Legislature(2005 - 2006)BELTZ 211
03/06/2006 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB193 | |
| SB291 | |
| SB246 | |
| SB247 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 193 | TELECONFERENCED | |
| *+ | SB 291 | TELECONFERENCED | |
| += | SB 247 | TELECONFERENCED | |
| += | SB 246 | TELECONFERENCED | |
SB 247-REVENUE SHARING PROGRAM
2:56:44 PM
CHAIR STEDMAN announced SB 247 to be up for consideration. He
asked Senator Gary Stevens to provide introduction.
SENATOR GARY STEVENS explained that SB 247 stems from work done
by the Advisory Commission on Local Government and comes in
response to local governments requesting that revenue sharing be
reinstated. The bill creates the Revenue Sharing Program to help
local governments and unincorporated communities meet their
financial obligations. It authorizes the Legislature to
appropriate money from the Alaska Capital Fund [Amerada Hess] to
the Revenue Sharing Fund established by SB 246.
Revenue sharing will be appropriated as follows: $300,000 for
each unified municipality; $150,00 for each borough; $75,000 for
each city; and $25,000 for each community. If the amount
appropriated exceeds that which is needed, the remaining funds
will be distributed to municipalities on a per capita basis.
Revenue sharing in Alaska began in 1969 and at that time it was
a larger part of the state budget than community PERS/TRS
assistance and community energy assistance was last year. In
1979 the municipal assistance program was created to replace the
municipal share of the Gross Business Receipts Tax. Until that
time the state shared 20 percent of the business tax generated
in each municipality. When the state repealed the tax on January
1, 1979 there was an implied obligation to replace the lost
revenue. Revenues were distributed with a hold-harmless amount
based on the amount each municipality had received in 1978 plus
a per capita distribution. In 1980 the per capita revenue
sharing program was repealed and replaced with an equalization
revenue sharing program. In 1997 the municipal assistance
program was changed to the Safe Communities Program. In 2004 all
revenue sharing programs were eliminated and since then many
communities have had to reduce or eliminate key municipal
services. According to the Alaska Municipal League, ten small
communities closed their doors last year. He noted that the
packets held examples of letters of support for some sort of
revenue sharing.
3:00:46 PM
CHAIR STEDMAN remarked he could attest to the statewide interest
in revenue sharing.
3:01:21 PM
KEVIN RITCHIE, Executive Director of the Alaska Municipal League
(AML) testified in support of SB 247. He said he had two points
to make. First, the allocations per city, community, and borough
are critical if small communities are to remain viable. Many
have no property tax base and sales tax does little in terms of
generating revenue. Because small communities purchase goods
from the larger urban areas, much of the economic benefit they
generate goes to those large communities. A point in fact is
that the Anchorage Economic Development Corporation has
indicated that small communities fund about one in every eight
jobs in the urban areas.
The second point is to suggest adding to the proposed funding
amount. Although $28 million will help small communities it
won't have a significant impact on tax relief or helping large
communities with their particular issues.
3:03:39 PM
WAYNE STEVENS, Alaska State Chamber of Commerce, stated support
for the legislative effort to implement a sustainable community
dividend program through an endowment management scheme. The
need is critical statewide and if relief doesn't come this year
it will be too late for some communities.
3:04:34 PM
LEO RASMUSSEN testified as a private citizen from Nome. After
reviewing his long and illustrious public career he suggested
looking back 50 years to when the Alaska State Constitution was
created. A sort of partnership growth between municipalities and
the state government was envisioned and a division of the
state's resource income was mandated for the purpose of running
municipal governments. That used to be one of the most important
parts of government in our state, Mr. Rasmussen emphasized. With
that in mind, he suggested the committee seriously consider
going back to a simple distribution of natural resource income
to municipal governments rather than the proposed $75,000 per
municipality.
Mr. Rasmussen endorsed both bills and concluded that this
program could turn the state around.
3:09:45 PM
JOHN COMBS, Mayor for the City of Palmer, testified in support
of using Amerada Hess funds for municipal sharing. He informed
members that the City of Palmer has a population of 5,400 and
encompasses just 5.4 square miles, but it services an area that
has about 21,000 people so some sort of sustained municipal
[revenue] sharing would be most welcome.
3:11:10 PM
DAVE TALERICO, Mayor of the Denali Borough and President of the
Alaska Municipal League, testified in support of both SB 246 and
SB 247. He thanked the advisory commission for its work and said
he particularly likes the minimum provision to support small
municipalities because their health and welfare are vital to the
state. He described the bill as a confident and important
municipal investment.
3:11:59 PM
JEFF CURRIER, Lake and Peninsula Borough, testified in strong
support of SB 247. In the last several years people have been
leaving the area because of the lack of an economic base. The
borough shares fish and bed tax revenue with its small
communities, but because of fuel and other emergencies some of
communities have had to draw down next year's revenue sharing.
"Let's get this thing going," he said.
3:13:22 PM
MITCH CHOCKNOK, City Administrator for the City of New Stuyahok,
testified in support of SB 247. The city is on the verge of
shutting down due to high fuel, insurance, and other costs so
the money would keep New Stuyahok alive. This is vital to this
community and others like it across the state, he said.
3:14:38 PM
KARL SHORT, Finance Director of the Kodiak Island Borough,
stated that he previously testified in support of SB 246, but he
wanted to emphasize the importance of having a way to distribute
state income to the communities to keep them viable so they can
continue to perform essential community services.
Responding to Chair Stedman, he added that boroughs around the
state are taking on a larger share of school expenditures and at
the same time they aren't getting state revenue sharing or
funding for senior citizen taxes. This is to the detriment of
other borough services such as health, planning, and assessing.
3:16:09 PM
ELAINE PRICE, Projects Manager for the City of Coffman Cove,
stated support for the package to keep city doors open and the
community viable.
3:16:37 PM
DAVE TRANTHAN, JR., Alaska Municipal League Representative for
District 9, stated support for SB 246 and SB 247. Anything that
can be done to reinstate revenue sharing would be greatly
appreciated by all communities.
3:17:54 PM
DORIS BAILEY, Assembly Member for the City and Borough of Sitka,
stated unequivocal support for revenue sharing and therefore
both SB 246 and SB 247. The assembly passed a resolution to that
effect.
3:18:36 PM
SENATOR GARY STEVENS advised that there are other bills that
deal with revenue sharing that draw from other fund sources.
Although he'd like to see more money going to communities, this
bill proposes using funds from the Amerada Hess account and in
his view it's a bottom line minimum amount. It's more difficult
to get money from other sources such as the Earnings Reserve
because it affects the dividend and the Constitutional Budget
Reserve because of the high standards for using those funds.
Amerada Hess is a good beginning, he said, and I hope people
support it.
CHAIR STEDMAN held SB 247 in committee and recessed the meeting
to the call of Chair at 3:19:43 PM.
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