Legislature(2001 - 2002)
02/10/2001 01:36 PM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
WORK SESSION
February 10, 2001
1:36 p.m.
MEMBERS PRESENT
Senator John Torgerson, Chair
Senator Georgianna Lincoln
MEMBERS ABSENT
Senator Alan Austerman
Senator Randy Phillips
Senator Pete Kelly
COMMITTEE CALENDAR
SENATE BILL NO. 48
"An Act relating to the determination of full and true value of
taxable municipal property for purposes of calculating funding for
education and certain other programs; and relating to incorporation
of second class boroughs in the unorganized borough and to
annexation of portions of the unorganized borough to boroughs and
unified municipalities."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
See Community & Regional Affairs minutes dated 1/31/01 and 2/7/01.
WITNESS REGISTER
Senator Gary Wilken
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Sponsor of SB 48
Mr. Orrie Bell
Box 200
Petersburg, Alaska 99833
POSITION STATEMENT: Opposed to SB 48
Mr. Charles Abbott
HC 60, Box 4225
Delta Junction, Alaska 99737
POSITION STATEMENT: Opposed to SB 48
Mr. Art Griswold
HC 60, Box 4493
Delta Junction, Alaska 99737
POSITION STATEMENT: Opposed to SB 48
Mr. Patrick Schlichting
HC 60, Box 3050
Delta Junction, Alaska 99737
POSITION STATEMENT: Opposed to SB 48
Mr. Paul Knopp
Deltana Community Corporation
Box 794
Delta Junction, Alaska 99737
POSITION STATEMENT: Opposed to SB 48
Mr. Glenn Marunde
Box 192
Tok, Alaska 99780
POSITION STATEMENT: Opposed to SB 48
Ms. Mary Bonin
PO Box 30
Chitina, Alaska 99566
POSITION STATEMENT: Opposed to SB 48
Mr. Eric Nashlund
SR Box 271
Copper Center, Alaska 99573
POSITION STATEMENT: Opposed to SB 48
Mr. Roy Britton
HC 60, Box 330M
Copper Center, Alaska 99573
POSITION STATEMENT: Opposed to SB 48
Mr. John Wenger
HC 60, Box 280
Copper Center, Alaska 99573
POSITION STATEMENT: Opposed to SB 48
Mr. Robert Fithian
HC 60, Box 299C
Copper Center, Alaska 99573
POSITION STATEMENT: Opposed to SB 48
Mr. Robert Hurst
No address furnished
Kenny Lake Teleconference Site
POSITION STATEMENT: Opposed to SB 48
Ms. Carole Morrison
PO Box 21
Chitina, Alaska 99566
POSITION STATEMENT: Opposed to SB 48
Ms. Joy Ford
No address furnished
Chitina, Alaska 99566
POSITION STATEMENT: Opposed to SB 48
Mr. Daniel Boone
PO Box 53
Chitina, Alaska 99566
POSITION STATEMENT: Opposed to SB 48
Mr. Daniel Stevens
PO Box 85
Chitina, Alaska 99566
POSITION STATEMENT: Opposed to SB 48
Ms. Denny K. Weathers
PO Box 1791
Cordova, Alaska 99574
POSITION STATEMENT: Opposed to SB 48
Mr. Eric Weathers
PO Box 1791
Cordova, Alaska 99574
POSITION STATEMENT: Opposed to SB 48
Mr. Dean Curran
PO Box 42
Cordova, Alaska 99574
POSITION STATEMENT: Opposed to SB 48
Mr. Laife Weathers
PO Box 1791
Cordova, Alaska 99574
POSITION STATEMENT: Opposed to SB 48
Mr. Wayne Shafer
HC 02, Box 538
Gakona, Alaska 99586
POSITION STATEMENT: Opposed to SB 48
Mr. Albert Reyerse
SR Box 470
Gakona, Alaska 99586
POSITION STATEMENT: Opposed to SB 48
Ms. Michelle Apley
HC 02, Box 538
Gakona, Alaska 99586
POSITION STATEMENT: Opposed to SB 48
Mr. Kirk Ellis
HC 63, Box 1415
Gakona, Alaska 99586
POSITION STATEMENT: Opposed to SB 48
Mr. Thor Holmboe
HC Box 510
Gakona, Alaska 99586
POSITION STATEMENT: Opposed to SB 48
Mr. Jay Capps
HC Box 440
Gakona, Alaska 99586
POSITION STATEMENT: Opposed to SB 48
Mr. Bill Seeger
HC 1, Box 440
Gakona, Alaska 99586
POSITION STATEMENT: Opposed to SB 48
Ms. Jane Brown
PO Box 92
Glennallen, Alaska 99588
POSITION STATEMENT: Opposed to SB 48
Mr. Matthew Krinke
PO Box 545
Glennallen, Alaska 99588
POSITION STATEMENT: Opposed to SB 48
Mr. John Kunik
PO Box 92
Glennallen, Alaska 99588
POSITION STATEMENT: Opposed to SB 48
Mr. Harry Termin
HC 60, Box 115E
Copper Center, Alaska 99573
POSITION STATEMENT: Opposed to SB 48
Ms. Gloria Stickwan
Tazlina Village Council
PO Box 264
Copper Center, Alaska 99573
POSITION STATEMENT: Opposed to SB 48
Mr. Russ Bowdre
Box 1048
Delta Junction, Alaska 99737
POSITION STATEMENT: Opposed to SB 48
Mr. Andrew Leonard
HC 60, Box 229
Copper Center, Alaska 99573
POSITION STATEMENT: Opposed to SB 48
Mr. Tom Lambert
SR Box 220
Copper Center, Alaska 99573
POSITION STATEMENT: Opposed to SB 48
Mr. Scott Rees
PO Box 100
Copper Center, Alaska 99573
POSITION STATEMENT: Opposed to SB 48
Mr. Sam Lightwood
HC 60, Box 229
Copper Center, Alaska 99573
POSITION STATEMENT: Opposed to SB 48
Ms. Diane Ellsworth
PO Box 14
Chitina, Alaska 99566
POSITION STATEMENT: Opposed to SB 48
Mr. Steve Ginnis, President
Tanana Chiefs Conference
122 First Avenue
Fairbanks, Alaska 99701
POSITION STATEMENT: Opposed to SB 48
Mr. Pat W. Sweetsir
Tanana Chiefs Conference
122 First Avenue
Fairbanks, Alaska 99701
POSITION STATEMENT: Opposed to SB 48
Mr. Phillip Skilbred
Two Rivers School Committee
309 Little Chena Drive
Two Rivers, Alaska 99716
POSITION STATEMENT: Opposed to SB 48
Mr. Burt Ward
HC-01, Box 1980
Glennallen, Alaska 99588
POSITION STATEMENT: Opposed to SB 48
Mr. Wayne MacMurray
Box 952
Slana, Alaska 99586
POSITION STATEMENT: Opposed to SB 48
Mr. John Smith
No address furnished
Copper Center, Alaska 99573
POSITION STATEMENT: Opposed to SB 48
ACTION NARRATIVE
TAPE 01-4, SIDE A
Number 001
CHAIRMAN JOHN TORGERSON called the Senate Community & Regional
Affairs Committee meeting to order at 1:36 p.m. Chairman Torgerson
said the meeting was scheduled on a Saturday so the committee could
listen to testimony.
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
Alaska?
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
statement:
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
wrong.
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,
today.
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
taxes.
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
them.
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
resource.
The people in the unorganized boroughs have offered many
solutions to school funding - the legislature ignores
them.
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
servitude.
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
taxes.
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
recommendation.'
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
them.
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
questions:
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
pipeline?
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
costs;
· Fail to produce any appreciable increase in tax or
intergovernmental revenue available for school
operation;
· Exhaust state school construction bond reimbursement
funds;
· Over obligate available state owned land for
municipal land entitlements in many areas of the
state.
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
001
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
Alaska.
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.
With no further business to come before the committee, CHAIRMAN
TORGERSON adjourned the meeting at 3:20 p.m.
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