Legislature(1997 - 1998)
02/19/1998 01:32 PM Senate TRA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 264 - AID FOR MUNICIPAL ROAD MAINTENANCE
SENATOR TORGERSON, sponsor of SB 264, gave the following overview
of the legislation. SB 264 takes funds for road maintenance out of
the revenue sharing program and creates a stand alone program. The
funds would come from a portion of the 8 cent per gallon fuel tax.
Over the years, the municipal road maintenance revenue sharing
portion decreased from $2500 per mile to $700 per mile because this
program was incorporated into the larger revenue sharing program
that is subject to reductions and the road money was never
identified. SB 264 will increase the total appropriation to this
program: currently $2.6 million is being shared with local
governments, the bill will increase the amount to $8 million. The
intent of SB 264 is to increase the amount to local governments for
road maintenance to $1,000 per mile, which constitutes a 40 percent
increase. A $3.5 million surplus will be used for two purposes:
to continue with paving and upgrade for the road transfer program;
and to provide a pot of money to equalize the funding so that if a
new road was taken over by a local government, the entire pot would
not be reduced by that amount of road miles. In essence, it would
keep the $1,000 per mile constant even though new roads would be
added to the system. Any remaining balance will be used for road
construction and transferred to local governments.
SENATOR TORGERSON explained his proposed amendment to SB 264 as
follows. "In the revenue sharing portion currently in statute, if
municipal governments -- once they run through the formula for
revenue sharing and the different formulas, if the amount that is
to be paid to them is less than $40,000, then they would receive
the $40,000 -- the minimum entitlement portion of this program. If
we just leave that constant and not make this amendment then they'd
be paid for roads under the one program, through the formula to get
up to the $40,000, as well as being paid separately for the roads.
So what this does is take the road portion out of that and reduce
the minimum entitlement share by the amount equal to the amount
that has come out for roads, so again, to these minimum entitlement
communities it would still be an -- it would be an increase to them
because they are getting more money for the road miles but it does
separate the programs and keep them entirely separate. That's
something we overlooked when we drafted the bill at first."
MR. PAT POLAND, Director of the Municipal Assistance Division in
the Department of Community and Regional Affairs (DCRA), gave the
following testimony. He noted Mr. Bill Ralston, program manager
for the Revenue Sharing Program, was present in the audience, and
could respond to technical questions. DCRA supports the spirit in
which this legislation is offered, that is to support local
governments in service delivery. DCRA supports financial aid to
local governments and believes they are a vital and key part of the
public service delivery system. The Governor's FY 99 budget
proposal contains no cuts to the revenue sharing program and the
Administration supports transfer of state services to local
governments, which SB 264 promotes. DCRA has two fundamental
concerns with SB 264. The first is dealing with revenue sharing
local government financial support on a piecemeal basis.
Essentially, it peels off a pot of the money and places an isolated
priority on it. The second concern is that when the formula for
the formula entitlement program is changed, winners and losers are
created. If the appropriation was at the full amount proposed, all
participants would win; if the amount remains at the current level,
the funds will shift from the smaller rural areas to the urban
areas. DCRA would like to see a process that gives all of the
impacted communities a chance to comment and look for alternatives.
TIM ROGERS, Legislative Program Coordinator for the Municipality of
Anchorage, spoke in his capacity as the Chairman of the
Transportation, Utilities and Environment Subcommittee of the
Alaska Municipal League (AML). AML supports passage of SB 264 for
three reasons. SB 264 will stabilize road maintenance funding.
Funding through the revenue sharing program was at a level of $2500
per mile 12 years ago, today the average is $734, and for some
municipalities, less than that. AML believes it is important that
the gasoline tax be identified as the funding source. AML also
believes it is important to have a mechanism for a transfer of
responsibility for some of the roads from the state to local
governments providing that the transfer has a funding mechanism for
continued maintenance and that the roads be brought up to a
specific standard prior to the transfer.
SENATOR HALFORD asked Mr. Rogers if he thought SB 264 will create
an incentive to pass increases in gasoline taxes. MR. ROGERS
thought it may.
Number 556
SENATOR TORGERSON pointed out he had requested that 3 cents per
gallon of the gasoline tax be used, but the legal drafters advised
him to include a percentage. He would have preferred to have
included a set amount but the 8 cents per gallon has other
restraints on it from prior legislation.
SENATOR HALFORD indicated if a percentage of the total is used,
there is an incentive to increase the tax. SENATOR TORGERSON
agreed.
MR. TOM BODECKER commented that he agreed with Mr. Rogers' position
on SB 264.
MR. JIM SWING indicated that the Matanuska Borough Administration
and its Department of Public Works support SB 264. They presented
some graphs to the Deferred Maintenance Task Force that show the
decrease in revenue sharing for road maintenance and the increase
in taxes in their area. The Department of Public Works maintains
over 1,000 miles of road in the municipality and sees the need for
a stable funding source for road maintenance. The Borough has been
negotiating with DOTPF for take over of secondary roads and
supports any mechanism to upgrade those roads and allow the
transfer.
MR. OCIE ADAMS stated he is taking no position on either piece of
legislation but is on a fact finding mission for the Road Advisory
Committee for its meeting tonight. He commented that currently the
Matanuska-Susitna Borough does not have road powers. The taxpayers
have resisted granting the Borough road powers for consolidation of
road service areas. He questioned whether SB 264 will force that
consolidation since Section 2 requires recipients to have road
powers to receive funds from the motor fuel tax.
SENATOR TORGERSON said boroughs have to exercise certain powers now
to get the money so he did not see how SB 264 would have any effect
on the revenue sharing pot. He emphasized it is not his intent to
force some kind of consolidation of road service districts and he
would be willing to add clarifying language to that effect.
MR. ADAMS said he would appreciate clarification because Section
2(a) says that municipalities who exercise road maintenance powers
are entitled to receive funds. The Borough does not exercise road
service area powers over the entire service area, only on
individual service areas through the appropriation of funds from
residential taxes. It makes sure that money goes directly back to
that particular service area as it cannot use those funds in
another service area.
SENATOR TORGERSON explained the Borough has non-areawide powers.
Cities have the road power so all boroughs, except unified
boroughs, adopted non-areawide powers through the service
districts. That applies to all except unified boroughs. He
repeated if the Borough is currently receiving funds, it has some
sort of power on the books.
MR. ADAMS said the Borough is currently receiving money. He noted
the general consensus of the members of the Mat-Su Road Advisory
Board is that SB 264 will force consolidation which they do not
support.
TAPE 98-3, SIDE B
Number 549
MR. POUCHARD provided the following testimony on SB 264. DOTPF
unequivocally supports the objective of improving and transferring
roads to local governments and currently has a program that has not
proved to be very successful. The main stumbling block has been
that local governments do not want to pick up the costs of road
maintenance because the current level of revenue sharing they
receive is not a great enough incentive. DOTPF wants to ensure
that the issue of road maintenance is reviewed comprehensively,
taking into account the state's needs for state roads, so that
doors are not closed to future options regarding state maintenance.
Mr. Pouchard indicated DOTPF has a few technical concerns with SB
264.
SENATOR HALFORD asked if DOTPF supports the repeal of the existing
dollars per mile provision. MR. POUCHARD asked Senator Halford if
he was referring to the amendment. SENATOR HALFORD clarified he
was referring to the repealer in Section 5. MR. POUCHARD said he
would not feel comfortable saying DOTPF supports the repealer; but
it does support the concept of transferring roads to local
governments and seeing that local governments have adequate
maintenance funds.
KEVIN RITCHIE, Executive Director of the Alaska Municipal League,
echoed Mr. Rogers' and Mr. Bodecker's testimony and thanked Senator
Torgerson for his support. AML hopes legislative support for
revenue sharing remains strong.
SENATOR GREEN asked, if this money is designated for this
particular function, who will receive less. SENATOR TORGERSON
replied there is no way to track that because the 8 cent per gallon
goes directly into the general fund. He added SB 264 will cost $4
million so that money will have to come from another program which
has not been identified.
CHAIRMAN WARD stated that Senator Torgerson's amendment was not
adopted at this time. He asked Senator Green to work with Senator
Torgerson to prepare a committee substitute to SB 264 also.
| Document Name | Date/Time | Subjects |
|---|