March 27, 2009
Representative Stoltze and Representative Hawker
House Finance Committee
Alaska State Legislature, State Capitol
Juneau, AK 99801
RE: HB127-Subjecting the Alaska Railroad to the Executive Budget Act
Dear Representative Stoltze and Representative Hawker:
On behalf of the Resource Development Council for Alaska, Inc., (RDC), I am writing in opposition of HB127-Subjecting the Alaska Railroad to the Executive Budget Act.
RDC is a statewide, non-profit, membership-funded organization founded in 1975. The RDC membership is comprised of individuals and companies from Alaska’s oil and gas, mining, timber, tourism, and fisheries industries, as well as Alaska Native corporations, local communities, organized labor, and industry support firms. RDC’s purpose is to link these diverse interests together to encourage a strong, diversified private sector in Alaska and expand the state’s economic base through the responsible development of our natural resources.
Unfortunately, HB 127 seeks to make a fundamental change in the operation of the railroad, despite the fact that the current operational structure has served the state well for over 20 years and has produced substantial benefits for Alaska since it was acquired from the federal government in 1985. The Alaska Railroad is a well-run, self-sustaining transportation asset that has provided safe, economical, and efficient transportation services to residents, visitors, the military, and many of RDC’s members. Since the railroad fell under state ownership, it has been profitable for 20 years and it has made hundreds of millions of dollars in capital improvements.
An in-depth assessment of the Alaska Railroad conducted before the transfer to state ownership determined that most of the financial problems encountered under federal ownership resulted from following federal budgeting procedures rather than allowing its management to develop operating and capital programs on the same basis as a privately-owned railroad. I think it is imperative we heed the advice of this assessment and not doom the railroad to a similar fate where we would only have ourselves, but more importantly our elected officials, to blame.
In concluding, the business model as it exists today works very well for the Alaska Railroad. Although the railroad is exempt from the Executive Budget Act, there is still significant state oversight over operation and management practices. Our members believe the railroad provides a valuable, efficient service. We are proud of the fact that it pays its own way and has a good relationship with its customers, nearly all of whom are members of RDC. In our view, it makes no sense to make sweeping changes when something isn’t broken. Thank you for your consideration.
Sincerely,
Resource Development Council for Alaska, Inc.
