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Federal spending in Alaska has leveled off, report says

The explosive growth of federal spending in Alaska has flattened, according to a new analysis, but the state’s per-capita haul is still more than 40 percent above the national average, even with legendary spender Ted Stevens gone from the Senate.

The flat funding is a big difference from the enormous spike between 1999 and 2005, when annual federal spending in Alaska jumped from just over $6 billion to more than $10 billion, at its peak reaching 82 percent above the per-capita national average.

That period roughly parallels Sen. Ted Stevens’ tenure as chairman of the Senate Appropriations Committee, a perch from which he was able to steer billions of dollars to Alaska. The Republican Stevens lost his bid for re-election in 2008, shortly after a jury found him guilty of failing to report gifts (the verdict was later tossed out).

Alaska Democratic Sen. Mark Begich, who defeated Stevens in the fall of 2008, said the world has changed since Stevens wielded power.

Begich said just maintaining flat federal spending for Alaska is an achievement given the deficit, the recession and the congressional shunning of earmarks, the directed spending that Stevens was famous for using to put Alaska projects in budget bills. Begich said his critics predicted that Alaska funding would plummet when he replaced Stevens in the Senate.

“Our target was to stabilize and look to the future, at the same time recognizing we had an enormous recession we were just entering when I got elected. Stabilize funding but, oh by the way, we’re going to have a recession, deficits, a huge debt and no more earmarks, good luck with that,” Begich said.

Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense, said there was just one year after Stevens lost the election in which Congress allowed earmarks. Alaska Republican Sen. Lisa Murkowski joined the Appropriations Committee that year, 2009, but Alaska fell from first to fourth nationally in per-capita earmarks.

“There was a decided loss of clout when going from having a senior Republican on the panel to a much more junior lawmaker with Sen. Murkowski, and that clearly hurt Alaska’s ability to get earmarks,” Ellis said. “But Alaska is always going to get a significant amount of federal funding just because of the large military presence in the state.”

Federal dollars also will keep flowing to Alaska because of its massive federal land holdings, lack of basic infrastructure in rural areas and programs for Alaska Natives, according to the May report from the Institute of Social and Economic Research at the University of Alaska Anchorage.

Alaska’s economy is hugely dependent on the money that comes to the state from the federal government. Federal spending supports an estimated one-third of all jobs and household income in the state, according to the report.

The institute found that federal spending is no longer going up in Alaska for defense or grants, the largest categories of dollars that flow to the state. It concluded that “federal spending in Alaska has flattened in the past several years, and given the federal government’s budget problems, that spending is not likely to increase any time soon.”

The lack of funding growth was masked by the temporary boost Alaska received from the stimulus package. Alaska ranked first among the states in per-capita stimulus funds, representing more than $3,000 for each Alaskan, nearly four times the national average. That pumped more than $2.2 billion extra into the state during 2009 and 2010.

“But without the stimulus funds, federal spending in 2009 and 2010 would have been no higher than in the previous four years,” according to the analysis.

Murkowski said it’s a challenge just to keep Alaska funding from taking a dive.

“A flat line is pretty much a success story if you can keep things flat at a time when we’re facing a $15 trillion deficit and shrinking budgets in all categories,” Murkowski said.

Murkowski said, for example, that Alaska is getting two projects in this year’s military construction budget for a total of $18 million. Last year Alaska received more like $300 million, she said.

“It’s over a 90 percent reduction in military construction dollars coming our way,” she said.

But she said Alaska’s congressional delegation managed to get funding increases in other areas, including programs for Natives, and avoided an attempt to end cargo subsidies for the bush, the parts of Alaska not connected to its road network.

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