Legislature(1995 - 1996)
04/25/1996 08:07 AM House STA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 25, 1996
8:07 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Scott Ogan, Vice Chair
Representative Joe Green
Representative Ivan Ivan
Representative Brian Porter
Representative Caren Robinson
Representative Ed Willis
MEMBERS ABSENT
All members were present.
COMMITTEE CALENDAR
* HOUSE JOINT RESOLUTION NO. 66
Relating to opposing the American Heritage Areas Program.
- PASSED OUT OF COMMITTEE
CS FOR SENATE BILL NO. 280(FIN) am
"An Act relating to municipalities; the incorporation of certain
boroughs in the unorganized borough; the formation of separate
unorganized boroughs; and to taxation in the unorganized boroughs."
- HEARD AND HELD
HOUSE BILL NO. 136
"An Act mandating the sale of the Alaska Railroad; and providing
for an effective date."
- SCHEDULED BUT NOT HEARD
(* First public hearing)
PREVIOUS ACTION
BILL: HJR 66
SHORT TITLE: OPPOSE AMERICAN HERITAGE AREAS
SPONSOR(S): RULES
JRN-DATE JRN-DATE ACTION
04/19/96 3880 (H) READ THE FIRST TIME - REFERRAL(S)
04/19/96 3880 (H) STATE AFFAIRS
04/25/96 (H) STA AT 8:00 AM CAPITOL 102
BILL: SB 280
SHORT TITLE: MANDATORY INCORP OF CERTAIN BOROUGHS
SPONSOR(S): SENATOR(S) TORGERSON, Green, R. Phillips, Donley,
Halford
JRN-DATE JRN-DATE ACTION
02/09/96 2352 (S) READ THE FIRST TIME - REFERRAL(S)
02/09/96 2353 (S) CRA, STA
02/28/96 (S) CRA AT 1:30 PM BUTROVICH ROOM 205
02/28/96 (S) MINUTE(CRA)
02/28/96 2578 (S) COSPONSOR(S): DONLEY
03/13/96 (S) CRA AT 1:30 PM BUTROVICH ROOM 205
03/13/96 (S) MINUTE(CRA)
03/14/96 2736 (S) CRA RPT CS 3DP 1DNP SAME TITLE
03/14/96 2737 (S) FISCAL NOTES TO SB & CS (GOV, DCRA-3,
03/14/96 2737 (S) DOE, LAW, DNR)
03/14/96 2737 (S) ZERO FNS TO SB & CS (ADM, DPS, DOT)
03/14/96 2737 (S) FIN REFERRAL ADDED
03/14/96 2746 (S) COSPONSOR: HALFORD
03/27/96 2928 (S) STA REFERRAL WAIVED Y12 N8
04/03/96 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/04/96 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/09/96 3099 (S) FIN RPT CS 5DP 1DNP NEW TITLE
04/09/96 3099 (S) PREVIOUS FNS(GOV, DCRA-3, DOE, LAW,
DNR)
04/09/96 3100 (S) PREVIOUS ZERO FNS (ADM, DPS, DOT)
04/10/96 (S) RLS AT 10:50 AM FAHRENKAMP RM 203
04/11/96 3155 (S) RULES TO CALENDAR 4/11/96
04/11/96 3163 (S) READ THE SECOND TIME
04/11/96 3164 (S) FIN CS ADOPTED UNAN CONSENT
04/11/96 3164 (S) AM NO 1 ADOPTED Y14 N6
04/11/96 3165 (S) AM NO 2 WITHDRAWN
04/11/96 3165 (S) AM NO 3 FAILED Y6 N14
04/11/96 3166 (S) ADVANCE TO THIRD READING FLD Y12 N8
04/11/96 3166 (S) THIRD READING 4/12 CALENDAR
04/12/96 3202 (S) READ THE THIRD TIME CSSB 280(FIN) AM
04/12/96 3203 (S) RETURN TO SECOND FOR AM 2
UNAN CONSENT
04/12/96 3203 (S) AM NO 2 ADOPTED UNAN CONSENT
04/12/96 3203 (S) AUTOMATICALLY IN THIRD READING
04/12/96 3203 (S) PASSED Y13 N6 E1
04/12/96 3203 (S) TAYLOR NOTICE OF RECONSIDERATION
04/15/96 3246 (S) RECON TAKEN UP - IN THIRD READING
04/15/96 3247 (S) PASSED ON RECONSIDERATION Y13 N7
04/15/96 3251 (S) TRANSMITTED TO (H)
04/16/96 3794 (H) READ THE FIRST TIME - REFERRAL(S)
04/16/96 3794 (H) STATE AFFAIRS, FINANCE
04/23/96 (H) STA AT 8:00 AM CAPITOL 102
04/23/96 (H) MINUTE(STA)
04/25/96 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
MARIEKE NORDLINGER, Legislative Administrative
Assistant to Representative Gail Phillips
Alaska State Legislature
State Capitol Building, Room 208
Juneau, Alaska 99801
Telephone: (907) 465-2689
POSITION STATEMENT: Provided sponsor statement for HJR 66.
IRENE ANDERSON
Sitnasuak Native Corporation
P.O. Box 905
Nome, Alaska 99762
Telephone: (907) 443-2632
POSITION STATEMENT: Testified on HJR 66; opposed SB 280.
BRIDGET WRIGHT, Acting Vice Mayor
City of Coffman Cove
P.O. Box 18135
Coffman Cove, Alaska 99918
Telephone: (907) 329-2233
POSITION STATEMENT: Opposed SB 280.
MISSY BURROUGHS
General Delivery
Wiseman, Alaska 99790
Telephone: (907) 796-9001 (Community Phone)
POSITION STATEMENT: Opposed SB 280.
ALAN LEMASTER
P.O. Box 222
Gakona, Alaska 99586
Telephone: (907) 822-3664
POSITION STATEMENT: Opposed SB 280.
CHRISTOPHER COOK
P.O. Box 858
Slana, Alaska 99586
(NO TELEPHONE NUMBER AVAILABLE)
POSITION STATEMENT: Opposed SB 280.
GEORGE MIDVAG
P.O. Box 891
Slana, Alaska 99586
(NO TELEPHONE NUMBER AVAILABLE)
POSITION STATEMENT: Opposed SB 280.
JUNE REAKOFF
General Delivery
Wiseman, Alaska 99790
Telephone: (907) 796-9001 (Community Phone)
POSITION STATEMENT: Testified on SB 280.
TERRY HOEFFERLE
Bristol Bay Native Association
P.O. Box 310
Dillingham, Alaska 99576
Telephone: (907) 842-5257
POSITION STATEMENT: Testified on SB 280.
GARY MOORE, Director of Planning
Tanana Chiefs Conference
122 First Avenue
Fairbanks, Alaska 99701
Telephone: (907) 452-8251
POSITION STATEMENT: Testified on SB 280; opposed formation of
boroughs.
KEN ROBERSON
P.O. Box 375
Glennallen, Alaska 99588
Telephone: (907) 822-3363
POSITION STATEMENT: Opposed SB 280.
ALFRED LEE
HC 1, Box 2660
Glennallen, Alaska 99588
Telephone: (907) 822-3343
POSITION STATEMENT: Testified on SB 280.
ROY EWAN, President
Ahtna Incorporated
P.O. Box 649
Glennallen, Alaska 99588
Telephone: (907) 822-3476
POSITION STATEMENT: Opposed SB 280.
MATTHEW KRINKE
P.O. Box 545
Glennallen, Alaska 99588
Telephone: (907) 822-3343
POSITION STATEMENT: Opposed SB 280.
DAVE DENGEL, Assistant City Manager
City of Valdez
P.O. Box 307
Valdez, Alaska 99686
Telephone: (907) 835-4313
POSITION STATEMENT: Testified on SB 280.
JEFF SEWING
P.O. Box 76010
Tanacross, Alaska 99776
Telephone: (907) 883-5045
POSITION STATEMENT: Testified on SB 280.
WAYNE STOUT
P.O. Box 532
Tok, Alaska 99780
Telephone: (907) 883-4601
POSITION STATEMENT: Opposed SB 280.
ROGER JACOBSON
P.O. Box 813
Tok, Alaska 99780
Telephone: (907) 883-4260
POSITION STATEMENT: Testified on SB 280.
PATRICIA HUTCHINSON
P.O. Box 233
Tok, Alaska 99780
Telephone: (907) 883-5362
POSITION STATEMENT: Testified on SB 280.
RICHARD DENTZ
P.O. Box 771
Tok, Alaska 99780
(NO TELEPHONE NUMBER AVAILABLE)
POSITION STATEMENT: Testified on SB 280.
JANE BROWN
P.O. Box 92
Glennallen, Alaska 99588
Telephone: (907) 822-5520
POSITION STATEMENT: Opposed SB 280.
STEVE MAILLY
HC 1, Box 2536
Glennallen, Alaska 99588
Telephone: (907) 822-3703
POSITION STATEMENT: Opposed SB 280.
FREDERICK HEINZ
P.O. Box 125
Gakona, Alaska 99586
Telephone: (907) 822-3308
POSITION STATEMENT: Testified on SB 280.
PATRICK DALTON
P.O. Box 1413
Delta Junction, Alaska 99737
(NO TELEPHONE NUMBER AVAILABLE)
POSITION STATEMENT: Opposed SB 280.
PATRICK SCHLICHTING
HC 60, Box 3050
Delta Junction, Alaska 99737
Telephone: (907) 895-4896
POSITION STATEMENT: Opposed SB 280.
JACK REAKOFF
General Delivery
Wiseman, Alaska 99790
Telephone: (907) 796-9001 (Community Phone)
POSITION STATEMENT: Opposed SB 280.
JEANNE SPITLER
(NO ADDRESS AVAILABLE)
Northway, Alaska
Telephone: (907) 778-2235
POSITION STATEMENT: Opposed SB 280.
GLEN MARUNDE
P.O. Box 192
Tok, Alaska 99780
Telephone: (907) 883-4601
POSITION STATEMENT: Opposed SB 280.
JOHN KUNIK
P.O. Box 83
Glennallen, Alaska 99588
Telephone: (907) 822-5515
POSITION STATEMENT: Read testimony of Deborah Johnson in
opposition to SB 280.
MARK SPRINGER, Administrator
City of Hooper Bay
P.O. Box 29
Hooper Bay, Alaska 99604
Telephone: (907) 758-4311
POSITION STATEMENT: Opposed SB 280.
DEB DAVIDSON, Legislative Assistant to
Senator John Torgerson
Alaska State Legislature
State Capitol Building, Room 427
Juneau, Alaska 99801
Telephone: (907) 465-2828
POSITION STATEMENT: Provided sponsor's position on SB 280.
JOHN TORGERSON, Senator
Alaska State Legislature
State Capitol Building, Room 427
Juneau, Alaska 99801
Telephone: (907) 465-2828
POSITION STATEMENT: Sponsor of SB 280.
ACTION NARRATIVE
TAPE 96-59, SIDE A
Number 0001
CHAIR JEANNETTE JAMES called the House State Affairs Committee to
order at 8:07 a.m. and noted there was a quorum. Members present
at the call to order were Representatives James, Ivan, Porter,
Robinson and Willis. Representatives Ogan and Green joined the
meeting at 8:08 a.m. and 8:14 a.m., respectively.
CHAIR JAMES indicated HB 136 would be heard at a later date, as she
had received the committee substitute just that morning. She
informed the public they could obtain a copy from her or the LIO
offices and reminded listeners of the 24-hour notice in effect for
meetings.
HJR 66 - OPPOSE AMERICAN HERITAGE AREAS
Number 0081
CHAIR JAMES noted the first order of business was HJR 66, a
resolution presented by the House Rules Committee. She called upon
Marieke Nordlinger from the office of House Speaker Gail Phillips
to introduce the resolution.
Number 0129
MARIEKE NORDLINGER, Legislative Administrative Assistant to
Representative Gail Phillips, explained HJR 66 was drafted in
response to a bill, currently before the United States Congress,
that proposed creating a new arm of the U.S. Department of the
Interior to assist states in identifying and managing a new system
of public park lands. "The congressional bill was drafted with all
the best intentions and unfortunately has become a bill which is
unfriendly to the state of Alaska," Ms. Nordlinger said.
MS. NORDLINGER read from that bill the definition of eligible
lands: "The term National Heritage Area means a place designated
by the Congress where natural, cultural and historic resources
combine to form a cohesive, nationally distinctive landscape
arising from patterns of human activity shaped by geography." She
suggested every acre in Alaska could be defined as eligible under
the program. "While there is merit in the conservation of heritage
areas, the impetus for the set-aside of these lands should come
from the level of government closest to the people and should
provide for ... private property rights," she stated. "And in the
absence of those two provisions, the resolution before you opposes
the bill, as it's currently drafted."
Number 0370
IRENE ANDERSON, Sitnasuak Native Corporation, testified via
teleconference from Nome, saying they opposed the American heritage
program. "And we do not want clouded title over our ANCSA land,
and that's one thing these heritage programs could do, is by
getting the idea out in the Lower 48, and then those people out
there can try to plan our land use," she stated. She believed
opposing the program would help protect property rights.
CHAIR JAMES asked if there were others wishing to testify and
concluded the teleconference.
Number 0520
REPRESENTATIVE BRIAN PORTER made a motion that HJR 66 move from the
House State Affairs committee with individual recommendations.
There being no objection, HJR 66 moved from committee.
SB 280 - MANDATORY INCORP OF CERTAIN BOROUGHS
Number 0565
CHAIR JAMES brought SB 280 before the committee and noted the
teleconference was continuing from the previous meeting. She
invited Senator Torgerson, sponsor of SB 280, to join the committee
at the table.
Number 0620
BRIDGET WRIGHT, Acting Vice Mayor, City of Coffman Cove, testified
via teleconference in opposition to SB 280. She said 80 percent of
Coffman Cove landowners had no children and were against the bill,
which seemed one-sided.
Number 1114
MISSY BURROUGHS testified via teleconference, saying she was
chairman of the village council in Wiseman. She believed the bill
was unfair and that forming boroughs would ultimately cost the
state more money. "Many of the businesses in the northern region
generally lease them from the state," she said. "So, they're going
to escape these ... property taxes. The burden will fall on people
who do own their land, and many of ... local people who do own land
generally don't necessarily run businesses."
Number 0870
MS. BURROUGHS indicated her school district was the size of
Washington state. She said Representative Terry Martin had
suggested combining school districts to "squeeze out some of the
administration" for savings. She indicated that was entirely up to
local school boards, which could reduce costs by trimming fat.
She suggested areas such as Ketchikan and Sitka formed boroughs
because it brought in more state revenue. She said the state
chipped in, anyway, whether to a borough or rural area.
MS. BURROUGHS stated she would almost rather pay property tax than
wind up in a borough. She emphasized that forming boroughs would
cost money through creating bureaucracy. Unless a borough could
tax pump stations or tourists, for example, it was unfair for rural
landowners with seasonal jobs to pay property tax, she said.
Number 1081
CHAIR JAMES asked if Ms. Burroughs was aware that although the
state gave money to all schools in the state, people in boroughs
paid an education tax not paid by those outside of boroughs. She
asked if Ms. Burroughs would be willing to pay a tax, not
necessarily on property, to cover the same fair share of education
expenses that the organized areas paid.
Number 1114
MS. BURROUGHS restated that she would almost rather pay a property
tax than to try to have a borough.
CHAIR JAMES asked if it was accurate to say Ms. Burroughs opposed
formation of a borough, rather than opposing taxes to apply to her
area's portion of the cost of schools.
MS. BURROUGHS thought the state portion would probably cover the
cost of education in a borough. However, property tax supported
additional administrative demands in a borough. She believed once
a borough formed, the cost of education would rise, whereas rural
areas ran education on just the state portion. She also believed
that if taxes were levied for education, the amounts would be
excessive and would be squandered. She thought costs could be
trimmed.
Number 1261
ALAN LEMASTER testified via teleconference from Gakona, saying he
opposed a property tax to support the school system and thought he
would oppose an income tax for that purpose. However, he would
support a school tax assessed against every citizen of the
unorganized borough. He said a great number of people in the
unorganized borough neither worked on a steady basis nor owned
land. Therefore, the entire burden was placed on a relatively
small portion of the population.
Number 1389
CHRISTOPHER COOK testified via teleconference from Slana, saying he
found SB 280 onerous. Most people in his region, the northeast
Copper River Basin, lived a subsistence lifestyle, supplemented by
seasonal work in developed areas. Services were unavailable. Many
residents lived some distance from the road. Mr. Cook referred to
SB 280 as "Pandora's box." He suggested dispensing with property
tax-based funding of districts and, instead, implementing a
statewide income, school or sales tax to make up for oil revenue
shortfalls, decided by a vote of the people.
MR. COOK offered to fax to the committee an article written by
Juneau-based economist David Reaume, who contended the state had no
funding shortage for services.
CHAIR JAMES informed Mr. Cook the committee had the article.
Number 1548
REPRESENTATIVE SCOTT OGAN quoted his father as saying, "If it
sounds too good to be true, it usually is."
GEORGE MIDVAG testified via teleconference from Slana, saying he
was a guide and business owner. He opposed SB 280. "If it isn't
Washington telling us how to run our game and run our lives, then
it's somebody from the big city," he said. "They always seem to
look to us." He suggested cutting back, not increasing spending.
Number 1625
CHAIR JAMES noted the committee had been hearing that people were
not interested in creating a borough but were willing to pay a tax
to help support their schools. She asked Mr. Cook and Mr. Midvag
if they were willing to do that.
MR. MIDVAG said he would pay a tax that would apply equally to
everyone, rather than having a few people pay property taxes. He
suggested a statewide income tax or sales tax might be the most
fair way to raise money. "But still, cut back," he added.
CHAIR JAMES mentioned that residents of larger areas currently paid
tax to support schools. She herself paid almost $1,000 of property
tax that went directly to Fairbanks schools, whereas people in the
unorganized boroughs paid nothing. "So, what we're trying to do is
establish a plan that would make it fair so that everyone that does
have schools and education in their area pays something for that,
as well as getting money from the state," she explained.
Number 1735
MR. COOK suggested it would compound the problem to implement
statewide the taxation formula currently used by boroughs. He
believed property tax should be removed from the equation.
Number 1816
IRENE ANDERSON, Sitnasuak Native Corporation, testified via
teleconference from Nome, saying the corporation had corresponded
with the committee the previous week in opposition to SB 280.
CHAIR JAMES acknowledged that the committee had that letter.
MS. ANDERSON noted that people in Nome already paid tax for their
schools. In addition, there were fund-raisers to help with the
band, swim team, or other activities. "In a lot of places, we
might not see taxation, but we see that the community supports the
school," she said.
MS. ANDERSON referred to page 4, line 9, which said "Money from
taxes levied under this section may be appropriated", and pointed
out it did not specify the money would go towards schools. She
agreed that everyone should pay the same amount for schools. She
also suggested consideration of a ten dollar school tax, such as
the one that used to be levied.
Number 1915
JUNE REAKOFF testified via teleconference from Wiseman, saying she
was a long-time resident of the area. She did not want a borough,
which was another layer of government that would not meet people's
education needs. She believed there was already excessive
government and too much administration in the school system. Ms.
Reakoff said many people in the area were very poor. If the
borough were incorporated, it would be a hardship on residents.
She said the people hired their own tutors and had to make their
own community building because there was so much spent on
administrative costs that no money trickled down. "We feel
deprived and we think that a borough government would deprive us
even more," she concluded.
Number 2023
REPRESENTATIVE OGAN suggested if people were not interested in
paying for schools, they were not losing anything. If the school
district was top-heavy and people were paying taxes to support
those schools, they would show up at meetings and demand changes,
like they did in his own borough.
Number 2064
TERRY HOEFFERLE, Bristol Bay Native Association, testified via
teleconference from Dillingham, saying he would address tax
equalization. He questioned the numbers distributed with regard to
the existing tax base in the unorganized borough and said, "I think
that I can unequivocally say that those areas that have a tax base
have formed a borough, and primarily for the purpose of providing
a better education for their kids. Areas of the state that remain
in the unorganized borough are not populated by a bunch of
shirkers, as some would have us believe, but they're populated by
a bunch of concerned parents and other people that simply have no
tax base and have not formed a borough because they haven't been
able to afford to do it."
Number 2136
MR. HOEFFERLE commented on huge differences in costs and services
in Alaska. This made it hard to apply taxation legislation, he
said. In the unorganized borough, there was no tax base. "I think
that the nature of property and the costs in Alaska make any
attempts to draw an equalized value meaningless," he stated,
suggesting that some rural houses, for example, valuable as a place
to live, would be practically worthless in an urban setting. He
believed there was an inflated valuation of comparable properties
in rural Alaska. Furthermore, the high cost of tax collection
might outweigh the value of a tax. Mr. Hoefferle thought the
implication that rural people paid nothing for their children's
education was nonsense. In Dillingham, Kids Count, for example,
raised all the money to send children to spelling bees and sports
events, he said, with none of it coming from the school budget.
Number 2320
GARY MOORE, Director of Planning, Tanana Chiefs Conference,
testified via teleconference from Fairbanks. Tanana Chiefs
Conference generally opposed formation of boroughs statewide and
believed it was being pushed down people's throats. Mr. Moore
advocated more public participation and indicated there were other
sources of funding. The conference offered to participate in
finding solutions but believed that insufficient income existed in
rural areas to provide for education in the manner the state was
considering, he said.
Number 2392
KEN ROBERSON testified via teleconference from Glennallen, saying
he opposed SB 280. He referred to SB 35 (1976), which created 19
REAAs that were to be culturally and geographically similar. "Tok
and Delta at that time were combined for convenience, due to DCRA,
as were Copper River and Chugach," he stated. "Some of us went to
Juneau and petitioned to split those districts, which are, in one
case here, proposed to combine again...." He said SB 280 violated
the intent of that 1976 legislation.
MR. ROBERSON believed a school tax that would include itinerant
workers and non-property-holders would raise significant money. "I
heard a complaint from the sponsor the other day that that would
put a burden on the organized areas," he said. "All they have to
do is reduce their mill rate accordingly, and then it will be
balanced thoroughly across the state, if they choose to do so. The
organized areas maintain, however, that they have swimming pools,
tracks, football fields and programs that are funded by that mill
rate, which the unorganized areas don't have programs that even
begin to approach that level."
MR. ROBERSON maintained that even schools within Anchorage were
unequal and added, "To say that the unorganized areas and the
organized areas are the only imbalance is totally inappropriate."
Mr. Roberson concluded by stating agreement with most of the
previous testimony and saying he favored a school tax.
TAPE 96-59, SIDE B
Number 0004
ALFRED LEE testified via teleconference from Glennallen,
congratulating the committee for their work and saying "we stand
ready, willing and able to pay our fair share." He said people
living in the area could forfeit their permanent fund dividends to
the state or the school. He suggested a gasoline tax could also be
used. Troopers could be self-supporting through user fees, as
well.
Number 0068
ROY EWAN, President, Ahtna Incorporated, a Native regional
corporation, testified via teleconference from Glennallen. Having
traveled extensively throughout the state, he believed he
understood the needs and concerns of rural Alaska. He opposed SB
280 and did not believe there was a tax base in the Copper River
Basin, which had no economic development. Nor did he not believe
the borough's funding should be based on taxing the pipeline,
because those revenues were declining.
MR. EWAN said the state should consider building the infrastructure
of rural Alaska, including roads and cheaper power, to stimulate
economic development. He favored a school tax and strongly opposed
SB 280.
Number 0103
MATTHEW KRINKE testified via teleconference from Glennallen,
stating he was a Republican opposed to SB 280, which was against
the party platform. He said most people in his area could not pay
those taxes. He asked organizations to contact the Copper River
Residents Against the Borough (CRAB) at 822-5515 (telephone) or
822-5520 (fax).
Number 0184
DAVE DENGEL, Assistant City Manager, City of Valdez, testified via
teleconference that Valdez was a home rule city in the unorganized
borough. As such, they served as their own school district, he
said. In 1995, Valdez taxpayers paid $4.5 million to support
education, or about 5.2 mills. Mr. Dengel referred to Section 6
and said it looked like Valdez, and other first-class or home rule
cities in the unorganized borough, would be required to pay an
additional 6-mill tax. Furthermore, money collected may be
appropriated to the regional educational attendance areas, of which
Valdez was not a part. It therefore appeared that Valdez and
similarly situated municipalities would be paying twice for
education, he said.
MR. DENGEL indicated at the previous Tuesday's meeting, the sponsor
mentioned a provision to exempt home rule and first-class cities.
Mr. Dengel could not find that in the bill. He noted that the
Prince William Sound area had $1.2 billion in assessed valuation.
"If you just pull out Valdez and Cordova, it leaves about $34
million of assessed valuation ... for Prince William Sound," he
said. At six mills, roughly $200,000 would be generated, he said.
He suggested an amendment to exempt home rule and first-class
municipalities that already contributed to education.
CHAIR JAMES noted that a representative of the sponsor would be
available to address concerns after testimony was taken.
Number 0291
JEFF SEWING testified via teleconference, saying SB 280 was poorly
written and targeted private property owners and businesses.
"Because the bill encourages a property tax levy but has as its
goal to collect money for education, I also see this as an end-run
to circumvent the issue of education, so that private property can
be targeted in the future for whatever reason government, be it
local or state, should decide to tax," he stated. "Otherwise, a
bill that specifically addressed education would have been written
whereby all peoples would share the burden for a specifically
identified purpose. And this certainly is not the case."
MR. SEWING concurred with earlier testimony. He suggested newly
formed boroughs would be potential targets for penalty taxation by
agencies such as the Environmental Protection Agency. He said more
money did not correlate with better education. A registered
Republican, Mr. Sewing concluded by expressing disappointment that
SB 280 came from a Republican senator, as he thought Republicans in
the '90s represented less government intrusion and taxes.
Number 0427
WAYNE STOUT testified via teleconference from Tok, saying he was
against SB 280 "because of its poor judgment." He said the state
and federal government had disposed of land cheaply to get people
to move into the low-economy areas of the unorganized borough,
where economic conditions were very different from other parts of
the state. His area could not support a doctor at the clinic and
had no year-round jobs except for with the government, schools, the
post office, and some services.
Number 0539
ROGER JACOBSON testified via teleconference from Tok. He found it
hard to believe a Republican created SB 280 and said the sponsor
had made a name for himself, which was "mud". He emphasized that
people in the unorganized borough were not looking for a free ride.
He referred to Article IX, Section 4, of the Alaska Constitution
and suggested looking at the list of properties exempted from
taxation. Mr. Jacobson asked if this was equality. He proposed
exempting primary dwellings of all Alaskans from taxation. He
believed sales tax and income tax could replace property tax more
equitably.
Number 0661
PATRICIA HUTCHINSON testified via teleconference from Tok, saying
the bill had several flaws. According to the constitution, SB280
violated Article I, Section 1, because it did not treat citizens in
boroughs and unorganized boroughs equally, she said. She referred
to Article II, Section 13, and asked if it was a tax bill or a
borough bill. She referred to Article II, Section 19, and said
that was not complied with in two areas. First, a general tax
could accomplish the same end. And second, it did not provide for
approval by the voters.
MS. HUTCHINSON questioned the integrity of the author, saying the
bill did not comply with Article IX, Section 7. She said there
were boundaries established for the Upper Tanana Basin that did not
meet borough guidelines. "The Delta and Tok areas are dissimilar,
and this would be an undesirable union for both, economically and
culturally," Ms. Hutchinson stated. She questioned how
establishing 19 more bureaucracies could be an efficient use of tax
money. Referring to Article II, Section 21, she said it might
become expensive in the future.
Number 0771
RICHARD DENTZ testified via teleconference from Tok, saying SB 280
was trying to tax people before they had the ability to pay. He
suggested rejecting or shelving the legislation until economic
development provided a tax base.
Number 0849
JANE BROWN testified via teleconference from Glennallen that she
was a member of Copper River Residents Against Boroughs (CRAB),
whose 463 members opposed the bill. She referred to Article I,
Section 1, of the Alaska constitution and said in 1980, the
legislature repealed the state personal income tax, based on equal
protection. She questioned how that same article could be used to
impose a mandatory mill rate on a minority of rural Alaskans. She
referred to Article II, Section 13, and said SB 280 had been
amended to include four distinctly separate issues under the
umbrella of one bill, which she alleged violated the single-subject
rule.
MS. BROWN referred to Article IX, Section 1, and said the
legislature was within its constitutional boundaries to choose to
let the unorganized borough remain untaxed, as they frequently
granted tax exemptions and related inducements to locate within the
state. She referred to Article IX, Section 7, and said the
proceeds of any state tax or license were not to be dedicated to a
specific purpose, except as provided in Section 15, the Alaska
permanent fund. Therefore, she said, it was unconstitutional to
dedicate a state tax specifically to educational funding.
MS. BROWN referred to Article X, Section 3, and emphasized that the
state was to be organized into boroughs, organized or unorganized,
with "or" being the key word. She said Chair James appeared to be
the only voice of reason left in the Alaska Republican party. Ms.
Brown called SB 280 "the bureaucracy bill" and asked for a "no"
vote.
Number 1012
STEVE MAILLY testified via teleconference from Glennallen, saying
he had heard a lot of good testimony with which he was aligned. A
strong supporter of the Republican majority, he was nonetheless
strongly against SB 280, which he considered poorly thought-out.
He lived two miles from a public school and had seven children.
Theirs was a home schooling family. He said the majority of
delegates at the Republican caucus would oppose the bill. "Many of
them, like myself, were home schooling families," he added.
Number 1079
FREDERICK HEINZ testified via teleconference from Gakona, saying it
was not a money issue but a power issue that could result in lands
being taken away. He quoted his father, who said, "When
politicians get into politics, they get addicted to money."
Number 1162
PATRICK DALTON testified via teleconference from Delta Junction,
saying the real issue was the principle of where the money was
being appropriated to. He said the bill represented a misguided
philosophy where citizens gave up rights for the common good. He
did not want the bill and said, "If you can't live within your
budget, just cut your spending." He suggested finding out the will
of the people in the unorganized borough.
Number 1277
PATRICK SCHLICHTING testified via teleconference from Delta
Junction, saying he aligned himself with all the testimony against
SB 280. He did not think a property tax was fair for anyone,
either in organized or unorganized areas, the latter of which did
not have the wealth. Unorganized areas contributed greatly to
metropolitan areas, as everything was brokered through those larger
areas. "They have the spin-off," he said. "They have high-paying
jobs. And it feeds their economy and, thus, their school
system...." Mr. Schlichting pointed out that many people were
willing to contribute but likened paying property tax to paying
rent on one's own land. "The notion that the state of Alaska is
running out of money is contrived," he said, asking where else the
government paid people to be residents. He agreed an income tax or
sales tax would be more fair. He also said permanent fund
dividends could be used to fund state operations.
Number 1445
JACK REAKOFF testified via teleconference from Wiseman in
opposition to SB 280. He indicated rural Alaskans generally had
low incomes. He suggested the infrastructure of setting up a
borough government would far outweigh potential tax revenues. He
said residents had funded millions of dollars in service to the
non-resident work force in tourism and other industries, using oil
money. He felt the legislature should first address non-resident
revenues lost in wages.
Number 1516
JEANNE SPITLER testified via teleconference from Northway, saying
she opposed SB 280. She thought an income tax or sales tax would
be more fair. She asked what six mill equalled in dollars per
thousand.
CHAIR JAMES replied that six mill is .006 times the value.
Number 1634
GLEN MARUNDE testified via teleconference from Tok, saying he
opposed SB 280, which he believed was misguided. Having testified
the previous Tuesday, he now wanted to comment on the process. "A
legislator learns that the unorganized borough is not paying
property tax and wonders why," he said. "He assumes that this is
simply an unfair situation that has somehow slipped through the
cracks of the floor of our democracy and attempts to change the
laws and chink the crack."
MR. MARUNDE believed the constitution's framers were concerned
about the survival and well-being of the unorganized boroughs. He
referred to Article X, Section 6, and said it made the legislature
the watch dog and provider for the unorganized borough. "In the
second sentence, they put a chain around the neck of the watch dog
when they proclaimed the legislature may exercise any power or
function in an unorganized borough which the assembly may exercise
in an organized borough," Mr. Marunde stated. He contended that
the framers specifically spelled out how the legislature could
provide government services in the unorganized borough to prevent
them from moving the unorganized borough by legislative decree.
"Here we go again," he said. He asked that SB 280 be held in
committee for further study and comment.
Number 1955
JOHN KUNIK read a statement from Deborah Johnson, Mendeltna, whose
address is HC-1, Box 2566, Glennallen, Alaska 99588, telephone
(907) 822-3177. The statement, dated April 24, 1996, provided in
writing to the committee, indicated Ms. Johnson served on the board
of directors for the Nelchina/Mendeltna Community Corporation. Ms.
Johnson suggested an overwhelming majority of people in her area do
not support formation of a borough at this time. However, she
indicated many residents acknowledge that continued growth and
increased demands for resources would eventually dictate the need
to form a borough. She wrote, "I personally envision our children
someday CHOOSING to take that route." Ms. Johnson proposed that
the community be involved in finding solutions, indicating SB280
was an inappropriate one.
Number 2204
MARK SPRINGER, Administrator, City of Hooper Bay, testified via
teleconference in opposition to SB 280. Hooper Bay, with a
population of 1,000, was located within what would conceivably be
the Lower Yukon Borough, which contained little if any state land.
Surrounded by the Yukon Delta Wildlife Refuge, the predominant
private property was owned by Native corporations. One-half of the
residential land was federally restricted townsite land, not
subject to taxation. Therefore, at least 50 percent of the private
property in the community was nontaxable. Mr. Springer suggested
that was the case in many other rural communities, as well.
MR. SPRINGER did not believe the region currently had the technical
or professional capability of operating a property tax operation
with a regional government. He said the bigger municipalities were
beginning to evolve in a positive way, delivering a scope of
services in the communities. Hooper Bay, for example, charged a 2
percent sales tax. Mr. Springer indicated the seat of a borough
government would be isolated to many residents of the borough.
TAPE 96-60, SIDE A
Number 0016
MR. SPRINGER responded to Representative Ogan's suggestion that
people who paid property taxes would attend school board meetings.
Mr. Springer said in rural Alaska, school boards may meet monthly,
but at a different site each month. "Here in Hooper Bay, we see
our regional school board once a year," he explained. "If you want
to attend a school board meeting, or if you wanted to attend a
borough assembly meeting, you would have to catch an airplane or
charter an airplane."
MR. SPRINGER concluded by saying, "As far as resource development,
... when the legislature decides it's time to revamp the DNR
statutes and DNR regulations, and take away the statewide
unitization of petroleum exploration rights, and start breaking out
some smaller opportunities for resource development across Alaska,
that will be a show of good faith on the part of the legislature
that will be responded to by people in rural Alaska." He indicated
that as soon as rural Alaska could develop a tax base, communities
would respond to the idea of borough development.
Number 0166
REPRESENTATIVE OGAN addressed Mr. Springer's last point, saying,
"We are doing that with the shallow gas bill, House Bill 394. It's
exactly what it does, with resource development and breaking out
unitization, and allowing resource development of natural gas above
3,000 feet."
Number 0194
CHAIR JAMES incorporated the following into the record: a letter
from Kawerak, Inc. (Nome), dated April 17, 1996, in opposition to
SB 280; a handwritten message dated April 25, 1996, from Danny
Grangaard (Tok), who provided oral testimony the previous Tuesday;
handwritten memos, faxed April 23, 1996, from Ed Weathers and Denny
Kay Weathers (Cordova), both of whom testified the previous
Tuesday, opposing SB 280 and suggesting a flat school tax for
anyone employed in Alaska who is at least 18 years old; a
handwritten memo from Dagmar J. Davis (Cordova), faxed April 23,
1996, opposing SB 280 and suggesting reinstatement of a school tax
for all employed people in Alaska who are at least 18 years old;
and the letter from Deborah Johnson, dated April 24, 1996, and read
into the record by Mr. Kunik.
CHAIR JAMES concluded the teleconference and closed public
testimony. She called upon Deb Davidson from Senator Torgerson's
office to respond and make summary comments.
Number 0308
DEB DAVIDSON, Legislative Assistant to Senator John Torgerson,
sponsor of SB 280, stated, "I believe there are still
misconceptions about the legislation as it exists now, about the
fact that boroughs are required. The bill was changed to where
residents would have a vote. The concerns of the property tax are
understood, which was why the section was added to give a time
frame to allow the department to do some studies and propose
different methods to the legislature of generating that revenue, if
they needed to. And as to the economic bases of the areas, I
believe that that is better left up to people other than me to be
able to agree or disagree with. I think the senator outlined his
views on Tuesday, and I would just say that I believe the comments
he made then would probably apply today, as well."
CHAIR JAMES asked if there were comments or questions from the
committee.
Number 0411
REPRESENTATIVE ED WILLIS asked Chair James how she thought the
committee should proceed.
CHAIR JAMES indicated she had hoped to hear from the committee
before expressing her concerns. She agreed the thrust of the issue
was the great division between people who live in urban areas and
organized boroughs and those who do not. "We have been, over the
last few years, suffering that division much more intensely, over
the subsistence issue, over school funding issues, and also over
the tribal status issue," she said. "Those are all issues that are
not going to go away, and I am not willing to put any more darts
and any more wedges in that issue. I wish to have an agreement
with the rural people in our area to some sort of conclusion that
we can all buy into. It is reasonable to believe that those people
in the urban areas, especially when it comes to budget time and we
find that we pay more money for schools, with less participation in
the rural areas, that the urban people would be distressed. I'm
distressed about it. I think that what we heard in the testimony
is that those people are willing to pay something. I'm not sure
how much they can pay, or how is the best way for them to pay it."
CHAIR JAMES continued, "I don't believe that mandatory boroughs is
the way to go, and I think that as a Republican, which I am and
some of the rest of us around this table are, we are for less
government and this bill does more." She was not opposed to having
the large, unorganized borough remain in operation, with the
legislature sitting as a borough assembly and deciding that those
people must pay some tax toward education. However, she wanted to
work out an agreement with the sponsor to obtain a more palatable
bill, and she wished to hear the ideas of the committee.
Number 0593
REPRESENTATIVE IVAN IVAN said this was the heaviest legislation he
had ever come across. By perception, it was a divisive issue for
rural Alaska. He said a miscommunication exists between rural and
urban Alaska. Consensus-building and more input were needed.
Representative Ivan indicated many people in small villages did not
understand this legislation. Some 30 communities were affected,
a majority of them in the unorganized borough. Some communities,
near resources and with good economic opportunities such as fishing
or mining, could contribute. However, he said, "I represent some
villages that have nothing at all, that are just trying to live
their life. And right now, I represent one of the poorest areas."
REPRESENTATIVE IVAN suggested doing it by phases. For example,
during the interim, legislators could touch base with those who
would be affected. He noted that his area was looking at mining
opportunities, for example, which would provide a tax base. "We've
got to find a way that's equitable," he said. "So, I would push
for an interim committee, if necessary, to consider such a landmark
legislation that's affecting people that live in this great state
of ours."
Number 0880
REPRESENTATIVE WILLIS indicated agreement with Chair James's
approach. "I'm really torn with this legislation," he said, adding
that he lived through the mandatory borough acts 30-35 years
before, residing in an area considered rural at the time. "At that
particular time, the mandatory borough act of that day was really
resisted by people who lived outside of the organized areas, in our
case, the city of Anchorage," he said. "And the same testimony
that I've sat here the last two days, listening [to], coming in
from the rural areas, is the same testimony that we used to offer
to the legislature."
REPRESENTATIVE WILLIS said although he hated to see something
forced on people, now that he was living in an urban area where
taxes were paid for schools, his constituents felt the rural areas
should contribute. "But having said that, I'm not sure that this
is the precise bill to do it," he stated. "Maybe, for the first
time in our history, we should sit as a borough assembly of the
unorganized borough and discuss what I think is the bottom line of
the bill, ... the unorganized borough making some type of a
contribution towards schools, and leaving ... implementing the
borough government out of it at this time." He suggested working
out a solution palatable to everyone concerned.
Number 1132
CHAIR JAMES welcomed Senator Torgerson back to the meeting. She
expressed that the issue needed to be addressed and reiterated that
the divisiveness needed to be removed, so people were working
together for the same goal. "And we have not been doing a very
good job of that," she said, indicating the issue had been
festering in people's minds in urban areas. She thanked Senator
Torgerson, as had Representative Willis, for bringing the
legislation forward.
Number 1207
REPRESENTATIVE CAREN ROBINSON agreed with committee members who had
spoken, also expressing appreciation for Senator Torgerson's
efforts. However, she believed the bill warranted more work from
the affected groups. She suggested taking the issue to the rural
areas and working towards a consensus on a solution residents could
buy into. "I very much object to forcing something down people's
throats, because I don't think it will work," Representative
Robinson said. She suggested the bill be put into an interim
committee to obtain input from the Alaska Municipal League and
other groups.
CHAIR JAMES replied the committee could do that, setting time
lines. She indicated she had ideas to discuss with the sponsor, as
well, and said, "So, I'm not willing to say we're not going to pass
this bill. I'm not willing to say that we're going to pass this
bill like it is. I think it needs to have a lot of adjustment."
Number 1367
REPRESENTATIVE PORTER commented that although he represented mid-
town Anchorage, when he arrived 45 years before, most people he
knew in Anchorage felt precisely like the people who had testified.
"So, there is an understanding of the concerns of rural Alaska," he
said. However, Anchorage residents made a lot of contributions to
their services, paying for their own law enforcement; misdemeanor
prosecution, defense and corrections costs; and streets, for
example.
REPRESENTATIVE PORTER said, "There's in my mind, and in the mind of
a lot of my constituents, and I think we heard that from the
testimony today, and these rural Alaskans with British accents or
Georgia accents, this isn't the rural Alaskan that most other
Alaskans recognize have a right to indigenous lifestyles and
support. Many of these people live in rural Alaska by their own
individual election, but are benefitting from the court decisions
and other policies that have developed over the years when we had
a lot of money to throw at individual needs throughout the state.
I, too, would like to thank the senator for bringing a very
contentious issue to the table and would pledge to work with the
committee and the senator or anybody else to come up with a
resolution." Representative Porter concluded by pointing out that
while the title referred to mandatory boroughs, the provision was
optional.
Number 1548
CHAIR JAMES proposed an analogy that while urban Alaska had mass
production, rural areas had only basic production. She related a
personal experience with mass production. "Anything that we do as
a massive bunch of people to make things better for the whole,
whatever it is, there's going to be some that fall off of the
belt," she said. "We have to be sure, I think, in Alaska, that we
don't irresponsibly push people off of the belt." She believed
people ought to be willing to pay for education and noted that many
were home schooling their children, which still cost some amount of
money. She reiterated that something needed to be done but that it
should be constructive, not destructive.
Number 1638
REPRESENTATIVE OGAN suggested owners take better care of property
than renters do. He suggested the bill might be premature, in
light of the tenure bill relating to school districts. "The cost
of education keeps going up," he said. "The fiscal notes keep
going up." He said he did not mind paying for public education and
that his district was interested in this bill being passed. "I
guess the parts I'm wrestling with is the parts about less
government and no new taxes, the commitments I made to my
constituents that I would not incorporate new taxes," he stated.
Representative Ogan indicated his wish to keep working on the bill.
He said the bottom line was that people had something they did not
have to pay for, and they did not want to pay any more.
Number 1812
CHAIR JAMES responded to Representative Ogan's comment about
renters, saying, "It's my perspective, from being a renter and also
from being a landlord, that renters do pay property tax, and they
do pay for maintenance and all the other issues that it costs to
keep up a property, and it's factored into the rent. So, there is
that presumption that renters don't even pay property tax. But, in
fact, they do. So, when we're talking about a property tax, it
affects everyone, because when property taxes go up, the cost of
everything else goes up to pay for it."
Number 1847
SENATOR JOHN TORGERSON apologized for missing the earlier
discussion. He said, "We don't have to adjourn and stick another
label on us to say we're a borough assembly. As a legislature, we
have full force and effect on the unorganized borough, as an
assembly would do, and we do that constantly."
SENATOR TORGERSON explained the original bill title had `mandatory'
in it, which was long-since gone. "I agree with the people in
rural Alaska about having another layer of government," he said.
"That's why it's not in this bill. But I also believe, in the
local autonomy, that they should have an opportunity to vote on
it." He said the bill called for a time line of public hearings,
not all in one summer. He urged the committee to hold hearings in
all districts.
SENATOR TORGERSON emphasized that his intent was to equalize the
local effort for education. He noted that local municipalities
often were above a four-mill rate for education, with amounts added
above the cap for items such as sports. "There really is no
incentive, unless we put it in, for people to pay a tax," he
concluded.
Number 2032
CHAIR JAMES noted there had been no testimony supporting passage of
the bill and said people statewide had every opportunity to
participate. She offered Amendment 1, which read:
Page 4, line 9, following "borough""
Insert "that is outside of home rule and first class
cities"
Number 2065
REPRESENTATIVE PORTER moved Amendment 1.
REPRESENTATIVE JOE GREEN objected for the purpose of discussion.
SENATOR TORGERSON explained the amendment was offered to remove
confusion over double taxation in certain areas. He referred to
Nome, which he believed paid tax at the maximum rate possible.
"This bill is not intended to double tax anyone for education," he
said. "This bill is intended to capture the $3.1 billion that's
out there that is currently not being taxed from any jurisdiction."
He stated that all home rule and first-class cities in the
unorganized borough had, automatically, city school districts.
Number 2131
REPRESENTATIVE GREEN said his concern was whether, if home rule and
first-class cities were excluded from some boroughs, there would be
anything left. "And yes, I know there's the evaluation of the
amount of money there," he said. He noted there had been
indications that evaluation and collection would be a problem.
REPRESENTATIVE GREEN said, "It's awkward that this bill has only
been introduced two weeks ago. ... I think it would be a horrible
travesty to react too quickly to something that is as significant
as this. And so, I think this amendment, as well as the bill
itself, probably is to the point that, if we're going to pass it,
we should have some `hangy-ons' that says that it's advisory or
it's going to come back, or it's going to be reviewed in summer,
some process of going through this that isn't just to pass it and
then kind of let it languish. I think there should be a process
established."
Number 2204
REPRESENTATIVE GREEN noted that committee members had agreed to
work on it in the interim. Although he saw merit, he was unsure
what methods should be applied. He recalled that there had been
discussions in Anchorage for years about the inequality of using
property values to determine whether there should be police
protection. He stated, "My concern is that, if we put this in, are
we then, after the study, going to want to take it back out."
CHAIR JAMES agreed that was a valid concern.
Number 2272
SENATOR TORGERSON responded, "No matter what kind of study you did
on this bill, you would not come back with a recommendation to tax
people twice for education." He stated, "Contrary to what some of
the school districts have been saying, the single site, they do
have kids from outside their jurisdiction come into that school,
and it is a problem for them. Now, they get paid ... educational
unit value for that, which, again, is basic need. But the local
districts are footing the bill for people that are outside their
taxing jurisdictions."
CHAIR JAMES asked if there was further discussion on Amendment 1.
Number 2340
REPRESENTATIVE GREEN replied, "If we are intending to move this
bill out, I would maintain the objection because that presumes, I
think, then, that we are going to continue taxing the same way we
are now for future use of schools, whether they're in incorporated
boroughs or unincorporated boroughs. And if we are thinking that
we are going to review this over the interim, then I would remove
my objection because it will be reviewed then."
CHAIR JAMES pointed out that decision had not been made.
REPRESENTATIVE GREEN said he knew that.
CHAIR JAMES clarified that she was not saying whether she wanted to
move it or not. She wanted to speak with the sponsor about other
ideas.
Number 2381
REPRESENTATIVE GREEN said his position would depend on what
happened.
CHAIR JAMES suggested Representative Green was not ready to vote on
it.
REPRESENTATIVE IVAN informed Chair James that he also had proposed
amendments.
CHAIR JAMES acknowledged that and said Senator Torgerson had
another one, as well. "I passed this out earlier only because I
thought it was so innocuous that it might make some people out
there in teleconference land a little more happy to think that if
we do go forward with this, that this will be in there and they'll
feel more comfortable," she said. "That doesn't mean that we're
going to be passing the bill out in its current form or an amended
form. It doesn't mean that we're going to hold it. It just means
that we're telling those people out there that we're not going to
double tax them, which ... they're fearful of."
REPRESENTATIVE GREEN said, "On that basis, I'll remove the
objection."
Number 2420
CHAIR JAMES asked if there was any other objection. There being
none, Amendment 1 passed. Chair James concluded the hearing and
thanked all participants.
ADJOURNMENT
There being no further business to conduct, CHAIR JAMES adjourned
the House State Affairs Committee meeting at 10:27 a.m.
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