Legislature(2001 - 2002)

02/10/2001 01:36 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          SB 48-MUNICIPALITIES:INCORP/PROPERTY VALUATION                                                                    
SENATOR  WILKEN, sponsor  of  SB 48,  said SB  48 is  an attempt  to                                                            
validate  the  $125 million  contribution  that  has been  given  to                                                            
regional education  attendance areas over the last  six years.  Some                                                            
of  Alaska's  unorganized  boroughs   may  have  the  capability  of                                                            
supporting  their educational  needs for which  there is no  support                                                            
today.   SB  48 keeps  existing law  in place  while  putting in  an                                                            
alternative  option for  the Department  of Community  and  Economic                                                            
Development  to see if some unorganized  boroughs are available  for                                                            
annexation.  The  boroughs are then nominated to the  Local Boundary                                                            
Commission.  An analysis  is done and a determination is made from a                                                            
checklist  of 12  items  as to  whether  or not  a borough  has  the                                                            
ability to support government.   If a borough has the ability to pay                                                            
then it should  and if it does not,  that borough should  be helped.                                                            
SB 48  does not attempt  to define  or indicate  areas of the  state                                                            
that  may or  may not  be able  to  support education.    It is  not                                                            
predatory or  punitive, it simply  attempts to answer the  question:                                                            
what is the validity  of a $125 million contribution  to unorganized                                                            
Number 106                                                                                                                      
MR. ORRIE BELL, testifying  via teleconference from Petersburg, said                                                            
SB 48 speaks of  unfairness as well as personal responsibility.   He                                                            
does not think  it is unfair that  he pays a 3 1/2 percent  raw fish                                                            
tax.  He has  schooled his children  through 12 years at  no cost to                                                            
the state.   He has no  access to roads,  airports, utilities,  fire                                                            
protection,  harbor facilities  or  schools. He  has taken  personal                                                            
responsibility  in these areas  and he thinks  it is unfair  for the                                                            
state  to  tax his  home  or  business  without  some sort  of  well                                                            
described local  representation under law.  Many people  in the Bush                                                            
are a small  burden to the  state by choice.   The local economy  is                                                            
based  on this and  it works.   SB  48 muddies  the water  regarding                                                            
annexation  and what  the taxes  would  actually fund  - this  alone                                                            
should  defeat the bill.   Families  should not  have to sell  their                                                            
assets to satisfy an unfair tax burden.                                                                                         
MR.  CHARLES  ABBOTT,  testifying  via  teleconference   from  Delta                                                            
Junction, said  that according to Senator Wilken's  statement one of                                                            
the biggest  benefits of becoming  an organized borough is  that the                                                            
borough  will  have  more  say  in  their  local  school   district.                                                            
However,  he fails to allow  the borough  the same consideration  in                                                            
deciding  whether or not it  wants to be a  borough.  The  people of                                                            
Delta Junction have chosen  to live without the services provided by                                                            
an organized  borough.   Should lawmakers  of metropolitan  areas of                                                            
the state under  so-called equity  take this choice away  from them?                                                            
Senator Wilken  assumes people should  embrace the notion  of paying                                                            
taxes  in support  of public education,  but  not everyone  believes                                                            
that  pouring more  money into  a struggling  school  system is  the                                                            
answer to the public education woes.                                                                                            
Number 165                                                                                                                      
MR.  ART  GRISWOLD,   testifying   via  teleconference  from   Delta                                                            
Junction,  spoke on  behalf of the  Deltana Borough.   Mr.  Griswold                                                            
said before  anything happens  with SB 48,  the boundary  commission                                                            
should  be reorganized  and  forced  to look  at petitions.    After                                                            
signatures  are submitted,  they  should go  to the  Lt.  Governor's                                                            
office to  be checked and  verified.  If SB  48 is passed,  it opens                                                            
the  Deltana  Borough  up  for  annexation  into  another   existing                                                            
borough.   SB 48  looks like  it is set  up to  help boroughs  annex                                                            
areas around  them that have an equity  base - taking money  without                                                            
giving local people representation.                                                                                             
MR. PARTICK  SCHLICHTING, testifying  via teleconference  from Delta                                                            
Junction, said this is  a controversial issue for many people in his                                                            
area.   It  is  hard to  imagine  that  rural  areas are  not  being                                                            
perceived as contributing  to the tax base.  Imagine rural areas not                                                            
buying  anything   from  Fairbanks   or  Anchorage  -  rural   areas                                                            
supplement  the infrastructure  of metropolitan  areas.   Therefore,                                                            
rural areas do  benefit metropolitan areas by feeding  its tax base.                                                            
People in  his area feel  an income tax or  sales tax would  be fair                                                            
but a property tax is extortion.   Mr. Schlichting feels this is the                                                            
wrong way to raise money for education.                                                                                         
Number 234                                                                                                                      
MR. PAUL KNOPP testified  via teleconference from Delta Junction for                                                            
the Deltana  Community Corporation.   Mr.  Knopp read the  following                                                            
     Deltana  Community Corporation  (DCC) does not support  SB
     48 primarily  because  it does not provide  for a vote  of                                                                 
     the people  affected by borough  incorporation.  In  1998,                                                                 
     DCC  supported  an RDA  mini-grant  application  by  Delta                                                                 
     Junction   to   explore   borough   feasibility   in   the                                                                 
     Delta/Greely  REAA.    The  Department  of  Community  and                                                                 
     Regional  Affairs chose  not to fund  this application.  A                                                                 
     borough steering  committee was formed but was  not funded                                                                 
     by the  state.  Without state  assistance to research  and                                                                 
     develop  a budget and petition,  the committee was unable                                                                  
     to produce  a petition in the  best interest of the  state                                                                 
     or the area  residents.  If the state would like  to see a                                                                 
     borough  established,   it  seems  fair  that  they  offer                                                                 
     assistance   to  the  affected   community.    This   bill                                                                 
     effectively  allows  the state  to  dictate what  type  of                                                                 
     government will be established  with no local control over                                                                 
     the process and without the right to vote.                                                                                 
MR. GLENN  MARUNDE,  testifying via  teleconference  from Tok,  read                                                            
from a transcript entitled  "Transcript - Review of Article X of the                                                            
Alaska Constitution  February 13 and  14 1996."  The Local  Boundary                                                            
Commission (LBC) hosted this meeting.                                                                                           
Mr. Marunde read  certain sections from the transcript  to point out                                                            
the qualifications  and opinions of  Judge Thomas Stewart.   He said                                                            
that far too  much of the expert testimony  regarding Article  10 of                                                            
Xe state  constitution, regarding  the need  for local and  regional                                                            
governments,  comes from just  two men, Mr.  Vic Fisher and  Mr. Dan                                                            
Bockhorst.    Both   men  have  great  knowledge  concerning   local                                                            
government,  and Mr.  Fisher was  at the  constitutional  convention                                                            
when the constitution  was drafted.  In Mr. Marunde's opinion,  both                                                            
men strongly endorse the  Model Borough Plan for regional government                                                            
devised by  the Local Boundary  Commission.   Both men seem  to feel                                                            
that  the intent  of  Article  X is  to  move  in the  direction  of                                                            
establishing a wall-to-wall  layer of government, imposed over every                                                            
square inch of  Alaska.  Mr. Marunde made the following  statements:                                                            
     While I disagree  with their philosophies, I respect  both                                                                 
     men for  knowledge and I thank  them for their service  to                                                                 
     Alaska.  But,  in my  opinion, when  both men  claim  that                                                                 
     Article X promotes their  philosophies they are just plain                                                                 
     Gentlemen, before you vote  SB 48 out of committee, I urge                                                                 
     you  to  seek   out  other  opinions  from  knowledgeable                                                                  
     persons.  I urge you to give  weight to the philosophy  of                                                                 
     Judge  Stewart  whom  I have  quoted  from  transcript.  I                                                                 
     suspect that a majority  of the delegates who participated                                                                 
     in the  constitutional convention  with him believed  that                                                                 
     some  parts  of  the  unorganized  borough  would  remain                                                                  
     unorganized  forever.  Give  respect  and weight  for  the                                                                 
     testimony  you  are  hearing  over  this  teleconference,                                                                  
     And,  most important  of all, when you  get home tonight,                                                                  
     fire  up your computer,  bring up any  browser and search                                                                  
     for Alaska  State Constitution.  In about five seconds  it                                                                 
     will  pop up.  Scroll  down to  Article  10 and  read  and                                                                 
     reread it again. Article  X is beautiful for its plain and                                                                 
     simple  language. You may find  it to be relaxing after  a                                                                 
     long days  work. Make up your  own mind of what Article  X                                                                 
     does and does not say.                                                                                                     
     I  challenge  you  to find  even  the  slightest  hint  of                                                                 
     intention  to organize all of  the unorganized borough  or                                                                 
     to  create any form  in regional government,  anywhere  in                                                                 
     Alaska.  Clearly,  our  constitution   calls  for borough                                                                  
     government to be local government, not regional.                                                                           
     Please do not vote in support of SB 48.                                                                                    
Number 339                                                                                                                      
MS. MARY  BONIN, testifying  via teleconference  from Chitina,  said                                                            
there were  45 people with  her who were  outraged because  they had                                                            
not received notice of  the teleconference, and because they are not                                                            
sure what  has transpired  in the past.   The people attending  this                                                            
teleconference  with Ms. Bonin feel  that past meetings are  invalid                                                            
because they  were not included.   They want  it on the record  that                                                            
they are filing  a protest against  the entire commission's  program                                                            
because they were not notified.                                                                                                 
Number 365                                                                                                                      
MR.  ERIC  NASHLUND,  testifying  via  teleconference   from  Copper                                                            
Center,  said  he resents  politicians  attempting  to  deprive  the                                                            
people of the  state.  Alaska's constitution  specifically  provides                                                            
for  unincorporated  boroughs.   Legislators   are people  sworn  to                                                            
defend  the constitution  and trying  to deny the  peoples right  to                                                            
vote on incorporation  is, in Mr.  Nashlund's opinion, impeachable.                                                             
MR. ROY  BRITTON,  testifying via  teleconference  from Kenny  Lake,                                                            
said he has  lived in the area for  40 years and has never  seen the                                                            
need for a borough.   A lot of people in the area  are barely making                                                            
due and if they  were taxed they would probably go  out of business.                                                            
Mr. Britton sees no need for SB 48.                                                                                             
MR. JOHN  WENGER,  testifying via  teleconference  form Kenny  Lake,                                                            
commented that  bureaucrats do not know what is going  on and should                                                            
not force  an unorganized  borough  on the  people.   Mr. Wenger  is                                                            
opposed to SB 48.                                                                                                               
MR. ROBERT FITHIAN,  testifying via teleconference  from Kenny Lake,                                                            
said he is opposed  to the blanketing of existing  non-borough lands                                                            
with the incorporation  of new boroughs.  Incorporated boroughs have                                                            
resources,  both natural and  human, that  require a more  regulated                                                            
government.   Any or most of the unincorporated  areas have  not had                                                            
and do not have  this requirement.  Many of these  areas do not have                                                            
the resources  to support a borough or taxes.  They  do not have the                                                            
employment opportunities  that organized boroughs have.  Mr. Fithian                                                            
believes that  SB 48 carries an unjust  assumption that these  areas                                                            
can carry additional  costs, which will burden their  struggle.  Mr.                                                            
Fithian asked the committee  to consider SB 48 as an unjust bill for                                                            
rural residents.                                                                                                                
Number 427                                                                                                                      
MR. ROBERT  HURST, testifying  via teleconference  from Kenny  Lake,                                                            
said he has to  travel over 100 miles in the summer  to get a steady                                                            
job so he can  make it through the  winter.  Taxing his place  would                                                            
be telling him  that the state wants to take his property  away from                                                            
him.    There  is  no  fire  or  police  protection   in  his  area.                                                            
Therefore, being  incorporated into a borough without  being able to                                                            
get the amenities of a borough is an outrage.                                                                                   
MS. CAROLE  MORRISON, testifying  via teleconference  from  Chitina,                                                            
said  she has  educated  her five  children  with the  help a  state                                                            
program.  Ms. Morrison  lives a subsistence lifestyle that just gets                                                            
her through the  winter and there is not enough money  left over for                                                            
MS. JOY  FORD, testifying  via  teleconference  from Chitina,  noted                                                            
that last summer  she did a survey  for water and sanitation  in the                                                            
Chitina area.   One of the things the people were  adamant about was                                                            
that they wanted  the amenities of an incorporated  borough but they                                                            
wanted to provide  for these things themselves.  People  do not want                                                            
improvements  that would create taxes  or government presence.   The                                                            
people of Chitina  are very upset  that they have not been  notified                                                            
of meetings, allowing them input on these types of decisions.                                                                   
CHAIRMAN TORGERSON  asked Ms. Ford  to send the committee  a copy of                                                            
her survey.                                                                                                                     
MR. DANIEL  BOONE, testifying  via teleconference  from Kenny  Lake,                                                            
said he was upset  that there was no notification  for this meeting.                                                            
The people of Chitina do  not want a borough; there is no economy to                                                            
support one.   The people in charge  in Juneau have no idea  what is                                                            
going on in  his area.  The people  of Chitina would like  more time                                                            
to study this bill, but at this time they are opposed to SB 48.                                                                 
Number 492                                                                                                                      
MR. DANIEL STEVENS,  testifying via teleconference  from Kenny Lake,                                                            
said  he was raised  in Anchorage  and  has seen  what an  organized                                                            
borough can  do to a person.  The  children of Chitina are  bused an                                                            
hour to and  from Kenny Lake in the  winter, and the residents  feel                                                            
they have been neglected  because they have not received improvement                                                            
funds for their town.                                                                                                           
Number 512                                                                                                                      
MS. DENNY K. WEATHERS,  testifying via teleconference  from Cordova,                                                            
read the following statement:                                                                                                   
     Every  year  since 1996  except  2000, a  few politicians                                                                  
     decided to  push an unconstitutional piece of  legislation                                                                 
     designed to take the vote  away from the people.  SB 48 is                                                                 
     nothing  more  than trying  to  force  mandatory boroughs                                                                  
     under the guise of funding education.                                                                                      
     In 1996 it was SB 280, where  95% of the testimony opposed                                                                 
     the  bill.  1997, SB  30, same thing.   Then came SB  337,                                                                 
     same thing,  and all these bills  were basically the  same                                                                 
     as SB 48.  Each year the  people have to re-fight the same                                                                 
     issue, only difference is the bill number.                                                                                 
     Under  existing procedures for  borough incorporation,  it                                                                 
     allows  for the  resident voters  of the area  to vote  on                                                                 
     whether  they want  to incorporate  or not.   A few  areas                                                                 
     with the people's  vote have incorporated or annexed  such                                                                 
     as Yakutat,  but it was the will  of the people that  made                                                                 
     the decision, not the legislature.                                                                                         
     Under SB 48  there is nothing that guarantees  any type of                                                                 
     school  funding  and, as  you know,  dedicated  funds  are                                                                 
     restricted to certain things,  and education is not one of                                                                 
     The  writer of this  bill and the sponsors  are trying  to                                                                 
     fleece the public with fictitious statements.                                                                              
     According to Article 12,  Section 5, Oath of Office, those                                                                 
     in the legislature take  an oath to support and defend the                                                                 
     constitution,  both  U.S. and  state.   This  oath is  not                                                                 
     being honored.                                                                                                             
     The preamble  says, we the people  of Alaska...not we  the                                                                 
     legislature.   The constitution  says all political  power                                                                 
     is inherent  in the people, not the legislature.   And, is                                                                 
     instituted society for the  good of the people as a whole,                                                                 
     not  for the  good of  the legislature?   Some  of you  in                                                                 
     Juneau  want  to  use  we  the  people  as a  moneymaking                                                                  
     The people  in the unorganized boroughs have offered  many                                                                 
     solutions  to school  funding  - the  legislature ignores                                                                  
     Most  importantly, at  least in Prince  William Sound,  it                                                                 
     should  be noted  that  all borough  studies  to present,                                                                  
     including  the PWS Borough Feasibility  Study of June  25,                                                                 
     1997, along with the SB  337 (mandatory borough) sectional                                                                 
     analysis   and  policy  concerns  by  the  Department   of                                                                 
     Community  and Regional Affairs,  March 18, 1998, and  the                                                                 
     Alaska  Legislative Digest -  3/15/96 - concerning SB  280                                                                 
     mandatory  incorporation of boroughs, show that  mandatory                                                                 
     boroughs are  a failure and that rural boroughs  without a                                                                 
     special  revenue niche would  be those in fiscal trouble,                                                                  
     like much of the unorganized borough.                                                                                      
     Before you vote, please check the facts.                                                                                   
MR. ERIC WEATHERS, testifying via teleconference from Cordova, read                                                             
the following statement:                                                                                                        
     We do not  need another layer of socialistic bureaucracy;                                                                  
     we need the  legislature to start peeling back  the layers                                                                 
     of tyranny.  SB 48 is not  a bill to make people pay their                                                                 
     fair share  for education, it is to squeeze the  last drop                                                                 
     of blood from those that  work and support themselves.  It                                                                 
     is only to benefit the social  services, welfare cases and                                                                 
     government.   You the  legislature were  voted in because                                                                  
     you  were  trusted  to  not  sell  us  any  further   into                                                                 
MR. DEAN CURRAN,  testifying via teleconference  from Cordova,  read                                                            
the following statement:                                                                                                        
     I am against  the legislature forcing a mandatory  borough                                                                 
     on any  place in the  state of Alaska.   I see it as  just                                                                 
     another  form of taxation,  another  layer of government,                                                                  
     another  way to make  higher administrative  costs to  the                                                                 
     local area.  I am a commercial  fisherman.  The state gets                                                                 
     half of the raw fish tax  that I produce.  We have a local                                                                 
     sales tax, which helps to  support our school system.  Why                                                                 
     should  I  have  to support  rural  education  attendance                                                                  
     areas? I hear the city officials  of Cordova say they want                                                                 
     to  incorporate  into  a borough.    I am  a  resident  of                                                                 
     Cordova  for 49  years, I don't  want any  borough.   They                                                                 
     haven't  even brought  this to  the local  people here  in                                                                 
     Cordova to decide on.                                                                                                      
MR. LAIFE  WEATHERS,  testifying  via teleconference  from  Cordova,                                                            
said he  is a resident of  Prince William  Sound.  He is opposed  to                                                            
any and all government - he opposes SB 48.                                                                                      
Number 575                                                                                                                      
MR. WAYNE SHAFER,  testifying via  teleconference from Gakona,  said                                                            
he is  opposed to  SB 48  for many reasons.   The  main problem  for                                                            
Slana  is that it  does not  have a viable  tax base.   Many  of the                                                            
residents  are retired and  live on fixed incomes.   SB 48  is being                                                            
touted as  funding for education,  but line  2 gives the option  for                                                            
other  programs, without  defining  what these  other programs  are.                                                            
Mr.  Shafer believes  this  is in  direct  violation  of Article  9,                                                            
Section 7, of  the constitution.  Slana recently received  a limited                                                            
number of  grants providing  for road maintenance  and limited  fire                                                            
protection.  If SB 48 were  enacted, this money would be lost to the                                                            
municipalities.  The only  thing SB 48 would do for Slana is depress                                                            
an already depressed area.                                                                                                      
SIDE B                                                                                                                        
MR. ALBERT REYERSE, testifying  via teleconference from Gakona, said                                                            
the annexation  of an unorganized borough into a tax-paying  borough                                                            
is not needed.                                                                                                                  
MS. MICHELLE APLEY, testifying  via teleconference from Gakona, said                                                            
she is opposed  to SB 48.  The population  in her area is  not large                                                            
enough to support  a borough.  There is no work in  her area and the                                                            
people could never pay  - they would lose their homes.  She put in a                                                            
special appeal to Senator Wilken against SB 48.                                                                                 
MR. KIRK  ELLIS, testifying  via teleconference  from Gakona,  noted                                                            
that a borough  would do  nothing for him.   People who live  in the                                                            
Bush have a lot of things  that would be taxed and these taxes would                                                            
take away everything.                                                                                                           
MR. THOR HOLMBOE,  testifying via  teleconference from Gakona,  said                                                            
this situation is too complex  for a yes or no.  Before SB 48 is put                                                            
to a vote,  he would like the legislature  to show some sensibility                                                             
in the expenditure of money - show a return for the dollar.                                                                     
Number 535                                                                                                                      
MR. JAY CAPPS,  testifying via teleconference  from Gakona,  said he                                                            
is a storeowner  in Slana.   He has seen  a 60 percent reduction  in                                                            
population over  the last five and one half years.   Most of this is                                                            
because of  the rising cost  of fuel and lack  of jobs.   Additional                                                            
taxes  would  hurt  the economy  with  the  result  of  more  people                                                            
leaving.   Mr.  Capps is  opposed  to SB 48  and  feels that  people                                                            
should be able to vote on this issue.                                                                                           
MR. BILL SEEGER, testifying  via teleconference from Gakona, said he                                                            
sees no  need for  creating another  borough  just because  existing                                                            
boroughs  need more  money for  education.   Mr.  Seeger thinks  the                                                            
sales tax should be increased to reach this end.                                                                                
MS. JANE BROWN, testifying  via teleconference from Glennallen, said                                                            
she is a  10-year resident  of Copper Basin  and a member of  Copper                                                            
River  Residents Against  Bureaucracy  (CRRAB).   She opposes  SB 48                                                            
because  it  is  unconstitutional  and  it  is  riddled  with  false                                                            
information.   She is not anti-government or anti-tax.   She wonders                                                            
how  a  bill  can be  supported  if  the  sponsors  will  not  allow                                                            
unorganized residents to vote on their own destiny.                                                                             
Number 469                                                                                                                      
MR. MATTHEW KRINKE,  testifying via teleconference  from Glennallen,                                                            
thanked  the committee  for listening  to  the people  and hoped  it                                                            
would take the  peoples advise and not pass SB 48.   People will pay                                                            
for education,  but taxing their land will cause them  to lose their                                                            
land.  They are  being taxed through the pipeline  and that money is                                                            
going into the general fund.                                                                                                    
MR. JOHN KUNIK, testifying  via teleconference from Glennallen, said                                                            
as a member  of CRRAB he  is opposed to SB  48.  The legislature  is                                                            
attempting to  establish another level of government.   According to                                                            
the Wall  Street Journal,  the  average amount  of state  government                                                            
spending  in the United States  was 5.8 percent,  the highest  spent                                                            
was Alaska  at 13.5 percent.   The resident's  of his community  pay                                                            
user  fees  for  different   services,  and  they   also  have  high                                                            
unemployment.   If portions of the unorganized borough  are annexed,                                                            
they will  lose subsistence  rights  - they will  not be  considered                                                            
rural.    He also  noted  that  unorganized  boroughs  do  not  have                                                            
representation on the boundary commission.                                                                                      
MR. HARRY TERMIN, testifying  via teleconference from Copper Center,                                                            
commented that  he is not anti-tax  or anti-government but  the less                                                            
of each the  better.  The cost of  living in the Copper River  Basin                                                            
is very high,  and the people have  to go to Fairbanks for  about 90                                                            
percent of  their needs.  There is  a very small portion  of land in                                                            
the  Copper   River  Basin   that  will   fall  under  the   taxable                                                            
classification.   Mr. Termin noted  there would be a large  cost for                                                            
becoming a borough and  a large percent of the tax burden would fall                                                            
on a small percent of the  people.  The law needs to be realigned so                                                            
that a property  tax is not the only tax allowed -  possibly a sales                                                            
or income tax could be used.                                                                                                    
Number 385                                                                                                                      
MS.  GLORIA   STICKWAN,   representing  Tazlina   Village   Council,                                                            
testified via teleconference  from Copper Center.  Ms. Stickwan said                                                            
the people  of her area do not have  jobs and they will not  be able                                                            
to pay for an organized borough.                                                                                                
MR. RUSS BOWDRE, testifying  via teleconference from Delta Junction,                                                            
read the following statement:                                                                                                   
     In the sponsor's  statement he suggests that residents  in                                                                 
     an  unorganized  borough  make  no  contributions  to  the                                                                 
     education  fund.   While we may  not pay  taxes per se,  I                                                                 
     know that  Delta residents spend  a lot of time and  money                                                                 
     in  Fairbanks  supporting  those businesses  that  do  pay                                                                 
     Paragraph 3, lines 2 through  4 of the sponsor's statement                                                                 
     says  that some  areas of  the state may  meet applicable                                                                  
     standards  for  annexation  to  current  boroughs.   If  a                                                                 
     portion  of  an unorganized  borough  that is  taxable  is                                                                 
     annexed,  that reduces  the future  possibilities for  the                                                                 
     remaining  part of the unorganized  borough to be able  to                                                                 
     sustain a  borough government.  But the biggest  complaint                                                                 
     I have with  this proposed bill is that it takes  away the                                                                 
     right to vote, the right  to govern ourselves.  Nowhere in                                                                 
     this bill  is a provision made  for the people to vote  on                                                                 
     whether  they want to be in a  borough or not.  And  then,                                                                 
     on  top of that,  the legislature  does not  even have  to                                                                 
     vote  or  approve  - they  simply  just  'not  reject  the                                                                 
     There  is no  need  to create  a new  option  for borough                                                                  
     incorporation.   There is no need for this legislation  at                                                                 
     all.   People make choices about  where they live and  the                                                                 
     type of services they desire.                                                                                              
MR.  ANDREW  LEONARD,  testifying  via  teleconference  from  Copper                                                            
Center, said  SB 48 is a total waste  of time and he is against  it.                                                            
MR. TOM  LAMBERT,  testifying via  teleconference  from Kenny  Lake,                                                            
said there  are a  lot of people  in his  area who  could not  pay a                                                            
property tax.  Mr. Lambert  thinks that legislators should be making                                                            
bills  that block  this type  of thing,  rather  than creating  this                                                            
problem.  Once an organized  borough is formed it cannot be changed,                                                            
and  people will  lose  their  right to  ownership.    He asked  the                                                            
committee to look at SB 48 hard, because it is a bad deal.                                                                      
Number 268                                                                                                                      
MR. SCOTT REES, testifying  via teleconference from Kenny Lake, said                                                            
he moved from  California to Copper Center two years  ago because of                                                            
the  minimal  interference   by government.     He  sacrifices  many                                                            
services  by living where  he does,  but he has  been amazed  by the                                                            
volunteerism in  the Kenny Lake area.  It is not true  that everyone                                                            
else  is subsidizing  them,  they have  a pipeline  running  through                                                            
their valley  and they  do not get  any direct money  from it  - the                                                            
money goes directly to the state.                                                                                               
MR. SAM LIGHTWOOD,  testifying via  teleconference from Kenny  Lake,                                                            
said he feels that Kenny  Lake does not need an unorganized borough.                                                            
He is not in  favor of a property  tax but an income tax  throughout                                                            
the state would be good.                                                                                                        
MS. DIANE  ELLSWORTH, testifying  via teleconference  from  Chitina,                                                            
said  Chitina is  ready for  some type  of government  but it  needs                                                            
self-government.   People do not need  government that is  forced on                                                            
Number 165                                                                                                                      
MR. STEVE GINNIS, testifying via teleconference from Fairbanks,                                                                 
read the following statement:                                                                                                   
     My  name is  Steve  Ginnis.   I am  President  for Tanana                                                                  
     Chiefs  Conference,  Inc.,  and I  would like  to testify                                                                  
     against SB 48.                                                                                                             
     Over the  years, several bills  have been introduced  into                                                                 
     the  Alaska  legislature  that  would  require  mandatory                                                                  
     borough  incorporation  throughout the  state.  Often,  as                                                                 
     with  this  bill,  the argument  is  made  that mandatory                                                                  
     borough  incorporation   is  needed  to  insure  that  all                                                                 
     citizens  of the  state are  paying their  fair share  for                                                                 
     educational services. The  charge is that residents of the                                                                 
     rural areas  are not paying taxes to support their  school                                                                 
     districts.   The  problem  with such  bills  is that  they                                                                 
     fundamentally   misunderstand   educational   funding   in                                                                 
     Alaska.  Moreover, we  fear that proponents  of mandatory                                                                  
     incorporation  do not fully appreciate  the unanticipated                                                                  
     associated costs and consequences  of organizing the state                                                                 
     into boroughs.  Sadly, rural  residents are not seriously                                                                  
     believed  in this debate,  because  proponents of borough                                                                  
     incorporation  focus  only upon  taxing the  residents  of                                                                 
     rural   Alaska    without   seriously   considering    the                                                                 
     consequences.  We  would urge  you  to seek  a creditable                                                                  
     analysis of the true costs  and consequences of this bill.                                                                 
     In  particular,  we would  recommend  that  the committee                                                                  
     request  the Departments of Education,  Revenue, Commerce                                                                  
     and Economic Development,  and Natural Resources to make a                                                                 
     presentation  to  the committee  to answer  the following                                                                  
     For the Department of Revenue:                                                                                             
     1) What is  the loss of revenue to the state general  fund                                                                 
     from taxes  derived from the  Alaska pipeline if boroughs                                                                  
     are  organized  along  the entire  pipeline  corridor  and                                                                 
     those  boroughs  levy   a maximum   property  tax  on  the                                                                 
     2)  What  other  tax  revenues  (including  the  type  and                                                                 
     amount)  collected   by the  state  government   would  be                                                                 
     diverted  to local  governments  if all the  areas in  the                                                                 
     unorganized borough were to organize into boroughs?                                                                        
     3) What  intergovernmental transfers  (including the  type                                                                 
     and  amount)  currently received  by  the state  from  the                                                                 
     federal government would  be diverted to local governments                                                                 
     if  all the  areas  in  the unorganized  borough  were  to                                                                 
     organize into boroughs?                                                                                                    
     For the Department of Education:                                                                                           
     1) What is the total amount  of intergovernmental revenues                                                                 
     currently received by REAA's  from the federal government?                                                                 
     2) What is the total amount  of intergovernmental revenues                                                                 
     that would  be received in the future by all new  boroughs                                                                 
     if  all the  areas  in  the unorganized  borough  were  to                                                                 
     organize into boroughs?                                                                                                    
     3)  What  is   the  total  cost  to  the  state   in  bond                                                                 
     reimbursement  costs to all new boroughs if all  the areas                                                                 
     in the unorganized borough  were to organize into boroughs                                                                 
     and  pass   bond  issues  to   fund  currently  requested                                                                  
     educational capital improvements?                                                                                          
     For the Department  of Community and Economic  Development                                                                 
     1)  What  new  additional   taxes  and  intergovernmental                                                                  
     transfers  from the federal government would be  generated                                                                 
     if the  all the areas in the  unorganized borough were  to                                                                 
     organize into boroughs?                                                                                                    
     2) What is  the total cost which would be incurred  by all                                                                 
     new boroughs  in collecting taxes if all the areas  in the                                                                 
     unorganized  borough were to  organize into boroughs,  and                                                                 
     they  were to  impose a  tax to  fund the  required  local                                                                 
     contribution  under AS 14.17310, and the additional  costs                                                                 
     of   maintaining    a   minimum   level   of   government                                                                  
     administration based upon  the current average of approved                                                                 
     indirect rates of municipalities in the state?                                                                             
     For the Department of Natural Resources:                                                                                   
     1) What is  the total amount of land that the  state would                                                                 
     have  to transfer  as  municipal  entitlement  to all  new                                                                 
     boroughs if all the areas  in the unorganized borough were                                                                 
     to organize into boroughs?                                                                                                 
     2)  What  would   be  the  total  cost  incurred   by  the                                                                 
     Department  of  Natural  resources  to transfer  all  such                                                                 
     lands,  and does the  state have sufficient  land to  meet                                                                 
     this obligation in all areas of the state?                                                                                 
     We  suspect that  the answer  to these  questions will  be                                                                 
     that the cost  of organizing the state into boroughs  will                                                                 
     have the following effect:                                                                                                 
        · Divert     current    state    tax   revenues     and                                                                 
          intergovernmental transfers to local governments                                                                      
          with a disproportionate increase in administrative                                                                    
        · Fail to produce any appreciable increase in tax or                                                                    
          intergovernmental revenue available for school                                                                        
        · Exhaust state school construction bond reimbursement                                                                  
        · Over obligate available state owned land for                                                                          
          municipal land entitlements in many areas of the                                                                      
     When the legislature has  honestly looked at this issue in                                                                 
     the  past,  the conclusion  has  been  that the  costs  of                                                                 
     mandatory  borough incorporation is much greater  than the                                                                 
     realistic  benefits  to the  state as  a whole  or to  the                                                                 
     residents  of the future boroughs.  Please don't take  our                                                                 
     word  for it. We would  challenge this  committee to  make                                                                 
     the above  inquiries and we believe that you will  come to                                                                 
     agree  with   us  that  these  types  of  bills   are  not                                                                 
     particularly well thought out.                                                                                             
Tape 2, Side A                                                                                                                  
MR. PAT W. SWEETSIR,  testifying via teleconference  from Fairbanks,                                                            
said there  is not much  of a tax  base in his  area.  Mr.  Sweetsir                                                            
feels SB 48 is bad legislation.                                                                                                 
MR. PHILIP SKILBRED,  testifying via teleconference  from Fairbanks,                                                            
said he  is president  and petitioners  representative  for the  Two                                                            
Rivers School  Committee.  The revenue Alaska gets  is not generated                                                            
in or  by the cities  and municipalities  of this  state.   Revenues                                                            
come almost  exclusively from the  rural areas - resources  that are                                                            
developed  and extracted from  those areas.   SB 48 will only  cause                                                            
more bitterness and an  even larger rift will grow between urban and                                                            
rural factions  of the state.  SB 48 will steal the  valuable assets                                                            
of the rural unincorporated  areas and put them into  the pockets of                                                            
the urban power brokers.   Two Rivers was forced to be in a borough.                                                            
It has very  little to show from the  oil wealth and has  paid heavy                                                            
taxes for over 35 years  - to a borough which has repeatedly refused                                                            
to build a secondary school for an area of over 1,200 people.                                                                   
Number 129                                                                                                                      
MR. BURT WARD,  testifying via teleconference from  Glennallen, said                                                            
he  is   a  28   year  resident   of  Alaska.     Taxation   without                                                            
representation is illegal  and has been voted down before.  Mr. Ward                                                            
said the  state does  gain a  lot of  revenue from  people in  rural                                                            
MR. WAYNE MACMURRAY, testifying  via teleconference from Slana, said                                                            
he agreed with  everything said during  the teleconference  meeting.                                                            
There  were 30 people  sitting  in the room  with him  who were  100                                                            
percent against SB 48.                                                                                                          
MR. JOHN SMITH, testifying  via teleconference from Kenny Lake, said                                                            
if there is  a property tax in Slana  an incredible amount  would be                                                            
exempt - "it has native  land and native homes written all over it,"                                                            
- and a division may inadvertently be created.                                                                                  
CHAIRMAN TORGERSON thanked the 45 people who testified.                                                                         
SENATOR  LINCOLN  expressed her  appreciation  to the  Chairman  for                                                            
taking testimony  on a Saturday, which  may have been the  only time                                                            
people  could  testify.    She  also  thanked  all  the  people  who                                                            
testified.   Senator  Lincoln said  there were  10 communities  that                                                            
testified,  and even  though the  committee could  not respond,  she                                                            
took notes of everything that was said.                                                                                         

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