Legislature(1997 - 1998)
01/20/1997 01:32 PM Senate CRA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
SB 29 STATE AID TO MUNICIPALITIES & UNORG. BOR.
CHAIRMAN MACKIE called the Senate Community & Regional Affairs
Committee meeting to order at 1:32 p.m. He noted all committee
members were present with the exception of Senator Donley who was
unable to return to Juneau from Anchorage due to inclement weather.
He then brought SB 29 before the committee as the only order of
business.
SENATOR TORGERSON , prime sponsor of SB 29, thanked the chairman for
scheduling the hearing on the bill, which, he said, coincided with
meetings being held in the capital city by the Alaska Municipal
League Board of Directors and the Council of Mayors.
Senator Torgerson said SB 29 is practically identical to SB 20,
which passed both bodies in 1996 but failed to come up for a
concurrence vote on its return from the House to the Senate, with
the exception of omitting nonprofit entities being recognized
corporations of the state of Alaska. He also noted there was a
proposed amendment which would add the word "safe" before the word
"communities" throughout the bill.
Senator Togerson outlined the following elements of SB 29:
- It renames the Municipal Assistance fund to Priority Revenue
Sharing for Municipal Services.
- It requires money received from the Communities Fund be spent on
police protection, fire protection and emergency services, water
and sewer services not offset by user fees, solid waste management,
and other services deemed to be of the highest priority.
- It requires municipalities to list on the notice to taxpayers the
amount received from the Communities Fund.
- It removes the hold harmless provision from the base amount and
allows it to be proportionately reduced in the event of future
reductions in appropriations. He pointed out the hold harmless
provision was the amount that was set aside in 1978 for the 30
percent Business License Tax withheld, and that particular amount
of money has not be prorated since 1979.
- It raises the minimum entitlement to smaller communities to
$40,000. It changes the date of payment so that communities
receive entitlements from both Priority Revenue Sharing and the
Communities Fund on July 31.
Senator Torgerson related that moving the date forward on municipal
assistance payments from February 1, to July 31 has been discussed
extensively with the Department of Revenue, and the department says
there might be as much as $1 million in investment money lost if
that date is moved forward. He suggested the committee may want to
reduce that time limit backwards from the February date.
Number 100
SENATOR PHILLIPS pointed out SB 29 has a Finance Committee
referral, and he suggested the date of payment question should be
addressed in that committee.
Number 120
CHAIRMAN MACKIE invited the representatives of the Alaska Municipal
League and the Council of Mayors to join the committee at the
table.
ROSEMARY HAGEVIG , a member of the City of Borough of Juneau
Assembly serving on the Alaska Municipal League Board of Directors,
said the safe communities bill targets funds for public safety and
health services, and AML believes it will go a long way towards
making neighborhoods safer. She noted that in the past 10 years
municipal assistance and revenue sharing have seen a 70 percent
decrease in funds transmitted from the Legislature back to local
communities, and in the last two years 15 percent of those funds
have been reduced. She added the bill has received a wide range of
support throughout the state.
Number 190
GEORGE WUERCH , a member of the Municipality of Anchorage Assembly
serving on the Alaska Municipal League Board of Directors, said
there are four principal elements to SB 29 that AML has
highlighted, and it is their belief that it takes all four of these
elements to keep the bill in its present consensus form.
AML believes the first concept of the term "safe communities"
conveys one of the commitments to Alaska that the majority of the
10th Legislature has identified when it speaks to safe
neighborhoods. He said the listed priorities in the bill are
essential for building a safe community. One very important
element of the bill is that it is not to be construed that a local
authority would have to meet every requirement.
The second concept is the minimum entitlement to communities being
increased to $40,000, and AML views it is essential that there be
some sense of commitment to continued fair funding to prevent the
development or continuation of dissolutions of local governments.
This will mean the larger communities will have to give up a piece
of their pie to make that $40,000 minimum.
Number 250
JEROME SELBY , Mayor of the Kodiak Island Borough, speaking to the
remaining two principal elements to SB 29, said removal of the hold
harmless clause will ensure that all communities are treated
equally.
Mayor Selby said advancement of the payment date to July 31 will
allow communities to invest some of the money and earn interest on
it, which will help offset what they are taking in terms of a cash
reduction from the actual appropriation. Also, the advancement of
the payment date is important to the really small communities that
have no other funding source and need that money to pay their
monthly bills.
Mayor Selby urged not prorating the $40,000 down and to stabilize
the funding for the program.
Number 291
SENATOR PHILLIPS inquired how many communities are in the $40,000
category, and KEVIN RITCHIE , Executive Director of the Alaska
Municipal League clarified there are 40 communities.
Number 300
JOE MERDY , a members of the Municipality of Anchorage Assembly
serving on the Alaska Municipal League Board of Directors, reminded
the committee the same legislation had overwhelming support last
year, that it is a nonpartisan issue, and the main purpose is to
stabilize funding so that the taxpayers don't have to eat the cost
of any more cuts. He emphasized the need to find a way of helping
the small communities so that they do not continue to dissolve, and
he urged passage of SB 20.
Number 318
MS. HAGEVIG thanked the committee for making the opportunity
available to the Alaska Municipal League and the Council of Mayors
to appear before the committee to testify on SB 29.
Number 320
CHAIRMAN MACKIE asked what population number was used to define a
small community. MR. SELBY responded it wasn't based on a
population criteria. It was based on a formula of how much funding
they were going to receive under the program.
Number 335
CHAIRMAN MACKIE directed attention to Senator Torgerson's amendment
and asked for a motion for its adoption.
SENATOR PHILLIPS moved adoption of the following Amendment No. 1:
Amendment No. 1
Page 2, line 15: Following "FOR" insert "SAFE"
Page 3, line 2: Following "FOR" insert "SAFE"
Page 4, line 19: Following "Sec. 29.60.350." delete "Communities"
and insert "Safe communities"
Page 4, line 20: Following "for" insert "safe"
Page 4, line 21: Following "department the" insert "safe"
Page 4, line 23: Following "the" insert "safe"
Page 4, line 29: Following "the" insert "safe"
Page 5, line 3: Following "the" insert "safe"
Page 5, line 9: Following "for" insert "safe"
Page 6, line 9: Following "the" insert "safe"
Page 6, line 31: Following "the" insert "safe"
Page 7, line 17: Following "to the" insert "safe"
Hearing no objection to Senator Phillips' motion, the Chairman
stated the amendment was adopted and would be incorporated into a
C&RA committee substitute.
Number 350
LAMAR COTTEN , Deputy Commissioner, Department of Community &
Regional Affairs, noted Bill Rolfzen, who has run the department's
program for municipal assistance and revenue sharing, was present
to respond to questions from committee members.
Mr. Cotten stated the department supports the bill conceptually.
The department does not object to the movement of the date, but he
cautioned that each month the date is moved up it costs roughly
$160,000, and it is an issue that should be put on the table. The
department's only concern is the $40,000 minimum with respect to
future cuts. DCRA's position is that the $40,000 should be a
cutoff, that if there are cuts, the amount of money to go to the
smaller communities would go no lower than $40,000. He pointed out
these smaller communities are not afforded the same ability to tax
as other communities.
Number 415
There being no further testimony on SB 29, CHAIRMAN MACKIE stated
it was his intention to move the bill out of committee.
SENATOR PHILLIPS moved CSSB 29(CRA) be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
There being no further business to come before the committee, the
meeting was adjourned at 2:02 p.m.
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