02/13/2007 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS

               SB   3-COMMUNITY DIVIDEND PROGRAM                                                                              
                                                                                                                                
SENATOR GARY  WILKEN, Alaska  State Legislature,  presented  SB 3,                                                              
the community dividend  program. He noted a fiscal  note of $64.57                                                              
million and a  distribution list of the funds  from the Department                                                              
of Commerce,  Community &  Economic Development  (DCCED).  He read                                                              
the following sponsor statement:                                                                                                
                                                                                                                                
     Senate Bill  3 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.                                                                                  
                                                                                                                                
     Senate Bill  3 funds the new community  dividend program                                                                   
     from  the  general  fund. However,  if  the  Legislature                                                                   
     considers the  general fund insufficient to  support the                                                                   
     community  dividend, the following  funding sources  may                                                                   
     be    considered   in    the    following   order:    1)                                                                   
     Constitutional   Budget  Reserve,   2)  Alaska   Capital                                                                   
     Income  Fund,   and  3)  the  Permanent   Fund  Earnings                                                                   
     Reserve Account.                                                                                                           
                                                                                                                                
     Senate  Bill 3  provides $70  per person  for all  local                                                                   
     municipalities    and    unincorporated     communities.                                                                   
     Additionally,  each   municipality  that  is   a  school                                                                   
     district  and is meeting  the 4mill  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  oneyear   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  act                                                                   
     before drafting and passing their annual budgets.                                                                          
                                                                                                                                
     The  revenuesharing  program  established  under  Senate                                                                   
     Bill  3 distributes  the  state's wealth  equally  among                                                                   
     all  Alaskans  on a  per  person basis.  I  respectfully                                                                   
     request your support.                                                                                                      
                                                                                                                                
4:47:09 PM                                                                                                                    
SENATOR THOMAS asked what size communities qualify.                                                                             
                                                                                                                                
SENATOR  WILKEN  said  it is  "just  a  head  count based  on  the                                                              
population  that  the  department  would issue  every  year.  This                                                              
doesn't have  a minimum,  but…there will be  a minimum  coming out                                                              
of this concept.  I just wasn't uncomfortable with  what it should                                                              
be, and  I would rather leave  it up to  21 and 11 to  decide what                                                              
the minimum would be."                                                                                                          
                                                                                                                                
SENATOR WILKEN,  responding to  Chair Olson,  said there  would be                                                              
no base appropriation, only a per capita dividend.                                                                              
                                                                                                                                
4:48:12 PM                                                                                                                    
CHAIR OLSON asked about feedback from DCCED.                                                                                    
                                                                                                                                
SENATOR  WILKEN  said his  bill  is the  same  as  last year,  and                                                              
"everybody  was OK with  it last  year; I  haven't heard  them say                                                              
it's a great bill  or a bad bill, so they must think  it's a great                                                              
bill." He doesn't have feedback from the administration.                                                                        
                                                                                                                                
CHAIR  OLSON asked  about  an opinion  from  the Alaska  Municipal                                                              
League (AML).                                                                                                                   
                                                                                                                                
SENATOR  WILKEN  said  it  was   supportive  last  year.  He  said                                                              
legislative  analyst,  Kathleen  Wakefield,  prepared a  bill  for                                                              
Senator Stevens in  2005, and it gives a great  history on revenue                                                              
sharing in Alaska. It started in 1970 with $2 million, he noted.                                                                
                                                                                                                                
4:50:01 PM                                                                                                                    
CHAIR OLSON asked why there is no base.                                                                                         
                                                                                                                                
SENATOR WILKEN said  there could be one; he just  didn't know what                                                              
it would be. The  per capita bases that have been  used previously                                                              
are excessive, so  "somebody throw a base in and  let someone talk                                                              
about and let  the body decide." He  said he will not  fall on his                                                              
sword to not  have a base amount,  but he is just  not comfortable                                                              
at  setting one  on  his own.  The  difference  in allocations  is                                                              
dependent  on whether  a community  is supporting  its schools  or                                                              
not. It is either $70 or $100 per resident.                                                                                     
                                                                                                                                
SENATOR  WAGONER surmised  that it  will be $70  [per capita]  for                                                              
communities not  supporting schools at  the 4 mill  level. Senator                                                              
Wilken agreed.                                                                                                                  
                                                                                                                                
4:52:06 PM                                                                                                                    
TIM  BECK, Fairbanks,  thanked Senator  Wilkin  for endorsing  the                                                              
concept of  revenue sharing,  and he would  be willing to  work on                                                              
the bill or SB 72.                                                                                                              
                                                                                                                                
SENATOR WILKEN  said, "You hear  a lot about the  communities that                                                              
have  dissolved."  He spoke  of  the  report  by the  Division  of                                                              
Community   Advocacy  listing   cities   in   various  stages   of                                                              
inactivity  and dissolution.  There have  been 3 communities  that                                                              
have closed  their doors, 8  that have  inquired about it,  8 that                                                              
haven't  had their  FY06  elections certified,  22  that have  not                                                              
submitted  their  required  FY06  budget,  14 that  have  a  large                                                              
financial debt  that may put  them in jeopardy,  and 22  that have                                                              
not renewed  their workman's comp  insurance. He said some  of the                                                              
same  communities  fall into  each  classification,  but it  lends                                                              
credence to  the fact  that the legislature  must do  something to                                                              
share the wealth.  He noted that Anchorage and  Fairbanks were not                                                              
in his bill.                                                                                                                    
                                                                                                                                
SB 3 was held over.