Legislature(2005 - 2006)BELTZ 211

01/18/2006 01:30 PM COMMUNITY & REGIONAL AFFAIRS


Download Mp3. <- Right click and save file as

Audio Topic
01:46:45 PM Start
01:47:44 PM SB219
02:44:34 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 219 COMMUNITY DIVIDEND PROGRAM TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                        January 18, 2006                                                                                        
                           1:46 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Gary Stevens, Chair                                                                                                     
Senator Bert Stedman                                                                                                            
Senator Johnny Ellis                                                                                                            
Senator Albert Kookesh                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Thomas Wagoner                                                                                                          
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Carl Moses                                                                                                       
Representative Bill Thomas                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 219                                                                                                             
"An Act relating to the community dividend program; and                                                                         
providing for an effective date."                                                                                               
                                                                                                                                
     HEARD AND HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 219                                                                                                                  
SHORT TITLE: COMMUNITY DIVIDEND PROGRAM                                                                                         
SPONSOR(s): SENATOR(s) WILKEN                                                                                                   
                                                                                                                                
01/09/06       (S)       PREFILE RELEASED 12/30/05                                                                              
01/09/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/09/06       (S)       CRA, FIN                                                                                               
01/18/06       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Senator Gary Wilken                                                                                                             
Alaska State Capitol                                                                                                            
Juneau, Alaska 99801-1182                                                                                                       
POSITION STATEMENT: Sponsor SB 219                                                                                            
                                                                                                                                
Wayne Stevens, President                                                                                                        
Alaska State Chamber of Commerce                                                                                                
217 Second Street                                                                                                               
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Stated support for a sustainable community                                                               
dividend program                                                                                                                
                                                                                                                                
James Hornaday, Mayor                                                                                                           
City of Homer                                                                                                                   
491 E. Pioneer Ave.                                                                                                             
Homer, Alaska 99603                                                                                                             
POSITION STATEMENT: Supported some kind of community revenue                                                                  
sharing                                                                                                                         
                                                                                                                                
Randy Frank                                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of sustainable                                                                       
community revenue sharing                                                                                                       
                                                                                                                                
Tim Beck                                                                                                                        
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of reinstating                                                                      
municipal revenue sharing in some fashion                                                                                       
                                                                                                                                
Kevin Ritchie                                                                                                                   
Alaska Municipal League                                                                                                         
217 Second Street                                                                                                               
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Spoke in support of sustainable revenue                                                                  
sharing programs                                                                                                                
                                                                                                                                
Valerie McCandless, Mayor                                                                                                       
City of Wrangell                                                                                                                
P.O. Box 531                                                                                                                    
Wrangell, Alaska 99929                                                                                                          
POSITION STATEMENT:  Testified in support of a sustainable                                                                    
community dividend                                                                                                              
                                                                                                                                
Jennifer Yuhas                                                                                                                  
Fairbanks North Star Borough                                                                                                    
PO Box 71267                                                                                                                    
Fairbanks, Alaska 99707                                                                                                         
POSITION STATEMENT:  Read supporting testimony into the record                                                                
                                                                                                                                
Dave Talerico, Mayor                                                                                                            
Denali Borough                                                                                                                  
P.O. Box 480                                                                                                                    
Healy, Alaska 99743                                                                                                             
POSITION  STATEMENT:   Testified in  support of  the program  and                                                             
asked that a  minimum base amount for  small community operations                                                               
be included                                                                                                                     
                                                                                                                                
Gary Hennigh, City Manager                                                                                                      
City of King Cove                                                                                                               
P.O. Box 37                                                                                                                     
King Cove, Alaska                                                                                                               
POSITION STATEMENT:  Supported the effort represented in SB 219                                                               
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  GARY  STEVENS called  the  Senate  Community and  Regional                                                             
Affairs  Standing  Committee  meeting  to order  at  1:46:45  PM.                                                             
Present were  Senators Stedman, Kookesh  and Chair  Gary Stevens.                                                               
Senator Ellis arrived as the meeting was in progress.                                                                           
                                                                                                                                
               SB 219-COMMUNITY DIVIDEND PROGRAM                                                                            
                                                                                                                              
CHAIR GARY  STEVENS announced SB  219 to be up  for consideration                                                               
and noted  that the  committee would hear  a number  of community                                                               
dividend plans during the course of the legislative session.                                                                    
                                                                                                                              
1:47:44 PM                                                                                                                    
                                                                                                                                
Senator Gary Wilken, sponsor of SB  219, introduced the bill as a                                                               
community dividend  suggestion and then reviewed  the material in                                                               
the packets.                                                                                                                    
                                                                                                                                
CHAIR  GARY STEVENS  asked for  a motion  to adopt  the committee                                                               
substitute (CS).                                                                                                                
                                                                                                                                
1:50:16 PM                                                                                                                    
                                                                                                                                
SENATOR STEDMAN motioned to adopt \Y version CS for SB 219.                                                                     
                                                                                                                                
SENATOR  WILKEN read  the following  sponsor  statement into  the                                                               
record:                                                                                                                         
                                                                                                                                
     Senate  Bill   219  creates  a   sustainable  community                                                                    
     dividend program  to share state revenue  with Alaska's                                                                    
     local   municipal    governments   and   unincorporated                                                                    
     communities.  The proposed  community dividend  program                                                                    
     is  in response  to concerns  expressed by  communities                                                                    
     throughout  Alaska. Higher  costs of  basic living  and                                                                    
     government needs,  coupled with  diminished traditional                                                                    
     state  support, have  placed greater  financial burdens                                                                    
     on all local governments, large and small alike.                                                                           
                                                                                                                                
     Under Senate Bill  219, the funding source  for the new                                                                    
     community   dividend  program   is  structured   to  be                                                                    
     sustainable,   the  most   important   aspect  of   any                                                                    
     meaningful  state revenue  sharing  plan. One-third  of                                                                    
     the funds  come from each of  the following sustainable                                                                    
     sources:  1)  the earnings  on  the  Amerada Hess  sub-                                                                    
     account of  the Permanent  Fund, 2)  the Constitutional                                                                    
     Budget  Reserve, and  3)  the  Permanent Fund  Earnings                                                                    
     Reserve Account.                                                                                                           
                                                                                                                                
     Senate Bill 219  provides $70 per person  for all local                                                                    
     municipalities    and    unincorporated    communities.                                                                    
     Additionally,  each  municipality   that  is  a  school                                                                    
     district and  is meeting the 4-mill  local contribution                                                                    
     school requirement  will receive an additional  $30 for                                                                    
     a total of $100 per resident.                                                                                              
                                                                                                                                
     The  Department of  Commerce,  Community, and  Economic                                                                    
     Development  will   issue  the  dividends   to  Alaskan                                                                    
     communities on July 1 of  the year following the actual                                                                    
     legislative  appropriation.  This one-year  delay  will                                                                    
     allow local  governments to  build an  operating budget                                                                    
     based on  firm numbers. There  will be no need  for the                                                                    
     budget  writers to  wait for  the  legislature to  take                                                                    
     action  before   drafting  and  passing   their  annual                                                                    
     budgets.                                                                                                                   
                                                                                                                                
     Alaskans have  enjoyed the benefit of  their individual                                                                    
     Permanent Fund  dividend for many  years; the  time has                                                                    
     come to share the  state's wealth with our communities.                                                                    
     Senate Bill  219 utilizes three robust  and sustainable                                                                    
     revenue sources  to provide  each Alaskan  community an                                                                    
     annual dividend.                                                                                                           
                                                                                                                                
1:52:34 PM                                                                                                                    
                                                                                                                                
SENATOR  WILKEN remarked  he introduced  SB 219  as an  effort to                                                               
equally  share the  state's wealth.  Furthermore,  he would  hope                                                               
that  everyone sees  the folly  of funding  a community  dividend                                                               
program  from  the general  fund  because  there will  be  budget                                                               
deficit problems again.  He encouraged using the  assets that are                                                               
available and sustainable.                                                                                                      
                                                                                                                                
In conclusion, Senator Wilken posed the following questions:                                                                    
                                                                                                                                
   1. Do we want a community dividend?                                                                                          
   2. If we want a dividend, to what level?                                                                                     
  3. Once the level is determined, what is the funding source?                                                                  
                                                                                                                                
1:54:31 PM                                                                                                                    
                                                                                                                                
CHAIR GARY STEVENS opened public testimony.                                                                                     
                                                                                                                                
1:54:52 PM                                                                                                                    
                                                                                                                                
WAYNE  STEVENS,  President,  Alaska State  Chamber  of  Commerce,                                                               
stated  support  for  SB  219.  The  state  chamber  supports  "a                                                               
sustainable  community  dividend  using an  endowment  management                                                               
method to provide  local tax relief to business  and families and                                                               
to assist in providing basic public services throughout Alaska."                                                                
                                                                                                                                
1:56:30 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY  STEVENS  asked  Senator Wilken  to  comment  on  the                                                               
rational for using funds from the three proposed sources.                                                                       
                                                                                                                                
SENATOR  WILKEN  responded  those  sources  are  sustainable  and                                                               
robust and they provide flexibility.  First, he likes the idea of                                                               
setting Amerada  Hess aside  for a  specific purpose.  Taking $26                                                               
million  from  that  source  still allows  it  to  grow.  Second,                                                               
revenue from  the CBR  would be available  unless the  draw would                                                               
pull the fund  below $1 billion. Current  estimates indicate that                                                               
drawing $20 million would amount  to just one-third to one-fourth                                                               
of the  earnings of  the CBR.  The third  source is  the earnings                                                               
reserve. According to a Department  of Revenue report, taking $20                                                               
million to $23 million out annually  over the next 10 years would                                                               
reduce Permanent  Fund Dividend  checks by  just $49  spread over                                                               
the 10-year period.                                                                                                             
                                                                                                                                
2:00:32 PM                                                                                                                    
                                                                                                                                
CHAIR GARY  STEVENS asked if  one-third would actually  come from                                                               
each revenue source.                                                                                                            
                                                                                                                                
SENATOR WILKEN replied the  bill currently contemplates one-third                                                               
from  each source,  but  a wiser  course would  be  to take  some                                                               
amount greater than  one-third from Amerada Hess  and the balance                                                               
from the other two sources in equal portions.                                                                                   
                                                                                                                                
CHAIR GARY STEVENS recognized that  Representative Carl Moses and                                                               
Representative Bill Thomas, Jr. were also in attendance.                                                                        
                                                                                                                                
2:01:32 PM                                                                                                                    
                                                                                                                                
SENATOR BERT  STEDMAN suggested that  the discussion  include the                                                               
state's overall fiscal  position with respect to  using a portion                                                               
of the  earnings reserve as  well as the  issue of the  nearly $6                                                               
billion  in  under  funded pension  and  benefits  liability.  He                                                               
pointed  out that  some  of that  liability sits  in  lap of  the                                                               
communities, cities, and boroughs.                                                                                              
                                                                                                                                
He  asked  whether  the  proposed  help  to  the  communities  is                                                               
targeted  for pension  liability or  whether the  proposal is  an                                                               
entirely separate issue,  which would require the  creation of an                                                               
entirely different funding mechanism.                                                                                           
                                                                                                                                
SENATOR WILKEN  replied how to use  the money is a  local option.                                                               
Municipalities  that contribute  to schools  are targeted  with a                                                               
school support supplement, but that's as  far as he is willing to                                                               
go in directing how the funds are used.                                                                                         
                                                                                                                                
SENATOR  STEDMAN clarified  his questions  by saying  that direct                                                               
appropriations   could  be   made  into   the  trust   or  direct                                                               
appropriations could be  made to communities and  cities. He then                                                               
asked  whether the  $63 million  allocation to  communities would                                                               
relinquish the state's voluntary help  to communities to fund the                                                               
payroll increases they face for the next 15 years or more.                                                                      
                                                                                                                                
SENATOR  WILKEN  responded it  isn't  his  intention to  mix  the                                                               
PERS/TRS responsibilities with SB 219. How  to use the funds is a                                                               
local issue.  "If my borough wants  to spend their $8  million on                                                               
their  PERS/TRS  then  that's their  decision  and  they're  held                                                               
accountable," he said.                                                                                                          
                                                                                                                                
2:05:29 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY STEVENS  asked about  double payments.  He referenced                                                               
the community dividend estimates  for Fairbanks and the Fairbanks                                                               
North Star Borough and asked how the figures were derived.                                                                      
                                                                                                                                
SENATOR  WILKEN acknowledged  the  question  had arisen  earlier.                                                               
Using a  visual aid, he  demonstrated that Fairbanks,  North Pole                                                               
and the Fairbanks  North Star Borough would each  receive the $70                                                               
per  capita dividend.  Because the  borough  operates the  school                                                               
district,  it would  receive the  $30 per  capita school  support                                                               
supplement.                                                                                                                     
                                                                                                                                
CHAIR  GARY  STEVENS remarked  the  borough  wouldn't get  a  $70                                                               
dividend for those people living in Fairbanks or North Pole.                                                                    
                                                                                                                                
SENATOR WILKEN agreed and added the CS clarifies that point.                                                                    
                                                                                                                                
2:07:09 PM                                                                                                                    
                                                                                                                                
CHAIR GARY  STEVENS questioned whether  a dividend  program might                                                               
discourage some communities from moving on to form boroughs.                                                                    
                                                                                                                                
SENATOR WILKEN  replied he certainly  hopes that wouldn't  be the                                                               
outcome. He  mentioned the discussion regarding  minimum payments                                                               
to  small communities  and  said his  response  is that  everyone                                                               
should  be treated  the same.  He recommended  that conversations                                                               
take place  regarding how to  make the  money go farther.  If the                                                               
bill brings  local governance, that's  good but it's not  a large                                                               
part of this bill, he concluded.                                                                                                
                                                                                                                                
2:09:20 PM                                                                                                                    
                                                                                                                                
JAMES   HORNADAY,   Mayor,   City   of   Homer,   testified   via                                                               
teleconference  and  read  a city  council  resolution  into  the                                                               
record urging  the state  to establish  a sustainable  program to                                                               
share  revenue with  all  Alaskan  communities. Furthermore,  the                                                               
resolution  suggested that  each community  receive no  less than                                                               
$75,000 beginning in 2007. [A copy  of the full resolution may be                                                               
found in the bill file.]                                                                                                        
                                                                                                                                
MAYOR HORNADAY  outlined some  of the  anticipated City  of Homer                                                               
projects  and concluded  his remarks  by reiterating  support for                                                               
some type of community revenue sharing.                                                                                         
                                                                                                                                
2:14:13 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY  STEVENS  informed  him that  four  or  five  revenue                                                               
sharing bills have been introduced.  He encouraged Mayor Hornaday                                                               
to watch closely.                                                                                                               
                                                                                                                                
2:14:58 PM                                                                                                                    
                                                                                                                                
RANDY  FRANK,  Fairbanks  North  Star  Borough  Assembly  member,                                                               
testified via teleconference  as a private citizen  in support of                                                               
some sort of  community dividend program. In  particular, he said                                                               
he likes the  term "sustainable" so the program  could be counted                                                               
on in years  to come. Also, it's  helpful if a program  is set up                                                               
so that a community knows what  it will receive before the budget                                                               
is prepared.                                                                                                                    
                                                                                                                                
He  stated  support for  spreading  the  burden among  the  three                                                               
revenue  sources   because  it  allows  needed   flexibility  and                                                               
sustainability. I really like this idea, he concluded.                                                                          
                                                                                                                                
2:17:41 PM                                                                                                                    
                                                                                                                                
TIM  BECK,  Fairbanks  North  Star  Assembly  member  and  Alaska                                                               
Municipal League  member, testified via teleconference  to answer                                                               
the  three questions  Senator Wilken  posed.  Yes, we  do want  a                                                               
program  and its  size should  be large  enough to  be meaningful                                                               
rather than  a token effort.  Finally, the funding  source should                                                               
be sustainable. That is key to the entire program, he asserted.                                                                 
                                                                                                                                
In  conclusion he  thanked Senator  Wilken and  other legislators                                                               
who are  working to reinstate  municipal revenue sharing  in some                                                               
fashion.                                                                                                                        
                                                                                                                                
CHAIR  GARY   STEVENS  noted  that  Bill   Rolfzen,  Division  of                                                               
Community   Advocacy,  Department   of  Commerce,   Community,  &                                                               
Economic Development (DCCED) was available for questions.                                                                       
                                                                                                                                
2:19:35 PM                                                                                                                    
                                                                                                                                
KEVIN  RITCHIE,  Executive   Director,  Alaska  Municipal  League                                                               
(AML), opened  his remarks by  stating appreciation for  the bill                                                               
then  referenced the  2006 AML  policy statement,  which supports                                                               
use of Permanent  Fund earnings. He agreed with  the sponsor that                                                               
using a portion of the  Permanent Fund wouldn't noticeably affect                                                               
the value of the dividend. In  fact, the per capita payment could                                                               
be viewed  as $70 to  $100 of tax  relief each year.  Because the                                                               
money  would be  taken from  government and  given to  government                                                               
there wouldn't  be a federal  income tax issue, which  makes this                                                               
an efficient way to offer relief to communities and businesses.                                                                 
                                                                                                                                
The proposed bill would not  only provide substantial tax relief,                                                               
it  would  also keep  small  communities  viable. As  a  business                                                               
issue, that  is good for  all of Alaska. "We're  actually brought                                                               
closer together  economically by  our great distances,"  he said.                                                               
Citing the Anchorage Economic  Development Corporation he pointed                                                               
to the  number of jobs in  urban areas that exist  to serve rural                                                               
areas.                                                                                                                          
                                                                                                                                
The  community  dividend is  a  sustainable  concept. The  former                                                               
revenue sharing  program existed in  dwindling form for  35 years                                                               
and AML  is enthusiastic about  helping to develop  a sustainable                                                               
program  that  provides  long-term  tax relief  and  helps  small                                                               
communities.                                                                                                                    
                                                                                                                                
He  suggested that  further conversations  are needed  to provide                                                               
substantial relief  to very small communities.  They have certain                                                               
record keeping and meeting requirements  to "keep the lights on."                                                               
We'd like  to work  with you  in that  area, but  this is  a good                                                               
start in the discussion, he concluded.                                                                                          
                                                                                                                                
2:23:38 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY  STEVENS referenced  a  data  sheet prepared  by  the                                                               
Division of Community  Advocacy and noted that a  number of small                                                               
communities are experiencing serious difficulties.                                                                              
                                                                                                                                
2:24:16 PM                                                                                                                    
                                                                                                                                
SENATOR STEDMAN asked Mr. Ritchie  to address the issue of double                                                               
or  triple  dipping  as  the   state  makes  an  effort  to  help                                                               
communities in  financial difficulty. In particular  he asked him                                                               
to address  the question in  terms of the PERS/TRS  liability and                                                               
the AML flier that talks about  a maximum contribution rate of 20                                                               
percent of payroll. Who's going to pay the liability, he asked.                                                                 
                                                                                                                                
2:25:13 PM                                                                                                                    
                                                                                                                                
MR. RITCHIE responded all the  liability facing communities would                                                               
have to be addressed in  another committee and that approximately                                                               
half  of  the  $6  billion  unfunded  liability  falls  on  local                                                               
government,  school  districts  and  the  university.  For  years                                                               
municipalities contributed 5  to 10 percent of  salary and didn't                                                               
give much thought to the  retirement system and now the actuaries                                                               
say that  on average 40 percent  of all salaries paid  must go to                                                               
the retirement system. Over the  last several years the state has                                                               
responded by  raising the PERS  rates for employers by  5 percent                                                               
per year.  That means  that a municipal  government is  likely to                                                               
spend 60  to 75 percent of  its budget on salaries  and in school                                                               
districts,  salaries  probably  represent  closer  to  85  or  90                                                               
percent of the budget.                                                                                                          
                                                                                                                                
With  regard  to  paying  the bills,  he  said  the  Constitution                                                               
envisioned  state  and  local   government  working  together  to                                                               
minimize  the  impact  on  taxpayers.   I  can't  answer  Senator                                                               
Stedman's  question directly,  he  said, but  the Legislature  is                                                               
working on  the problem  and the  retirement management  board is                                                               
also working on the issue.                                                                                                      
                                                                                                                                
In November  the AML  passed a  resolution stating  that PERS/TRS                                                               
shouldn't be  more than  20 percent  of payroll.  How to  pay the                                                               
amount  in excess  of  20 percent  will be  the  subject of  much                                                               
discussion but  the Alaska Retirement  Management Board  has said                                                               
that it will discuss that point with the Legislature.                                                                           
                                                                                                                                
2:29:19 PM                                                                                                                    
                                                                                                                                
SENATOR STEDMAN  stated his concern  is that cities  need revenue                                                               
help  from the  state. Clearly  there  is a  PERS liability  that                                                               
rests with  municipalities and  not the state,  but it's  a state                                                               
obligation to help municipalities  when their revenue is squeezed                                                               
and  they are  in  financial crisis.  However,  tying up  revenue                                                               
streams that  the state  may need either  partially or  wholly to                                                               
tackle this problem is a dangerous road to take.                                                                                
                                                                                                                                
He  suggested  that  it  is   preferable  to  look  at  help  for                                                               
municipalities  in  its  entirety  rather  than  in  a  segmented                                                               
fashion. If the piecemeal approach  is taken, municipalities will                                                               
be back in a few months  asking for more help with their PERS/TRS                                                               
liability.  Certainly,   some  communities  are   having  trouble                                                               
grasping the fact that they have this liability.                                                                                
                                                                                                                                
He summarized his  concern with the bill relates  to the unfunded                                                               
liability  and dealing  with  the  Permanent Fund  in  an era  of                                                               
expected revenue excesses over expenditures.                                                                                    
                                                                                                                                
2:32:37 PM                                                                                                                    
                                                                                                                                
JENNIFER  YUHAS,  Fairbanks  North Star  Borough  representative,                                                               
testified  via teleconference  and  read  Chief Finance  Officer,                                                               
Michael  Lamb's,  supporting  testimony   into  the  record.  The                                                               
borough supports a sustainable community  dividend program and in                                                               
particular  the   provision  that  recognizes   communities  that                                                               
support their schools. [A copy of  the letter may be found in the                                                               
bill file.]                                                                                                                     
                                                                                                                                
2:34:37 PM                                                                                                                    
                                                                                                                                
CHAIR GARY  STEVENS noted  that Leslie  Ridle with  the Anchorage                                                               
Mayor's Office and Elaine Price  from Coffman Cove were listening                                                               
online.                                                                                                                         
                                                                                                                                
DAVE   TALERICO,    Mayor,   Denali   Borough,    testified   via                                                               
teleconference in support of the bill.                                                                                          
A key  feature is  that funds  may be used  for any  municipal or                                                               
community   purpose.  Furthermore,   he  considers   the  funding                                                               
mechanism to be appropriate and sustainable.                                                                                    
                                                                                                                                
Finally, he voiced  concern that a minimum base  amount for small                                                               
community operations is not included.  If a minimum were included                                                               
he   could  be   "incredibly  supportive."   He  then   expressed                                                               
appreciation  to the  sponsor and  said the  proposal is  working                                                               
toward a resolution.                                                                                                            
                                                                                                                                
2:36:42 PM                                                                                                                    
                                                                                                                                
GARY HENNIGH,  Manager, City of  King Cove, testified  in support                                                               
of the effort  represented in SB 219. As city  manager he said he                                                               
understands  and  supports  the sustainability  features  of  the                                                               
program.                                                                                                                        
                                                                                                                                
He outlined  the measures the  City of King Cove  instituted when                                                               
revenue  sharing and  municipal assistance  disappeared in  2003.                                                               
That included increasing sales taxes  25 percent and initiating a                                                               
fisheries business impact tax on the lone fish processor.                                                                       
                                                                                                                                
He  voiced   support  for  the  financial   parameters  found  in                                                               
Representative  Moses' House  Bill  28 because  that amount  more                                                               
closely  anticipates what  the city  projects its'  needs to  be.                                                               
With anticipated need  in mind, he suggested  averaging the three                                                               
highest years from when there  was revenue sharing to establish a                                                               
base amount. This  is a compromise between SB 219  and what might                                                               
ultimately pass, he concluded.                                                                                                  
                                                                                                                                
2:40:33 PM                                                                                                                    
                                                                                                                                
VALERIE  McCANDLESS,  Mayor,  City  of  Wrangell,  testified  via                                                               
teleconference  in support  of a  sustainable community  dividend                                                               
program with  a minimum established  for smaller  communities. We                                                               
will  be  following  all  the  bills  as  they  go  forward,  she                                                               
concluded.                                                                                                                      
                                                                                                                                
2:41:31 PM                                                                                                                    
                                                                                                                                
SENATOR  STEDMAN stated  that legislators  do recognize  the need                                                               
for help for  communities and the discussion will  center on what                                                               
will be encompassed in giving  that help. He assured participants                                                               
that  at the  end  of  the day  the  Legislature  will take  some                                                               
action.                                                                                                                         
                                                                                                                                
2:42:15 PM                                                                                                                    
                                                                                                                                
CHAIR GARY STEVENS asked the sponsor if he had closing comments.                                                                
                                                                                                                                
2:42:23 PM                                                                                                                    
                                                                                                                                
SENATOR  WILKEN referenced  the  report  by legislative  research                                                               
dated  October   10  titled  "Revenue  Sharing   in  Alaska"  and                                                               
commented that  it is  a good summary  and indicates  that Alaska                                                               
has done a good job.                                                                                                            
                                                                                                                                
He  noted  that  there  are 11  different  proposals  on  revenue                                                               
sharing,  but  he  wanted   to  recognize  Representative  Moses'                                                               
efforts in particular because he's kept  the idea in front of the                                                               
Legislature year after year.                                                                                                    
                                                                                                                                
CHAIR GARY STEVENS announced he would hold SB 219 in committee.                                                                 
                                                                                                                                
CHAIR GARY STEVENS adjourned the meeting at 2:44:34 PM.                                                                       

Document Name Date/Time Subjects