With state budget talks in full swing at the Alaska Legislature in Juneau, the topic of funding for the planned deep-water port in Nome is being addressed by the regional delegation.
Representative Neal Foster of Nome and Sen. Donny Olson of Golovin spoke to the Nome Common Council on Monday, with a specific focus on the Arctic port.
While there may be doubt about how to fund state government overall — whether by a change in the way the permanent fund dividend is calculated, or by instituting broad-based taxes — there should be no question about funding for the Nome port project, according to both Olson and Foster.
There is a very large deficit in the governor’s budget that needs to be addressed, Foster said.
“There’s a number of ways you can tackle that,” Foster said. “There’s taxes, which I don’t necessarily support, but you’ve got this over a billion-dollar hole in the budget.”
In terms of a possible statewide tax, legislation was introduced on March 27 by Nikiski Rep. Ben Carpenter to establish a 2% state sales tax. An oil tax proposal, introduced last week by Anchorage Sen. Bill Wielechowski, would trim an oil production tax credit.
Federal funding for the deep-water port was approved Congressionally at $250 million, or just less than half of the feasibility study estimate of $618 million for the total project, according to a 2022 report from the Alaska Journal of Commerce. The $250 million federal funding was earmarked for the first phase of the project. That amount will likely grow due to inflation, according to Nome Port Director Joy Baker.
Baker added inflation is taking the project into the realm of the unknown and could affect the entire cost of the project going forward.
Nome Mayor John Handeland thanked the delegation, saying last year’s state budget actions were an up-and-down affair for the city.
“We were on pins and needles watching you last year, towards the end of the session, and the up and down, and where the port money was; it was in, it was out, it was less, it was more,” Handeland said. “We were extremely grateful to have that come through.”
Gov. Mike Dunleavy has included funding for both Nome and the Port of Anchorage in his FY-24 budget.
The Alaska Legislature approved funding for the port, in the amount of $175 million, in 2022. There is little-to-no-chance the state funding for the port would be reduced to balance the state’s budget books, Olson said.
“The idea that it is going to be clawed back, that has to be an agreement between the co-chairs of finance, both of the House and the Senate, before they’re taking any money back from Nome,” Olson said. “They can take it from Anchorage if they want to because they’ve got their own issues down there with their mishandling of the port project … I can almost guarantee you that they are not going to get their hands on any of the Nome money that we got from last year.”
Both Olson and Foster serve as co-chairs of the Senate and House Finance Committees, respectively.
Image at top: Rep. Neal Foster, left, and Sen. Donny Olson. Foster photo: Alaska House Majority. Olson photo: KNOM file.