Legislature(1995 - 1996)
04/11/1996 01:04 PM House CRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
April 11, 1996
1:04 p.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Ivan Ivan, Co-Chair
Representative Jerry Mackie
Representative Kim Elton
Representative Al Vezey
Representative Pete Kott
Representative Irene Nicholia
MEMBERS ABSENT
All members were present.
COMMITTEE CALENDAR
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 20(FIN)
"An Act relating to certain programs of state aid to municipalities
and recipients in the unorganized borough; and providing for an
effective date."
- PASSED OUT OF COMMITTEE
PREVIOUS ACTION
BILL: SB 20
SHORT TITLE: STATE AID TO MUNIS & UNORGANIZED BOROUGH
SPONSOR(S): SENATOR(S) TORGERSON, Pearce, Kelly, Zharoff, Taylor
JRN-DATE JRN-DATE ACTION
01/06/95 18 (S) PREFILE RELEASED - 1/6/95
01/16/95 19 (S) READ THE FIRST TIME - REFERRAL(S)
01/16/95 19 (S) CRA, FIN
02/15/95 288 (S) SPONSOR SUBSTITUTE INTRODUCED-SAME
TITLE
02/15/95 288 (S) CRA, FIN
02/22/95 (S) CRA AT 1:30 PM BUTROVICH ROOM 205
02/22/95 (S) MINUTE(CRA)
02/07/96 (S) CRA AT 1:30 PM BUTROVICH ROOM 205
02/07/96 (S) MINUTE(CRA)
02/14/96 (S) CRA AT 1:30 PM BUTROVICH ROOM 205
02/14/96 (S) MINUTE(CRA)
02/21/96 (S) CRA AT 1:30 PM BUTROVICH ROOM 205
02/21/96 (S) MINUTE(CRA)
03/18/96 2772 (S) CRA RPT CS 4DP 1NR NEW TITLE
03/18/96 2772 (S) FISCAL NOTE TO SSSB & CS (REV)
03/18/96 2772 (S) ZERO FISCAL NOTE TO SSSB & CSHB 394
(DCRA)
03/26/96 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/26/96 2898 (S) FIN RPT CS 4DP 3NR (NEW TITLE)
03/26/96 2898 (S) PREVIOUS FISCAL NOTE (REV)
03/26/96 2898 (S) PREVIOUS ZERO FISCAL NOTE (DCRA)
03/27/96 (S) RLS AT 12:00 PM FAHRENKAMP RM 203
04/01/96 2993 (S) RULES TO CALENDAR 4/1/96
04/01/96 2993 (S) READ THE SECOND TIME
04/01/96 2994 (S) FIN CS ADOPTED UNAN CONSENT
04/01/96 2994 (S) ADVANCED TO THIRD READING UNAN
CONSENT
04/01/96 2994 (S) READ THE THIRD TIME CSSSSB 20(FIN)
04/01/96 2994 (S) COSPONSOR(S): ZHAROFF, TAYLOR
04/01/96 2994 (S) PASSED Y20 N-
04/01/96 2994 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
04/01/96 2999 (S) TRANSMITTED TO (H)
04/02/96 3556 (H) READ THE FIRST TIME - REFERRAL(S)
04/02/96 3557 (H) CRA, FINANCE
04/11/96 (H) CRA AT 1:00 PM CAPITOL 124
WITNESS REGISTER
DEB DAVIDSON, Legislative Aide to
Senator John Torgerson
Alaska State Legislature
State Capitol Building, Room 427
Juneau, Alaska 99801
Telephone: (907) 465-2828
POSITION STATEMENT: Presented sponsor statement for SB 20.
LAMAR COTTEN, Deputy Commissioner
Department of Community and Regional Affairs
P.O. Box 112100
Juneau, Alaska 99811-2100
Telephone: (907) 465-4700
POSITION STATEMENT: Provided department's position and answered
questions regarding SB 20.
BILL ROLFZEN
State Revenue Sharing
Division of Municipal and Regional Assistance
Department of Community and Regional Affairs
P.O. Box 112100
Juneau, Alaska 99811-2100
Telephone: (907) 465-4750
POSITION STATEMENT: Provided department's position and answered
questions regarding SB 20.
KEVIN RITCHIE
Alaska Municipal League
217 Second Street
Juneau, Alaska 99801
Telephone: (907) 586-1325
POSITION STATEMENT: Testified in support of SB 20.
DENNIS EGAN, Mayor
City and Borough of Juneau
155 South Seward Street
Juneau, Alaska 99801
Telephone: (907) 586-5240
POSITION STATEMENT: Testified in support of SB 20.
TOM SMITH, Manager/City Clerk
City of Palmer
231 West Evergreen Avenue
Palmer, Alaska 99645
Telephone: (907) 745-3271
POSITION STATEMENT: Testified in support of SB 20.
JOE MURDY, Assembly Member
Municipality of Anchorage and
President, Alaska Municipal League
P.O. Box 196650
Anchorage, Alaska 99519-6650
Telephone: (907) 343-4431
POSITION STATEMENT: Testified in support of SB 20.
TIM ROGERS, Legislative Program Coordinator
Municipality of Anchorage
P.O. Box 196650
Anchorage, Alaska 99519-6650
Telephone: (907) 343-4431
POSITION STATEMENT: Testified on behalf of mayor in support of
SB20.
ACTION NARRATIVE
TAPE 96-19, SIDE A
Number 0001
CO-CHAIR ALAN AUSTERMAN called the House Community and Regional
Affairs Committee meeting to order at 1:04 p.m. Members present at
the call to order were Representatives Austerman, Ivan, Vezey and
Elton. Representatives Mackie and Kott arrived at 1:07 p.m.;
Representative Nicholia arrived at 1:14 p.m.
SB 20 - STATE AID TO MUNIS & UNORGANIZED BOROUGH
CO-CHAIR AUSTERMAN brought SB 20 before the committee and invited
Deb Davidson to present the bill.
Number 0057
DEB DAVIDSON, Legislative Aide to Senator John Torgerson, sponsor
of SB 20, introduced the bill. She explained that SB 20 changed
the name of the Municipal Assistance Fund to the Safe Communities
Fund. It required municipalities that levied taxes to list money
received from the Revenue Sharing for Safe Communities Fund on the
"Notice to Taxpayers". It also removed the hold-harmless provision
from the base amount account and allowed that amount to be
proportionately reduced in the event of future reductions. The
minimum entitlement for a community was raised to $40,000.
Additionally, the date of payment under the program was changed to
July 31, the same date as payment of revenue sharing funds. Thus,
communities would receive one payment from both programs, which
would assist in their budgeting processes. Ms. Davidson noted that
the remainder of the bill was primarily housekeeping measures to
reflect the new name.
Number 0223
LAMAR COTTEN, Deputy Commissioner, Department of Community and
Regional Affairs (DCRA), testified that DCRA supported SB 20. The
department liked the elimination of the hold-harmless clause, which
meant that for any future cuts to municipal assistance, all
communities would receive the same cut.
MR. COTTEN voiced DCRA's support for the $40,000 minimum payment,
a combination of revenue sharing and municipal assistance for the
smaller communities, citing two reasons. First, smaller
communities that would qualify for a $40,000 minimum combined
entitlement generally had a limited ability to tax locally.
Therefore, their general fund budgets contained a
disproportionately high percentage of funds from the state through
municipal assistance and revenue sharing. Second, it was a good
investment in the long term. Mr. Cotten referred to the forecast
for future weak fishing seasons and other reductions of government
transfer payments. He said smaller communities had a double
challenge meeting minimal service needs and were always faced with
having restricted property within their communities and other
limitations on raising taxes.
MR. COTTEN expressed the department's concern about moving the
payment date from February 1 to July 31. "It's the
Administration's position we'd rather see it closer to November or
October," he said. "It's roughly $130,000 each month you move it
towards the July 31st date." Other than that, he said, the
department liked the bill, which was a product of the communities,
the department, and the Alaska Municipal League.
Number 0380
CO-CHAIR AUSTERMAN asked if Mr. Cotten thought inclusion of the
February date might create a problem with passage of the bill.
MR. COTTEN replied he thought it would be a problem, although he
did not know how big of a problem. He restated the wish to see it
closer to October or November.
Number 0400
REPRESENTATIVE PETE KOTT asked what the rationale was for the
February 1 date in the original bill.
MR. COTTEN deferred to Bill Rolfzen for an answer.
Number 0450
BILL ROLFZEN, State Revenue Sharing, Division of Municipal and
Regional Assistance, Department of Community and Regional Affairs,
responded, "I believe the original municipal assistance payment
date was in June for state fiscal year municipalities. Calendar
year municipalities receive their payment on February 1. When
Title 29 was rewritten, I believe in 1986, they moved the payments
so all municipalities receive their payment on February 1."
Number 0520
KEVIN RITCHIE, Alaska Municipal League (AML), testified that while
the bill sounded simple, 140 municipalities had to agree on it. A
tremendous amount of work had gone into the bill, which was
carefully balanced. He stated strong support for the bill, saying
it was an important move as far as making do with fewer resources
on the parts of communities.
REPRESENTATIVE KIM ELTON asked Mr. Ritchie about moving the date to
October or November.
Number 0580
MR. RITCHIE replied, "When I talked about the balancing part, ...
considerable additional funds are being moved towards smaller
communities. That's about, I believe, $238,000 dollars that larger
communities are providing to smaller communities. There [are] 41
smaller communities right now that do not receive $41,000. It's
very hard, obviously, for any community to say, `yeah, we have a
wonderful new bill and it's going to provide us less resources'.
The balancing is created by moving the payment date back to the
July period."
REPRESENTATIVE ELTON said, "So, that would be $130,000 a month,
then. So, if it moved from July 31 to October 31, that would be a
loss of $260,000 (indisc.)."
MR. RITCHIE concurred. He explained that resources were allocated
to communities two ways: 1) through the $40,000 minimum or 2) by
getting rid of the hold-harmless provision.
Number 0679
DENNIS EGAN, Mayor, City and Borough of Juneau (CBJ), stated he was
also a board member for the Alaska Municipal League (AML), the
subcommittee chairman for the AML legislative committee, a member
of the Alaska Conference of Mayors, and, because of his position as
mayor, a CBJ assembly member. "All those groups that I just named
are in unanimous support of Senate Bill 20," he said.
MAYOR EGAN thanked Senator Torgerson, a former assembly member from
the Kenai area and former president of AML, for recognizing the
seriousness of the problem faced by local municipalities,
especially the smaller ones. "One of the most important facets of
Senate Bill 20 is that small communities get their minimum
entitlement up to $40,000," Mayor Egan said. "As you know, many
communities in the state of Alaska are dissolving. What that will
do to the state of Alaska is create another level of bureaucracy
because somebody is going to have to take care of the ... smaller
bush communities, especially, throughout the state of Alaska. And,
in fact, more money is going to be expended providing services to
those communities when they dissolve."
MAYOR EGAN stated SB 20 would end serious cuts to municipal
assistance and state shared revenue that communities had
experienced since 1986, by combining those programs into the Safe
Communities program. He noted that SB 20 was bipartisan and said
it improved equity, especially for the future. He had been
involved with the AML since 1989. "We're usually divisive," he
said. "It's not that way on Senate Bill 20. And some of the major
communities and medium-sized communities in the state of Alaska are
taking a hit because of the upping of the minimum entitlement to
$40,000. We don't have any problem with that, because I think
everybody in the state of Alaska is out for the best of the
communities in the state of Alaska and we would appreciate your
support of Senate Bill 20."
Number 0879
TOM SMITH, Manager/City Clerk, City of Palmer, testified via
teleconference that the City of Palmer, a member of the AML,
endorsed SB 20, a performance-based program that would reward
communities that provided basic services to their citizens.
Number 0979
JOE MURDY, Assembly Member, Municipality of Anchorage, and
President, Alaska Municipal League, testified via teleconference in
support of SB 20. He stated it was a fair bill for all communities
involved. He believed the early funding date was key to the
legislation.
Number 1036
TIM ROGERS, Legislative Program Coordinator, Municipality of
Anchorage, testified via teleconference on behalf of Mayor Rick
Mystrom. "As president of the Alaska Conference of Mayors, Mayor
Mystrom urges your support of this important legislation," Mr.
Rogers said. "It accomplishes several things for us. It clearly
defines services supported by the program. It ties funding more
directly to priority public services and provides more flexibility
to municipalities while increasing the minimum entitlement to
smaller communities without increasing the total allocation of the
program." Mr. Rogers noted the unified support by municipalities,
a result of the AML and Conference of Mayors working on the bill
with Senator Torgerson for at least a year and a half.
CO-CHAIR AUSTERMAN asked if there was further testimony and closed
the public hearing. He expressed support for the bill and
acknowledged the Administration's concern about the payment date.
He suggested that although the state might lose some money in
interest, if the communities were half-way responsible, they would
"pick it up on the other end, with the communities getting some
interest out of it."
Number 1145
REPRESENTATIVE KOTT expressed support for the general concept.
However, he said, "I think it ought to be made clear for the record
that by adjusting the date to correspond with the fiscal year, we
are drawing from the general fund and allowing the communities to
draw from that money the interest that generally would be
accumulated in the state's general fund. So, it will mean fewer
general fund dollars available." He noted the Governor had an
8percent reduction in his budget that this would certainly
mitigate. "But I fear that at some point in the future, we may
have to revisit the issue as we start again to address the idea of
decentralizing, down to the local communities, responsibility for
government," he concluded, suggesting that might result in cuts to
the program in general.
Number 1209
REPRESENTATIVE JERRY MACKIE moved that CSSSSB 20(FIN) move from
committee with individual recommendations and accompanying fiscal
notes. There being no objection, it was so ordered.
ADJOURNMENT
There being no further business to conduct, CO-CHAIR AUSTERMAN
adjourned the House Community and Regional Affairs Committee at
1:23 p.m.
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