McClatchy Newspapers - by Sean Cockerham

The fate of a project nationally mocked as a "bridge to nowhere" when Congress earmarked money for it now hangs in the balance as the state of Alaska decides whether it's worth putting its own cash on the line.

Alaska's governor is skeptical. So is one of the state's U.S. senators, Mark Begich, who defeated bridge champion and master appropriator Ted Stevens in 2008. But no matter what happens, the federal government isn't getting its money back for what's already been spent on the Knik Arm Crossing.

Backers of the billion-dollar bridge say they are making great progress and already have started moving to take over ownership of businesses and homes in the Anchorage neighborhood that stand in the right-of-way of the project.

But they also say they need $150 million in state money, and for the state to agree that other financial obligations made by the bridge authority will become the "obligations of the state." It's going to be a big issue for the Alaska Legislature, which started its annual 90-day session Tuesday.

Alaska Gov. Sean Parnell is taking the position that the bridge authority hasn't made the case, and he is not supporting the request at this point.

"The pending legislation needs more public scrutiny to determine whether it is a wise way to finance the Knik Arm Crossing," said Parnell's spokeswoman, Sharon Leighow.

Republican state Sen. Bert Stedman of Sitka, who has huge influence over state spending as chairman of the Senate Finance Committee, said the proposal seems too much like giving a blank check to the bridge authority.

"I don't think it's acceptable for the state to have open access to the treasury on projects like that," Stedman said. "You could get private builders to build anything if the state guarantees the debt obligations. That's a nonstarter."

Begich, a Democrat, has concerns about the financing as well, his spokeswoman said this week. Begich recently wrote a letter to the governor in which he warned that Congress won't be coming to the rescue.

"With the current federal spending deficit and federal earmark moratorium, I do not anticipate additional federal funds for the project will be available in the future," Begich wrote. "I am also concerned existing federal funding allocated for the project may be at risk if the project does not make significant progress."

The 2005 congressional earmark for the Knik Arm Crossing was about $231 million, before what Begich referred to as the "national public outcry" over the bridge. Congress stripped the bridge-specific earmark in the face of the controversy, but it went ahead and let Alaska have the money anyway to use on any transportation project it wanted.

The Alaska Legislature decided to put $93 million of that previously earmarked federal money into the Knik bridge. That money has been fueling the operations of the bridge authority, which says it has about $40 million left.

The bridge would run from Anchorage across Knik Arm, a narrow body of water, to mostly undeveloped land near Point MacKenzie in the Matanuska-Susitna Borough. Bridge supporters say it will open the land to future housing and development opportunities. Opponents call it a boondoggle and predict drivers won't want to pay the proposed toll starting at $5 each way to make the trip.

Bridge authority chairman Michael Foster said the most the state could be on the hook for the bridge is a billion dollars, and that is if it decides to take over the bridge from the private developer as soon as it opens.

Otherwise, the state is to pay the developer over time with money from tolls.

The Federal Highway Administration has given the Knik Arm bridge project a green light, and Foster said he's working with Alaska state legislators and the governor to come to an agreement on the financing.

"The project's going well," Foster said. "We're in the right-of-way acquisition process, we have some permits we're still continuing to work on."