dollars, it’s common for lawmakers to look for unspent funds from past appropriations and reallocate the money to help fill budget holes in current spending.

“We made it known [to legislators] that we can’t give up these funds,” Handeland said. “If we don't have all the money, the project that's being rebid is in jeopardy.”

The Port of Nome expansion project received two grants amounting to a total of $175 million from the state legislature in 2022. This year, the legislature identified $10 million as unexpended or unobligated. Project manager for the Port of Nome Joy Baker said that’s not true. “Portions of the funds are contracted, with future contracts in play once the project is awarded to cover construction, inspection and engineering for the City’s Local Service Facilities components,” Baker wrote to the Nugget.  

Approximately $163 million of the $175 million has been paid to the Army Corps so far. The city would have $ 638,000 left if the legislature takes the $10 million, according to Baker..

Sen. Donny Olson (D-Golovin), co-chair of the Senate Finance Committee, voted to move the bill that reallocated the $10 million out of the committee and onto the floor. Due to timing, the capital budget needed to move out of the Senate this week, Olson said in a statement to the Nugget, which is why he recommended to amend the bill. 

But the bill was passed unanimously by the Senate on Tuesday with no amendments offered. The measure now goes to the House, where it could be amended.

Rep. Neal Foster (D-Nome) said he was shocked by the reappropriation, and he doesn’t support it. 

His office is looking at all options to restore the money to the project.

“If that means taking money from Sitka, I will do it,” Foster told the Nugget, referencing Sen. Bert Stedman (R-Sitka) who co-chairs the Senate Finance committee with Sen. Olson and who championed the reappropriation. 

“If there would’ve been more funds in the Nome project that were unencumbered, we probably would’ve adjusted that project some more,” Stedman said in a press conference Tuesday.

The Corps extended its deadline for the solicitation to bid for Phase 1A of the Port of Nome to April 28. 

This story has been updated with the number of $638,000 that would be left for the city if the Legislature reappropriates $10 million.

This reporting from the State Capitol by Nugget reporter Anna Lionas is made possible by the Alaska Center for Excellence in Journalism’s Legislative Reporter Exchange.