Gov. Mike Dunleavy said Tuesday that he plans to include funding to replace an aging state ferry in his budget request for next year. The remarks came after Sen. Lisa Murkowski urged her fellow Republican to set aside $23 million in the budget to help support a much larger federal grant that would fund a replacement vessel for the 59-year-old ferry Tustumena.
In a recent interview with the Anchorage Daily News, Murkowski said the state ferry system had been allowed to go into a “death spiral” due to a lack of funding for service and maintenance. In recent years, the ferry system has weathered breakdowns, cut back port calls and struggled to hire crew. Murkowski called on the governor to include state funds for the replacement vessel in a Dec. 5 letter to Dunleavy.
But at a news conference ahead of his annual holiday open house in Juneau, Dunleavy pushed back.
“We don’t believe it’s going into a death spiral. As a matter of fact, last few years, we’ve put a lot of money into it. We restructured it. We believe it’s on a track to become an excellent transportation system for the state of Alaska,” Dunleavy told reporters. “So, disagree with the death spiral. We’re working on the matching funding. … Yeah, we’ll include it in our budget.”
The funding would unlock $92 million in federal money from 2021’s Infrastructure Investment and Jobs Act, better known as the bipartisan infrastructure law. The replacement for the Tustumena is expected to serve Southcentral and Western Alaska as the state ferry system’s first hybrid diesel-electric vessel.
Murkowski said in her letter to Dunleavy that federal officials have already announced $416 million in federal infrastructure funding for the Alaska Marine Highway System this year alone. Murkowski said she expects the infrastructure law to provide an additional $600 million for the state ferry system in the coming years. Her spokesperson released a statement praising the matching funds on Wednesday.
“Senator Murkowski looks forward to Governor Dunleavy matching the AMHS federal funds she secured in his budget proposal tomorrow,” Murkowski spokesperson Joe Plesha said in a text message.
By law, the governor’s budget is due to lawmakers by Friday, though Dunleavy said he expects to release it on Thursday.
The budget provides a starting point for state lawmakers, who refine the spending plan during the legislative session. The session begins Jan. 16.
Eric Stone covers state government, tracking the Alaska Legislature, state policy and its impact on all Alaskans. Reach him at estone@alaskapublic.org and follow him on X at @eriwinsto. Read more about Eric here.
