Legislature(1999 - 2000)
04/10/2000 01:55 PM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 304-MUNICIPAL DIVIDEND PROGRAM
MR. RITCHIE, AML, stated SB 304 provides permanent stable funding
for municipal revenue sharing, capital matching grants, and the
Village Public Safety Officer (VPSO) program. Mr. Ritchie referred
to graphs given to the committee. The reason for the change in the
municipal revenue sharing formula is that very few municipalities
know why they receive the money that they do. The allocation of
general funds to a municipality causes problems when the
legislature has to appropriate the money. With the new revenue
sharing formula everyone will understand why they are receiving
money and where it is being allocated. The new formula creates an
allocation for roads, similar to what currently exists. Every mile
of road maintained by a municipality would receive $2,000 per mile
and $10 per capita for its use volume.
SB 304 allocates funds for three different services in public
safety. If a municipality provides fire safety, the program would
get $20 per capita served, EMS would get $20 per capita served, and
police would get $20 per capita served. It maintains the existing
formula for hospitals and health facilities. It also provides a
base minimum funding for power services for municipalities and
allocates $45,000 for municipalities. SB 304 allows $10,000 for
unorganized communities; currently they receive $5,000.
The program reached the amount of $85.9 million for fiscal year
2001. The allocation formula transfers money from the excess
earnings of the PFD and is based on $150 multiplied by the number
of people who received dividends the previous year, allowing for a
population sensitive formula.
SB 304 uses the excess Permanent Fund earnings after full dividends
have been paid and after the fund has been fully inflation proofed.
Mr. Ritchie referred to graphs given to the committee. The impact
on the dividend would be negligible for the first five years,
during which time the public would receive, in addition to a PFD,
$150 in a local tax offset per person. This could be an additional
dividend program that could put more money into the pockets of
Alaskans.
CHAIRMAN KELLY explained the Alaska Permanent Fund Corporation
(APFC) has projected amounts for the dividend for the next 10 years
as follows:
2000 - approximately $1,960
2001 - approximately $1,980
2002 - approximately $1,980
2003 - approximately $1,900
2004 - approximately $1,840
2005 - approximately $1,880
2006 - approximately $1,950
2007 - approximately $2,020
The dividend will level off in the year 2007. SB 304 will make an
insignificant change to the growth of the dividend check as
Alaskans know it.
MR. RITCHIE agreed.
SENATOR PHILLIPS asked if SB 304 requires a vote of the people.
MR. RITCHIE answered no.
SENATOR PHILLIPS stated SB 304 will affect everyone so the public
should have the right to vote.
CHAIRMAN KELLY asked what the result will be on property tax owners
throughout the State.
MR. RITCHIE stated SB 304 will provide municipalities with a higher
level of support. Over time, SB 304 will stabilize revenue sharing
and property taxes. Mr. Ritchie referred to a poll taken by
Representative Jeanette James with significant support for SB 304.
SENATOR PHILLIPS stated he would not support SB 304 without an
advisory vote.
Tape 00-04, Side B
MR. DUANE UDLAND, Chief of the Anchorage Police Department, stated
a long-term ability for cities to plan a budget would be
beneficial. Mr. Udland stated support for SB 304.
MS. NADINE HARGESHEIMER, Fairbanks North Star Borough, stated
support for SB 304. SB 304 would create a stabilized funding
source that Fairbanks views as an asset. SB 304 would help all the
service areas around Fairbanks.
MR. LEN MALMQUIST, Fire Chief of Soldotna Fire Department, stated
support for SB 304. Three small volunteer fire departments
adjacent to the Soldotna Fire Department also cooperate, they have
no regular source of funding and SB 304 would provide stability for
them.
MR. SCOTT WALDEN, Assistant Fire Chief for the City of Kenai,
stated support for SB 304.
MR. ADAMS stated support for SB 304 and for a vote of the public.
CHAIRMAN KELLY asked how the funding would be split so both
homerule and municipalities receive funding.
MR. RITCHIE stated it would be divided by the population of those
service areas.
SENATOR PHILLIPS asked Mr. Scott if the Mat-Su Borough would
support a vote for SB 304.
MR. SCOTT stated if the legislature could maintain that the PFD
would stay intact, then there would be no problem with a vote of
the people.
Number 501
MS. LORRAINE DERR, Executive Director of the Alaska State Hospital
& Nursing Home Association, stated SB 304 would create a stabilized
funding base. Ms. Derr stated support for SB 304.
MR. CRAIG DUNCAN, City and Borough of Juneau (CBJ), stated support
for SB 304. CBJ is making budget reductions because of the
continued State shared municipal assistance reductions from last
year. CBJ is trying to make decisions on what budget to reduce.
CBJ doesn't want to see taxes increase, and is concerned that the
10 mill tax cap may pass. SB 304 would help fund education and
emergency services.
CHAIRMAN KELLY stated that because concerns about SB 304 have been
expressed, it will be held in committee.
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