Legislature(2007 - 2008)BELTZ 211
04/17/2007 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB3 | |
| SB136 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 136 | TELECONFERENCED | |
| += | SB 3 | TELECONFERENCED | |
SB 3-COMMUNITY DIVIDEND PROGRAM
CHAIR OLSON announced SB 3 to be up for consideration.
SENATOR GARY WILKEN, Sponsor of SB 3, said this bill was heard a
few months ago, and it is a revenue-sharing bill based on a per-
head allocation across Alaska. It would be $70 per person, but
an additional $30 would be given to municipalities meeting the
4-mill requirement in the foundation formula supporting their
schools. The funding source is flexible. If there isn't enough
money in the general fund, the funds could come from the CBR
[constitutional budget reserve], the Alaska capital income fund,
or the permanent fund earnings reserve. He said it will be
forward funded by one year to help municipalities plan ahead.
"In the bill there is no minimum…because I really didn't know
what to put in." He will leave it up to the body. He said this
bill will not go anywhere in the Senate, but it is important to
get the concept out there. The bill is sustainable, flexible,
debatable, and predictable, he stated. He added that he is
concerned that a general dip out of the revenue stream is a
slippery slope, but revenue sharing is the thing to do. It is
healthy to have the discussion every year. The fiscal note is
about $67 million, he told the committee.
3:40:32 PM
SENATOR WAGONER said the state has an unfunded mandate to every
organized area of $150,000 in real property tax forgiveness for
senior citizens. While the fiscal note seems large, "if you
figure up that unfunded mandate throughout the State of Alaska
just in the municipal areas, I think you will find well over 50
percent of that amount is already required of the local
governments in tax forgiveness for senior citizens." A past
legislature did that and then took the funding away, he added.
"I do believe we should have some revenue sharing. We are taking
a lot of responsibility on ourselves paying their PERS/TRS
requirements this year, but at the same time, I think this is
something really to consider and look at when we look at
unfunded mandates of that nature and allocate them into this
formula somewhere too."
CHAIR OLSON asked what other solutions he has.
SENATOR WAGONER said the state mandates the tax forgiveness and
should pay it. He said that is the simplest solution. There is
no bill to do that, and the committee should address it. "Either
eliminate the mandate…or fund the mandate you put out there
because they are not both fair."
3:43:02 PM
CHAIR OLSON asked how he came up with the 4-mill standard.
SENATOR WILKEN said the state's foundation formula requires
organized communities to come up with four tenths of one percent
of their full and true assessed value. It's the law, he said, so
he used it. There are some communities that have the ability to
pay less than that, "but I don't address that in this
legislation." Those doing that are paying for their schools. The
$30 could be claimed to support the schools, he said.
CHAIR OLSON asked how many communities will be left out [not
qualify for the extra $30].
3:44:10 PM
SENATOR WILKEN said it would be any school district run in
unorganized Alaska.
KATHIE WASSERMAN, Executive Director, Alaska Municipal League
(AML), said it used to be just the small communities that needed
financial help, but now larger communities also need money.
While they need help with PERS, revenue-sharing is still needed
because that money is what the communities use to provide basic
services or property tax relief. The AML has two bills on
revenue sharing, but the vehicle doesn't matter at this point.
"If we could get the legislature and the administration behind
Senator Wilken's bill, we're there." She said the AML prefers
the funding mechanism and the base amount in its own bill.
3:46:39 PM
MS. WASSERMAN said the large communities get the benefit of the
per capita funds, and the small ones make their money on the
base amount. She recommends a base of $25,000 for unorganized
communities, $75,000 for cities, and $250,000 for boroughs.
MIKE BLACK, Director, Division of Community Advocacy, Department
of Commerce, Community & Economic Development, said the division
supports revenue-sharing. Local governments are the primary
deliverers of services to Alaska residents, and they are facing
extraordinary costs. The legislature has tried to relieve some
of that through the PERS and TRS funding, but there are many
communities that have no PERS or TRS obligations but have higher
costs anyway. He said forward funding is a good idea, and he
supports base funding for the very small communities. This bill
is a place to start the conversation, he stated.
3:49:22 PM
CHAIR OLSON asked about the fiscal note.
MR. BLACK said the fiscal note is a reasonable starting point
but is "somewhat higher than what we had originally thought
about, but to tell you the truth, it's certainly a very
reasonable amount in my opinion."
CHAIR OLSON noted that the fiscal note is significantly more
than the governor's proposal and asked Mr. Black's opinion.
MR. BLACK said the amount that was included in the budget was
drawn from numbers provided by the previous administration, and
it was not a carefully thought-out process. The $64 million in
SB 3 is about $20 million more but still reasonable because of
the costs that local governments are facing, he opined.
3:51:12 PM
SENATOR WILKEN said the section regarding the 4 mills also
includes the 45 percent option. So Unalaska, Valdez, Skagway and
the North Slope would also qualify. He reiterated his earlier
testimony. "We can afford it and we owe it," he stated.
SENATOR THOMAS asked what he meant by saying "we owe it."
SENATOR WILKEN said Alaska's resources are on state land.
Revenue sharing started in 1970, and when things got good in
1980 "we started up with safe communities and added to that." He
said, "Things started to throttle itself back…so where we are
today is zero." Managing the state's wealth has led the state to
the point of helping the communities again. "We owe it because
we're the one that manages that wealth." His town will use the
money for tax relief, and others might use it for plowing roads.
3:54:19 PM
CHAIR OLSON asked about feedback from the administration.
SENATOR WILKEN said he has indications that the department is
supportive of the concept. It becomes an issue of money. The
governor had $48 million budgeted, and the bill is $64 million,
but that is the process going on for the next few weeks.
CHAIR OLSON said it sounds like the $48 million was proposed by
the last administration.
SENATOR WILKEN said that is the amount from the year before.
SENATOR KOOKESH moved to report SB 3 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, the motion carried.
The committee took an at-ease from 3:56:00 PM to 3:58:37 PM.
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