Contractors Increasingly Dependent on State Dollars

May 11, 2011|By Ted Land | Channel 2 News

Ted Land/KTUU-DT

ANCHORAGE, Alaska — When it opens in August, the UAA Health Sciences building will be one of the most modern, energy efficient structures on campus.

The university says the structure will be a major draw for students, but it’s already paying off.

For years it’s provided dozens of construction jobs, all paid for by state dollars.

“In recent years about 60-80% of our work has been State of Alaska capital projects, either through the Department of Transportation or the University of Alaska,” said C. John Eng, President of Cornerstone Construction, which is in charge of the Health Science Building construction.

By some estimates nearly a third of all construction spending in Alaska comes from Juneau in the form of the state capital budget.

“It's a very important part of the economy,” said John MacKinnon, Executive Director of the Associated General Contractors of Alaska. He said Alaska escaped a lot of the impacts of the nationwide recession because of a healthy capital budget.

The federal government kicks in a big chunk of money each year, but funds from Washington D.C. are increasingly uncertain, as Congress cuts back spending.

The private sector's not what it used to be either.

“It peaked in 2005 and has been drifting down a little bit each year,” said Neal Fried, Alaska State Labor Economist.

Fried says the cutbacks add up in the long run, making some companies more dependent on the state construction spending plan.

“It’s always something that obviously everyone in the industry watches very closely because it’s so important. We're talking about billions of dollars here,” he said.

Meanwhile, down in Juneau, The House of Representatives now has the spending plan in its possession. Lawmakers are taking public testimony over the next few days, and hope to hammer out their differences by the weekend.

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