A Call for Urgency

Alaska’s infrastructure and workforce depend on timely action

laska’s construction industry is more than a sector—it’s a cornerstone of our economy. From building roads and ports to maintaining public facilities, our work connects communities, supports commerce, and creates thousands of good-paying jobs.

But the strength of this industry—and the economic stability it provides—is directly tied to one critical factor: timely and reliable funding.

Right now, Alaska is at a pivotal moment. The state’s ability to access billions in federal infrastructure dollars hinges on one thing: providing the required state match. For every dollar Alaska contributes, the federal government typically provides between $9 and $19, depending on the program. That’s an extraordinary return on investment. But without the match, those federal dollars remain out of reach—and so do the projects and jobs they create.

The Alaska Department of Transportation and Public Facilities (DOT&PF) has warned that without a legislative solution to restore match funding, Alaska could exhaust its available unrestricted general funds by spring 2026. That means new project starts may be delayed, and the Statewide Transportation Improvement Program (STIP) will need to be scaled back to reflect what can realistically be delivered with funding constraints.

This is not just a budget issue—it’s a workforce and economic crisis in the making. Associated General Contractors (AGC), of Alaska members are already reporting sharp declines in active project portfolios, with some contractors experiencing reductions of 50 to 90 percent. While DOT&PF has pointed to 2025 as a historic award year, it’s important to understand that project awards do not automatically translate to shovels in the ground, contractor payments, or employee paychecks. Many of these awarded projects are delayed or stalled due to funding uncertainty, permitting issues, or lack of readiness.

The result is a slowdown in actual construction activity, which is forcing layoffs, limiting hiring, and causing companies to question whether they can continue operating in Alaska. The ripple effects extend far beyond the jobsite: local suppliers, small businesses, and entire communities feel the strain when construction doesn’t move forward.

DOT&PF has stated that no 2025 projects have been officially canceled. However, the uncertainty surrounding match funding has already begun to impact planning and bidding timelines. While the department is working to manage available resources and keep critical work moving, the current situation reflects broader systemic challenges. The Governor’s Office, the Alaska Legislature, and DOT&PF all play a role in ensuring Alaska can meet its match obligations—and all must work together to find a solution.

The governor’s FY26 budget originally proposed $115.9 million in match funding, primarily from unrestricted general funds. The legislature replaced more than $70 million of that with reappropriations from older projects—some of which were already spent or committed. The governor then vetoed those reappropriations, citing concerns about compliance risks and reduced financial flexibility. These decisions reflect complex budget dynamics, but the result is the same: Alaska’s infrastructure program is now in a holding pattern.

We cannot afford to wait until next spring or early summer to resolve this. The construction season in Alaska is short, and delays in funding mean delays in bidding, mobilization, and delivery. Even if a legislative solution is reached, it will take time to sign it into law and adjust the state’s plans to bid projects. Contractors will remain in limbo, uncertain whether jobs will go to bid until spring 2026. We’ve all experienced the scramble of projects getting pushed out late—and every week counts.

This is not just about roads and bridges. It’s about keeping young Alaskans in the state by offering them meaningful careers. It’s about ensuring rural communities have safe, reliable access to essential services. It’s about protecting the economic engine that supports over 41,000 jobs and generates $3.6 billion in labor income annually.

There is precedent for what happens when states fail to meet match requirements. Illinois, New Jersey, and Kansas have all experienced project shutdowns, lost federal funding, and long-term damage to their infrastructure programs. Alaska must avoid that path.

Alaskans deserve safe roads, strong communities, and good jobs. That future hinges on a capital budget that is strategic, reliable, and fully funded. The good news is that a solution is within reach. But it will require coordination, transparency, and urgency from all parties involved. The governor, legislature, and DOT&PF must come together to ensure Alaska doesn’t leave federal dollars on the table. The stakes are too high.

At AGC of Alaska, we stand ready to support this effort. We are committed to working with policymakers, agency leaders, and our industry partners to ensure Alaska’s infrastructure program remains strong and sustainable. Let’s not allow a temporary funding gap to become a long-term setback. Let’s act decisively to protect Alaska’s infrastructure, economy, and workforce. The future of our state depends on it—and so does the future of your business. We encourage AGC members to contact their legislators and share how this issue directly impacts your projects, your employees, and your ability to operate. Your voice matters, and now is the time to use it.