Industry groups oppose Dalton Highway toll targeting oil and gas traffic

Industry groups testified in opposition Thursday to a late-session bill that would impose tolls on a two-mile stretch of the Dalton Highway near Deadhorse. They warned the measure could cost Alaska millions in federal highway funding and single out the oil and gas industry.

The Senate State Affairs Committee heard invited and public testimony on Senate Bill 286, which would establish tolls on miles 413 to 415 of the Dalton Highway. Testifiers said the bill targets vehicles transporting people or goods for oil and gas developers while exempting other users. Chair Scott Kawasaki, who sponsored the measure on behalf of the committee, said the state invests approximately $17 million annually in Dalton Highway maintenance and operations. That includes $10.5 million from state funds and $6 million from federal sources. The proposal responds to heavy wear from industrial traffic on the highway, which drives high maintenance costs the state currently shoulders.

DOT counsel testified that federal authorization and a corridor feasibility study would likely be needed before the toll could be implemented. The testimony grounded industry concerns about federal funding in agency analysis.

Greg Miller, incoming president of the Alaska Support Industry Alliance, told the committee the toll could trigger the loss of federal funding that currently covers up to 90 percent of highway maintenance costs. Under federal law, states generally cannot convert existing toll-free highways into toll roads without adding new capacity across the entire route, he said.

"Right now, the funding can cover up to 90 percent of the cost," Miller said. "Losing that would mean the state of Alaska is suddenly on the hook for 100 percent of maintenance, operations, and repairs on one of the most expensive roads we have."

Steve Wakowski, president and CEO of the Alaska Oil and Gas Association, said the industry already pays substantial taxes to Alaska. According to the Revenue Sources Book, the oil and gas industry was expected to pay roughly $858 million in corporate income tax, severance taxes, and state property tax in fiscal year 2026. That figure does not include approximately $988 million in royalties and another $460 million in royalty payments to the Permanent Fund.

"This bill would require oil producers to effectively pay twice, once through existing taxes that fund transportation and roads statewide, and again through a toll specific to the Dalton Highway," Wakowski said.

Jamie Benson, president of the Alaska Trucking Association, said the bill would force trucking companies to front toll payments and potentially pursue legal action to recover reimbursement. The association represents 135 member companies with over 10,000 employees statewide.