Walker halts further spending on Juneau Access

Juneau Access map
Map of the proposed Juneau Access project (courtesy Alaska Department of Transportation and Public Facilities)

Gov. Bill Walker issued an administrative order Friday halting new funding and new contractual obligations for the Juneau Access Road, Ambler Road, Susitna-Watana Dam, Kodiak Launch Complex, Knik Arm Crossing and the Alaska Standalone Pipeline Project.

The state departments which oversee the projects have been asked to submit a report by Jan. 5 listing operating costs to date, funding obligations and “potential effects of delaying, suspending or terminating contracts.”

Until Walker reviews those reports and says otherwise, the departments may not sign any new contracts or commit to any new funding from the federal government.

The administrative order is a response to oil prices that have plummeted over the year. In 2014 oil revenue accounted for 88 percent of the state’s general fund spending. General funds, also known as unrestricted funds, make up more than half of the state’s total budget.

“Our budget deficit grows deeper as oil prices go lower,” Walker said in a statement released Saturday. He added: “This is a way for us to not commit new money into projects that may not be continued during this fiscally challenging time.”

Last spring the state forecasted the average price of oil at $105 a barrel. At that price the state expected a $1.1 billion revenue shortfall against the expected $5.6 billion in FY15 general fund spending. In June the price reached a high of $105, but since then it’s dropped by half to $54.

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