Legislature(2005 - 2006)SENATE FINANCE 532
01/24/2005 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
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| Start | |
| Local Boundary Commission - Overview of Annual Report | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
JOINT MEETING
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
January 24, 2005
1:35 p.m.
SENATE COMMUNITY AND REGIONAL AFFAIRS
Senator Gary Stevens, Chair
Senator Bert Stedman
Senator Thomas Wagoner
Senator Johnny Ellis
Senator Albert Kookesh
HOUSE COMMUNITY AND REGIONAL AFFAIRS
Representative Bill Thomas, Co-Chair
Representative Kurt Olson, Co-Chair
Representative Gabrielle LeDoux
Representative Mark Neuman
Representative Woodie Salmon
Representative Sharon Cissna
HOUSE MEMBERS ABSENT
Representative Pete Kott
OTHER LEGISLATORS PRESENT
Senator Fred Dyson
Senator Donny Olson
Senator Lyman Hoffman
Representative Hawker
COMMITTEE CALENDAR
Local Boundary Commission - Overview of Annual Report
PREVIOUS COMMITTEE ACTION
No previous action to record.
WITNESS REGISTER
Commissioner Edgar Blatchford
Department of Community & Economic Development
PO Box 110800
Juneau, AK 99811-0800
POSITION STATEMENT: Gave borough background and introduced
Arliss Sturgulewski
Arliss Sturgulewski, former Alaska State Senator
No address provided
POSITION STATEMENT: Discussed advantages of boroughs
Darroll Hargraves, Chair
Local Boundary Commission (LBC)
Department of Community & Economic Development
550 West Seventh Avenue, Suite
Anchorage, Alaska 99501-3510
POSITION STATEMENT: Presented LBC annual report and responded
to questions
Dan Bockhorst
Local Boundary Commission
Department of Community & Economic Development
550 West Seventh Avenue, Suite
Anchorage, Alaska 99501-3510
POSITION STATEMENT: Responded to questions related to the LBC
annual report
ACTION NARRATIVE
^Local Boundary Commission - Overview of Annual Report
CHAIR GARY STEVENS called the joint meeting of the Senate and
House Community and Regional Affairs Standing Committees to
order at 1:35:15 PM. Present were Senators Bert Stedman, Thomas
Wagoner, Johnny Ellis, Albert Kookesh, and Chair Gary Stevens
CO-CHAIR BILL THOMAS recognized that House CRA committee members
Representative Kurt Olson, Co-Chair, Gabrielle LeDoux, Mark
Neuman, and Woodie Salmon were present. Representative Sharon
Cissna arrived during the course of the meeting.
1:36:39 PM
COMMISSIONER EDGAR BLATCHFORD introduced Arliss Sturgulewski and
Darroll Hargraves.
1:38:04 PM
He gave a short biography and outlined the local government
principles in the Alaska State Constitution
1:38:45 PM
COMMISSIONER BLATCHFORD reported that Vic Fischer thought that
organized boroughs would exist throughout Alaska within 10 years
of statehood. However, less than 43 percent of Alaska is within
an organized borough. The perception that boroughs aren't
suitable for parts of Alaska is not correct. More than two
thirds of Alaska's organized boroughs encompass areas that are
totally or largely rural.
1:39:48 PM
Those rural boroughs include the Bristol Bay, the North Slope,
Northwest Arctic, Aleutians East, Lake and Peninsula, Yakutat,
Kodiak Island and Haines. Some of those large areas are
predominantly rural and Alaska Native.
1:40:13 PM
The Native population of the Northwest Arctic Borough is greater
than 85 percent. Native leader, legislator and mayor, Eben
Hopson viewed borough government as the means to advance the
social and economic well being of rural residents.
He asked the committees to give careful consideration to the LBC
recommendations.
1:41:40 PM
CHAIR GARY STEVENS noted that Senators Fred Dyson, Donny Olson,
Lyman Hoffman and Representatives Mike Hawker and Peggy Wilson
were present.
1:42:04 PM
ARLYSS STURGULEWSKI, former Alaska State Senator, stated that
developments are underway that should be seen as a call to the
Legislature and Administration to create model borough
boundaries in the unorganized borough. She said it's a good time
to explore the constitutional intent of local government.
Article X calls for maximum local government, which is the
opposite of what we're doing, she said. The state should be
organized into organized and unorganized boroughs so each region
has social, cultural, economic, and geographic considerations.
1:44:14 PM
Unorganized areas grew after statehood and the Legislature needs
to address this issue. There are 16 organized boroughs covering
about 40 percent of the state. Half of the boroughs were formed
voluntarily and half by legislative mandate.
Seven of eight Alaskans live in organized boroughs as do two-
thirds of Alaska Natives.
1:45:24 PM
Why is it important to establish model boundaries to address the
boundaries of the unorganized borough? Major economic
developments are taking place or are proposed and most of this
activity is in the unorganized borough. This includes: Donlin
Creek, the Pogo Mine, and Pebble Beach. There's also talk about
oil and gas in the Doyon area, which is northwest of Fairbanks
as well as the large port authority in the Donlin Creek area.
1:46:54 PM
MS. STURGULEWSKI urged members to look at the Alaska Native
Policy Center and review the work done by the Institute of
Social and Economic Research and the First Alaskan Institute
[First Alaskan's Report]. They concluded that there isn't
sufficient economic, social, school and other data from the
regions.
1:47:33 PM
MS. STURGULEWSKI said this is a wise first step to meet the call
of the Constitutional Convention and begin to divide the
unorganized area into rational unorganized borough units based
on the LBC work.
1:49:36 PM
She stressed offering incentives and working with the
communities.
1:50:04 PM
She suggested working with the Administration to see that data
collection and service delivery could be coordinated with the
model boundaries.
CHAIR GARY STEVENS asked Ms. Sturgulewski to comment on the
incentives she referred to and what they might be.
1:51:06 PM
MS. STURGULEWSKI stated that a positive first step is to help
people understand how to move ahead.
Boroughs are to receive 10 percent of the land in the organized
area when new boroughs are formed. That hasn't happened in all
cases and she suggested looking at the idea of money in lieu of
land to provide needed capital.
REPRESENTATIVE WOODY SALMON asked why Native organizations go to
Washington D.C. to communicate rather than to Juneau.
MS. STURGULEWSKI replied she asked the same question when she
was on the Rural Governments Commission. Unfortunately the
perception is that, "They don't like us down here and they don't
listen." It points to an urban rural split and the fact that
some people simply don't want any more government.
CO-CHAIR THOMAS commented that he fears that forming boroughs
without financial incentives is a recipe for failure.
CHAIR GARY STEVENS asked Mr. Hargraves to begin his
presentation.
1:57:38 PM
DARROLL HARGRAVES, Chair of the Local Boundary Commission,
introduced himself and said the PowerPoint presentation would be
a little different and a bit longer this year. He recognized the
pro bono work Ms. Sturgulewski and Mr. Fischer had done for the
LBC and said that their institutional knowledge was invaluable.
He suggested using the report as a resource whether the
proposals were accepted or not.
MR. HARGRAVES stated that the LBC is one of five boards
established by the constitution. In addition to the LBC, there
is the Judicial Council, the Commission on Judicial Conduct, the
University Board of Regents, and the Legislative Redistricting
Board.
MR. HARGRAVES emphasized that the constitution framers clearly
wanted boundaries of cities and boroughs and political
subdivisions to be determined at the state level.
2:01:56 PM
The LBC is comprised of five members. The Governor appoints a
member from each of the judicial districts to a five year term
for which they receive no compensation.
The LBC is to review petitions for incorporations,
reclassifications, annexations, dissolutions, attachments,
mergers, or consolidations of cities and boroughs. In addition
they adopt standards and procedures for making determinations
and then they give recommendations to the Legislature.
2:03:30 PM
The commission serves in a quasi judicial role on boundary
matters.
2:05:04 PM
MR. HARGRAVES outlined the three chapters in the report:
· Chapter 1 - Gives background on the LBC and the procedures
they follow
· Chapter 2 - Details LBC activities and developments during
2004
· Chapter 3 - The LBC brings public policy issues before the
Legislature - borough government in particular
2:06:21 PM.
Article X, Section 3 of the constitution calls for all of Alaska
to be organized into organized and unorganized boroughs.
Delegate Barrie White asked, "Haven't we here inducement to an
area to remain an unorganized borough and to get the state to
provide all the necessary functions?"
Local Government Committee member, Victor Fischer stated, "...we
don't actually visualize that the state will force boroughs to
organize, since we feel that they should be set up on such a
basis that there will be enough inducement for each one to
organize."
2:14:19 PM
John Rader, Alaska's first Attorney General and House of
Representatives member in 1963 led an effort to institute
borough government.
The 1963 Legislature mandated boroughs in eight regions,
encompassing 84 percent of the population. They were:
· Fairbanks
· Matanuska-Susitna Valleys
· Greater Anchorage area
· Kenai Peninsula
· Kodiak Island
· Juneau
· Sitka
· Ketchikan
2:17:35 PM
Organizing into boroughs provides greater control over education
and ability to supplement state school funding.
2:20:40 PM
Many ask why they have to pay for schools while others have
their schools paid for by the state.
2:22:47 PM
Statistics show that Alaska has failed to provide adequate
incentives to form boroughs.
· Less than four percent of Alaskans live in voluntarily
formed boroughs
· Nearly 84 percent of Alaskans live in mandatory boroughs
· More than 57 percent of the geographic area of Alaska is
unorganized
· It's been more than 12 years since a new borough has formed
2:23:43 PM
The LBC suggests six incentives for borough formation:
· Tax the unorganized borough
· Provide financial aid to existing boroughs
· Increase grants for borough incorporation
· Eliminate requirement for property taxes in "pipeline
boroughs"
· Speed transfers
· Restrict national forest receipts and shared fisheries fees
and taxes to boroughs and cities within boroughs.
2:30:34 PM
MR. HARGRAVES discussed national forest receipts and fisheries
taxes from the 1991 task force.
2:32:09 PM
The key conclusion of the 1979 study was to divide the
unorganized borough in accordance with the state constitution.
2:33:51 PM
Unorganized borough encompasses 368,187 square miles and the
area has few similarities.
2:35:13 PM
The LBC recommends:
· Create incentives to form boroughs
· Establish standards for
· Fund feasibility studies for new boroughs
· Refine 2001 amendment for local contributions for schools
· Consider 2004 school consolidation study
· Increase LBC staff by one.
2:36:43 PM
MR. HARGRAVES concluded his remarks.
CHAIR GARY STEVENS thanked Mr. Hargraves and asked for
questions. He noted that Representative Cissna had joined the
committee.
2:37:51 PM
CO-CHAIR THOMAS asked how restricting national forest and
fisheries receipts might be viewed as an incentive because he's
always viewed them as impact fees. He then asked what would
happen to communities that don't want to organize. Some are
bound to fail because there are no incentives, no land and no
money for the process. Finally he remarked that it seems as
though areas that do become economically successful are
penalized for that success.
He reported that his district has unemployment that ranges from
a low of 30 percent to a high of 86 percent. How can you make
these people pay more, he questioned. "Ten percent of nothing is
truly nothing. I live in one of those 10 percent of nothing
boroughs."
2:40:54 PM
CO-CHAIR THOMAS questioned who has the authority to get land
back to the borough. It wouldn't make much sense to work to form
a borough if the area didn't receive title to the land they were
promised. "I have to protect the people who will be impacted in
my district," he emphasized.
CHAIR GARY STEVENS stated that the issue is large and complex to
consider all at once when nothing has happened for 12 years. He
asked whether the LBC had incremental steps toward organization
to recommend.
MR. HARGRAVES said the model borough boundaries are in place and
the next step would be to form unorganized boroughs for those
areas. Forming unorganized boroughs in these model areas would
keep predatory boroughs from annexing the wealth base in the
area.
He assured members the LBC isn't suggesting that all the areas
be mandated to organized into boroughs immediately. But, "With
enough carrots in place, enough incentives, there could be a few
step forward and become boroughs on their own."
2:43:38 PM
SENATOR DONNY OLSON asked which commission member represents the
people in the unorganized borough.
MR HARGRAVES replied the point is well taken. No commission
member lives inside the unorganized area.
2:44:50 PM
SENATOR ALBERT KOOKESH commented, "As a legislator, I really
want to see the whole picture and I would really appreciate next
time you come before this committee... to give us the rationale
why we shouldn't" organize into boroughs.
MR. HARGRAVES replied it's hard to see the reasons for not
organizing.
2:45:58 PM
REPRESENTATIVE SALMON said he agrees with the need for the whole
picture. He suggested looking at the economic factor that some
people in his district aren't able to pay their electric bill.
CHAIR GARY STEVENS asked whether he wouldn't agree that some
areas in the unorganized borough have a tax base and could
contribute to their schools.
2:47:23 PM
REPRESENTATIVE SALMON agreed that's the case in some areas.
2:47:37 PM
SENATOR BERT STEDMAN commented that some areas in the
unorganized borough have a tax base and they do pay for schools,
but for the areas at the other extreme, it might be years before
they could afford to organize. "I've got several areas in my
district that do pay their 4-mil share," he said.
MR. HARGRAVES added that's because they're first class cities
and that the LBC has concerns about them because of the
inequity. First class cities are paying the required 4-mils for
education while the community next door has a fully funded
school district and they don't pay anything. "Sooner or later,
you may have that as a major thing to deal with," he warned.
2:50:12 PM
SENATOR THOMAS WAGONER observed that there's been lots of talk
and not much has happened. He suggested reviewing previous
testimony both for and against organizing into boroughs.
SENATOR LYMAN HOFFMAN reported that he has both organized and
unorganized areas in his district and adding another layer of
government is the wrong way to go. He suggested reviewing
existing governments before adding more.
2:52:32 PM
SENATOR HOFFMAN pointed out that the Yukon Kuskokwim Delta is 95
percent federal land so there's no tax base. The state receives
PILT [Payment in Lieu of Taxes] monies and most of those funds
are siphoned off and the local governments that exist receive
just an allocation of the formula.
The state saves millions of dollars in health care because the
federal government is picking up the tab and that's why Alaskans
go to Washington D.C. to ask for help rather than going to
Juneau. Housing and the VPSO program are other areas in which
the State of Alaska isn't providing much help.
2:54:38 PM
REPRESENTATIVE SALMON said in some areas in his district the
federal government provides more services than the state
provides.
REPRESENTATIVE PEGGY WILSON pointed out that the LBC is doing
what they are constitutionally mandated to do.
2:56:49 PM
She said it's a fairness issue for legislators. Why should
communities continue to pay their fair share when others are
able to pay for schools but don't? The state will end up paying
more if there is no resolution.
CO-CHAIR THOMAS questioned the activity in the Tok area and how
it might affect the model boundaries for the area.
MR. HARGRAVE said existing boroughs typically annex lucrative
areas.
SENATOR WAGONER reported that the Kenai Peninsula Borough is
about 85 percent federal land, but that doesn't stop them from
funding their schools. He agreed with Senator Hoffman that
adding another layer of government isn't desirable, but areas
that can pay their own way should do so.
3:00:52 PM
MR. HARGRAVES emphasized that the LBC doesn't intend that every
area be organized immediately.
REPRESENTATIVE MARC NEUMAN asked which areas might be organized
first.
3:01:48 PM
MR. HARGRAVES replied the commission wouldn't enter into that
discussion because they respond to petitions.
REPRESENTATIVE GABRIELLE LeDOUX asked if a first class
municipality might pay higher property taxes if they were
incorporated into a lower income area.
3:03:50 PM
DAN BOCKHORST, LBC staff member, said the state funding formula
for local education requirements reflects the capacity of a
region to support its schools.
He suggested a comparison of home-rule and first class cities in
unorganized areas. St. Mary's is a first class city in the
unorganized borough and they contribute $125 per student per
year. Comparatively, the North Slope Borough is required to
contribute nearly $5,000 per student.
"If you had a relatively prosperous first class city surrounded
by very poor, unincorporated communities, the burden placed on
the regional government would not be disproportionately higher
as a result of that. It would reflect the tax base in that
entire region."
REPRESENTATIVE LeDOUX questioned whether the people of St Mary's
would be required to pay $125 per student for the entire area if
they were incorporated into an organized borough.
MR. BOCKHORST said they wouldn't and used Metlakatla, which has
taxable land value of next to nothing, as an example. "The
burden that is placed on a municipal school district reflects
the tax base within the borough. If there is theoretically zero
tax base in that region, the local contribution is 4-mils of
zero."
3:07:02 PM
CO-CHAIR THOMAS asked if the LBC has the authority to look into
school consolidation.
MR. BOCKHORST said the Legislature in 2003 directed the LBC to
look into that issue with the Department of Education. They
filed a report with the Legislature in 2004.
CHAIR GARY STEVENS asked about the supposition that school
consolidation is an incentive to become a borough.
MR. BOCKHORST replied it's viewed both ways.
3:10:31 PM
CO-CHAIR THOMAS asked for a copy of the report on school
consolidation.
CHAIR GARY STEVENS thanked the commission and asked for closing
comments.
3:12:07 PM
MR. HARGRAVES said the staff is capable and readily available
and they hope the report is useful.
CHAIR GARY STEVENS adjourned the meeting at 3:12:42 PM
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