Legislature(2001 - 2002)
02/27/2002 01:33 PM Senate CRA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
SB 323-MANDATORY INCORPORATION OF BOROUGHS
SENATOR GARY WILKEN sponsor of SB 323 read the following sponsor
statement into the record:
The Mandatory Borough Act of 2002 recognizes that there
are six regions in Alaska that meet most, if not all,
the standards for borough incorporation, and sets in
motion a procedure to create six new boroughs by
January 1, 2005. The identified areas have the
financial capability and stable populations needed to
provide a local government with the power to plan,
support local schools, and levy and collect taxes.
Senate Bill 323 allows the residents in the identified
six locations to initiate borough incorporation
proposals, hold extensive public hearings, and work
closely with the Local Boundary Commission to determine
the desired borough structure until the January 1, 2005
deadline. However, if a borough is not incorporated
within each of the six regions by the stated timeframe,
the following areas will be incorporated as second-
class boroughs:
Copper River Basin Region
Glacier Bay Region
Prince of Wales Island Region
Prince William Sound Region
Upper Tanana Basin Region
Wrangell/Petersburg Region
Through the formation of these six boroughs, local
residents, many for the first time, will be able to
financially support their neighborhood schools. In
addition, several school districts will be consolidated
to enhance efficiencies and economies of scale.
Alaska's K-12 public education system will benefit from
the additional financial help and thus Alaska's
students will benefit.
The best government is the government closest to the
people. Senate Bill 323 continues what the framers of
the Alaska State Constitution commenced over forty
years ago, and by forming these six boroughs, it
provides a way for local area residents to help with
their children's education.
I respectfully request your consideration and support
for this legislation.
SENATOR WILKEN called member's attention to the chart in their
packets titled, "Standards for Borough Incorporation." [A copy of
the chart is available in the committee file.] The chart lists 11
standards that need to be met for borough incorporation and he
believes the six areas have already fulfilled 9 of those
standards. The process that starts with the committee meeting
will answer the questions regarding the final two standards,
which are "Financial/Human Resources" and "Similar Geography."
Next he noted the "Model Borough Boundaries" pamphlet found in
committee packets. Maps of the six areas referred to above are
shown with current Rural Education Attendance Area (REAA)
Boundaries and the model or proposed boundaries. [A copy of the
pamphlet can be found in the bill file.]
For a year he has been asking the unorganized area whether they
can help with K-12 education thereby relieving some of the burden
placed on organized Alaska. Three areas of the state have stepped
forward to do just that, but many areas of the state have chosen
to ignore his request. This legislation asks those areas why they
can't help. Given the amount of data available, he believes there
is no reason not to start the process to analyze whether these
six areas have the capability and capacity for government.
He asked members to examine the State of Alaska Local Boundary
Commission January 2001 booklet titled, "The Need to Reform State
Laws Concerning Borough Incorporation and Annexation." [A copy
can be found in the bill file.] In particular, he asked members
to read pages 7-20 then refer to page 10 and match the seven
bulleted paragraphs to the appendix. It says that since 1963
Alaska has grown in population and wealth and it is time to
revisit the idea of incorporations of local government and bring
back the concept that the best government is the one that is
closest to the people.
According to their annual publication, the Alaska Municipal
League supports this concept and each year the Local Boundary
Commission issues a report that talks about organization of
unincorporated areas and how the Legislature might be able to
eliminate some of the disincentives of incorporation and bring
government close to the people.
He closed by saying this is the start of a very important piece
of legislation and his office is ready to work on it and discuss
it with all people that are affected.
SENATOR PHILLIPS said there is another way of accomplishing the
same thing. Instead of passing bills, the Legislature can sit in
joint session and act as the Assembly for the unorganized areas.
Because this bill has several more committees of referral and it
might not pass, he asked whether they shouldn't pursue this other
avenue.
SENATOR WILKEN thought that was a good question, but his approach
has been to have the patience to do the work correctly.
Obviously, there are areas of the state that have the capacity to
fund education and have a minimal second-class borough level of
government whereby they are able to choose the degree to which it
affects the population. This hasn't worked very well so this is
another step. His problem with the full Legislature sitting as
the Assembly is that it doesn't recognize the capacity of
different areas of the state and is therefore an unfair approach.
He isn't after those areas that aren't able to support
government, rather he wants those areas that are capable of
helping themselves to step forward and help themselves. It's
better to take a reasoned analysis, through the parts of the law
that says, "Can you help yourselves?" That is what this bill
suggests.
SENATOR LINCOLN informed Senator Wilken that the individuals in
her district don't necessarily feel that having a borough
actually creates a government that is closer to them and would
therefore change how they do business in their area. She keeps
hearing people ask, "How are we going to pay for that?" When she
looks at some of the six target areas she doesn't see how they
can afford government. There is an ongoing discussion, and she
has confidence that the people will create new boroughs when they
feel they have the economy to support one. She doesn't want to
say, "You shall…" because that isn't necessarily the best form of
government either.
With talk of budgetary cuts and considering the current fiscal
gap, she asked how the cost of the bill could be justified.
SENATOR WILKEN replied the concept of saying, "You shall…" is not
quite correct. There are 11 standards in law that an area must
qualify under in order to become a borough. Few people would ever
vote to become a borough but he believes that borough
incorporation has increased the quality of life in the state. He
knows Interior Alaska is better off with the Fairbanks North Star
Borough than without because "Overall, 84% of the people have
benefited by borough incorporation."
The push for incorporation began with education reform. In his
area, they ask the people for a 4-mil tax equivalent so they can
get education dollars from the state. This year the people in
organized Alaska are paying $154 million to have the benefit of
incoming state money for their education. Because unorganized
Alaska is paying nothing, he can safely say the people he
represents are subsidizing education in the unorganized areas of
Alaska. This is acceptable for those areas that are not able to
pay, but it is not acceptable for those areas that can pay but
won't.
The fiscal note is not important when you consider that this has
more than a one or two year focus. It is a generation issue that
will, over time, improve certain unorganized areas in the state
just as it has in the North Star Borough.
SENATOR LINCOLN had difficulty with the criteria used and took
issue with the term "mandatory" that was used in the title. She
said there was a resources meeting the previous day that
discussed mining and approximately 90 percent of the presenters
presented the development of resources in Bush Alaska. That is a
form of payment for services to education and other state
programs. The statement that they aren't paying anything is in
error.
SENATOR WILKEN disagreed that the resources in a particular area
belong to the people that live in that area. He believes that the
resources in the state are the property of all the people of
Alaska. That the resources come from a particular area provides
no claim to that area of the state when you're talking about a
local contribution to match people that are paying a property
tax.
Areas that are not incorporated by 2005 will then be incorporated
as second class boroughs under this Act but they must first come
before the Legislature and they must also satisfy the best
interest standard. "It is top down, but it brings people to the
table to talk about what is in their best interest and today,
that is very difficult to do."
CHAIRMAN TORGERSON asked whether he thought he could accomplish
this by 2005.
SENATOR WILKEN said he doesn't know. He's comfortable with the
fact that it will take time. It's important to get the process
started.
CHAIRMAN TORGERSON said his point goes to ensure that due
diligence is done before the deadline.
There was no further testimony.
The bill was held in committee.
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