Legislature(1997 - 1998)
02/26/1997 08:05 AM House CRA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
February 26, 1997
8:05 a.m.
MEMBERS PRESENT
Representative Ivan Ivan, Chairman
Representative Fred Dyson
Representative Scott Ogan
Representative Joe Ryan
Representative Jerry Sanders
Representative Al Kookesh
Representative Reggie Joule
MEMBERS ABSENT
No Members Absent
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 29(FIN)
"An Act relating to certain programs of state aid to municipalities
and recipients in the unorganized borough; and providing for an
effective date."
- HCSCSSB 29(CRA) MOVED OUT OF COMMITTEE
(* First public hearing)
PREVIOUS ACTION
BILL: SB 29
SHORT TITLE: STATE AID TO MUNICIPALITIES & UNORG. BOR.
BILL VERSION: CSSB 29(FIN)
SPONSOR(S): SENATOR(S) TORGERSON,Mackie
JRN-DATE JRN-PG ACTION
01/03/97 22 (S) PREFILE RELEASED 1/3/97
01/13/97 22 (S) READ THE FIRST TIME - REFERRAL(S)
01/13/97 22 (S) CRA, FIN
01/20/97 (S) CRA AT 1:30 PM BUTROVICH ROOM 205
01/20/97 (S) MINUTE(CRA)
01/21/97 100 (S) CRA RPT CS 3DP 1NR SAME TITLE
01/21/97 100 (S) DP: MACKIE, WILKEN, HOFFMAN
01/21/97 100 (S) NR: PHILLIPS
01/21/97 100 (S) FISCAL NOTE TO SB & CS (REV)
01/22/97 109 (S) COSPONSOR: MACKIE
01/31/97 (S) FIN AT 9:00 AM SENATE FINANCE 532
02/05/97 (S) FIN AT 9:00 AM SENATE FINANCE 532
02/06/97 248 (S) FIN RPT CS 4DP 2NR 1AM SAME TITLE
02/06/97 248 (S) DP: PEARCE, SHARP, TORGERSON, DONLEY
02/06/97 248 (S) NR: PHILLIPS, ADAMS; AM: PARNELL
02/06/97 248 (S) FISCAL NOTE TO CS (S.FIN)
02/11/97 (S) MINUTE(RLS)
02/12/97 307 (S) RULES TO CALENDAR 2/12/97
02/12/97 312 (S) READ THE SECOND TIME
02/12/97 312 (S) FIN CS ADOPTED UNAN CONSENT
02/12/97 312 (S) AM NO 1 OFFERED BY ADAMS
02/12/97 312 (S) AM NO 1 FAILED Y5 N14 E1
02/12/97 313 (S) ADVANCED TO THIRD READING UNAN CONSENT
02/12/97 313 (S) READ THE THIRD TIME CSSB 29(FIN)
02/12/97 313 (S) PASSED Y17 N2 E1
02/12/97 313 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
02/12/97 313 (S) ADAMS NOTICE OF RECONSIDERATION
02/13/97 339 (S) RECON TAKEN UP - IN THIRD READING
02/13/97 340 (S) PASSED ON RECONSIDERATION Y17 N1 E2
02/13/97 340 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
02/13/97 341 (S) TRANSMITTED TO (H)
02/14/97 354 (H) READ THE FIRST TIME - REFERRAL(S)
02/14/97 354 (H) CRA, FINANCE
02/24/97 (H) CRA AT 8:00 AM CAPITOL 124
02/24/97 (H) MINUTE(CRA)
02/26/97 (H) CRA AT 8:00 AM CAPITOL 124
WITNESS REGISTER
SENATOR JOHN TORGERSON
Alaska State Legislature
State Capitol, Room 514
Juneau, Alaska 99801
Telephone: (907) 465-2828
POSITION STATEMENT: Sponsor of SB 29
GEORGE WUERCH, Chairman
Legislative Committee
Alaska Municipal League
1332 Crescent Avenue
Anchorage, Alaska 99508
Telephone: (907) 563-2737
POSITION STATEMENT: Testified on SB 29
KEVIN RITCHIE, Executive Director
Alaska Municipal League
217 Second Street
Juneau, Alaska 99801
Telephone: (907) 586-1325
POSITION STATEMENT: Testified on SB 29
CAROLYN FLOYD, President
Alaska Conference of Mayors
Mayor, City of Kodiak
P.O. Box 1397
Kodiak, Alaska 99615
Telephone: (907) 486-8635
POSITION STATEMENT: Testified on SB 29
JEROME SELBY, Mayor
City of Kodiak
710 Mill Bay Road
Kodiak, Alaska 99615
Telephone: (907) 486-9301
POSITION STATEMENT: Testified on SB 29
LAMAR COTTON, Deputy Commissioner
Department of Community and
Regional Affairs
P.O. Box 112100
Juneau, Alaska 99811-2100
Telephone: (907) 465-4700
POSITION STATEMENT: Testified on SB 29
ACTION NARRATIVE
TAPE 97-11, SIDE A
Number 014
CHAIRMAN IVAN IVAN called the House Community and Regional Affairs
Standing Committee meeting to order at 8:05 a.m. Members present
at the call to order were Representatives Dyson, Ogan, Sanders and
Kookesh. Representatives Ryan and Joule arrived at their
respective times: 8:06 a.m. and 8:07 a.m.
CSSB 29(FIN) - STATE AID TO MUNICIPALITIES & UNORG. BOR.
Number 128
CHAIRMAN IVAN indicated that the committee would address CSSB
29(FIN), "An Act relating to certain programs of state aid to
municipalities and recipients in the unorganized borough; and
providing for an effective date."
SENATOR JOHN TORGERSON came forward to testify on CSSB 29(FIN) as
sponsor to this legislation. He stated that this was not a new
piece of legislation. It passed both the Senate and the House last
year in the form of SB 20. It came back to the Senate for
concurrence and time ran out due to the end of session. This bill
has received broad based support from both bodies. He then read
the sponsor statement into the record.
"This legislation changes the name of the Revenue Sharing program
to 'Priority Revenue Sharing for Municipal Services,' changes the
Municipal Assistance Fund to the Safe Communities Fund and requires
that payments from the Safe Communities Fund be used for
prioritized purposes. These prioritized purposes are: (1) Police
protection; (2) Fire protection and emergency medical services; (3)
Water and sewer not offset by user fees; (4) Solid waste
management; and (5) Other services the governing body determines to
have the higher priority.
"Communities that receive this fund must now put in their notice to
the tax payers the amount of money that's coming from the Safe
Communities Fund. This bill also revises how appropriations to the
Safe Communities Fund are allocated. In the event appropriations
continue to be reduced, allocations to, and the resulting payments
from, the base account will be reduced proportionately to all
communities. In the past, this account was 'held harmless' and
appropriation reductions were taken entirely from the per capita
account. This resulted in an inequitable reduction of payments to
communities.
"This bill also increases the minimum entitlement to $40,000. This
is basically the amount of money that goes to the smaller
communities, the amount in the past was $25,000 and this basically
shows the commitment from the state to these communities of what it
would cost to operate a small government. These appropriations of
$40,000 are reduced downwards as have been done with other
communities in the past."
SENATOR TORGERSON continued that Revenue Sharing and Municipal
Assistance has two different payment dates from the department, one
being, July 30, and the other February 1. This moves the date of
February 1, back to July 31, to make one payment which is why there
is a relatively large fiscal note that shows a loss of interest
from the CBR moving almost $30 million up six months.
Number 402
REPRESENTATIVE FRED DYSON asked who the net losers would be with
this redistribution of the funds.
SENATOR TORGERSON stated that the only part that they're losing is
to bring the $25,000 up to $40,000. All of the communities
participate in this to some degree, depending on the amount of
money they receive. Anchorage receives the largest payment because
it's the largest community, plus, they put in the majority of the
money along with some of the other larger communities. The amount
of money it takes for them to transition to the $40,000 is about
$210,000. To offset this expense they've moved the payment back
and they're taking a guess that if these communities had this
additional money moved up for six months and they invested this in
their investment pools, they would make an amount of money equal to
or a little greater than the amount of the transition.
SENATOR TORGERSON noted that the long answer is that nobody loses
if they make this assumption about investing the money. If they
spend the money right away then it's a different story. He noted
that there are well over 100 municipalities that have agreed to
this bill and it's been in the making for many years on how to
transition this money and how to accomplish all the goals the
legislation attempts. He didn't know of any communities in the
Revenue Sharing Program that oppose this legislation.
Number 595
REPRESENTATIVE REGGIE JOULE asked for clarification of how this
bill differed from the one proposed last year and asked
specifically about Section (b) on page seven that reduces the
amount to the smaller communities.
SENATOR TORGERSON responded that Section (b) clarifies language in
Section 13. He stated that it was always the intent of this
legislation to reduce this payment to all communities equally.
There wasn't a fair distribution of this as to how reductions were
made unless this bill passes. The language that was originally in
the bill under Section 13 was basically the same as subparagraph
(a) and speaks to payments reduced as the entitlement is reduced.
He had the department make a run on what this actually did with a
ten percent reduction. Instead of reducing the minimum entitlement
from $40,000 to $36,000, this actually reduced the minimum
entitlement from $40,000 down to approximately $39,600. He noted
that this was like a one one-hundredth of a percent reduction
instead of a ten percent reduction. This was clearly not what
Section 13 meant, it meant that they would share in reductions
equally.
Number 733
REPRESENTATIVE JOE RYAN stated that in his experience with revenue
sharing is that it was used for road service and fire service
areas. He asked if this was still the case.
SENATOR TORGERSON responded that within this legislation, under a
section which escaped him, they can spend this money on anything
they want that has a high priority. He noted that there are
certain provisions that give formulas for services performed such
as roads, etc.
REPRESENTATIVE RYAN stated that there was an arcane system which
the administration used to appropriate special monies for larger
municipalities and then Department of Community and Regional
Affairs has a companion system for the smaller communities. He
noted that when the smaller communities percentages are bumped up,
the larger communities loose a proportionate percentage.
SENATOR TORGERSON responded that this was the purpose of the
present legislation. This is actually revenue neutral in regards
to general fund monies. They are taking the money that it costs to
transition from the $25,000 to the $40,000 which basically comes
out of all communities. The intent of Section 13 is that after
bringing the fund up to $40,000, if there are further reductions,
they would share these reductions equally. He noted previously the
brunt of the reductions would come out of the larger communities.
Number 947
REPRESENTATIVE JOULE asked what drove this pot of money, what
generated this program. He asked how this amount was set and what
determines it. Under what circumstances would this amount
decrease?
SENATOR TORGERSON responded that oil revenues funded this program
and noted that this fund was subject to appropriations through the
operating budget. If there is a ten percent reduction,
theoretically all programs receive a ten percent reduction.
Number 1040
GEORGE WUERCH, Chairman, Legislative Committee, Alaska Municipal
League, testified via teleconference from Anchorage on SB 29. He
outlined for the committee that they would present a three part
presentation beginning with Executive Director, Kevin Ritchie in
Juneau.
Number 1094
KEVIN RITCHIE, Staff Director, Alaska Municipal League came forward
to present testimony regarding SB 29. He initially gave some
background on the Safe Communities bill. The Safe Communities bill
is not only the name of the bill, but also the most important goal
that both state and municipal governments share which is making our
communities better and safer. He referred to a visual graph to
show the committee how the state and municipalities work together
towards this goal.
MR. RITCHIE stated that the graph was a representation of
consolidated state and local government revenues including the
revenues from municipalities collected through taxes and fees, and
also the revenues from oil. In essence, what it takes to deliver
services to the people of the State of Alaska, both municipal and
state government, about half of the money comes from oil revenues.
Seventeen percent of the money it takes to run state government
comes from local taxes, essentially through sales and property
taxes. Another 17 percent of what it takes to provide government
services comes from fees and charges primarily charged by municipal
governments. The biggest items would be water and sewer charges,
fees for airports, etc. Seven percent comes from other state fees
and taxes. Obviously oil revenue is the largest revenue for the
state.
MR. RITCHIE then referred to a second chart which reflected what
municipalities do exactly. Thirty-three percent of municipal
budgets goes to education which is a major factor in the state
budget. Twenty-eight percent goes to infrastructure development in
municipalities, including bonding for public improvements and other
types of services. Some of the other major categories are
transportation, health and public services, utilities and public
safety activities. These trends are characteristic of all
municipalities. The Safe Communities bill addresses both small and
large municipalities. Of the 82 smallest communities in the state,
they were able to get figures from the Department of Community and
Regional Affairs. Approximately two-thirds of all of these small
municipalities provide for road maintenance, health services, water
and sewer, police services, etc. One-third of these communities
have garbage or land fills and also expend money for fire fighting.
The type of services present in the larger communities also exist
in the small communities as well.
MR. RITCHIE noted that the point they wished to make was that the
Alaska Municipal League and the state of Alaska are partners in
providing services to the people of Alaska. When a tax is charged
either on a local level or on the state level, obviously, the same
people pay the freight for this. Part of the reasoning behind the
Safe Communities bill is to give tax payers in municipalities
somewhat of a share of the oil revenues which the state has. Many
areas of the state have experienced very rapid growth and property
tax over the past ten years and he referred to a chart in the
committee's packets which shows a relationship between tax
increases and municipal assistance and revenue sharing.
Number 1351
MR. WUERCH stated that he was accompanied by the President of the
Alaska Municipal League, Rosemary Hagevig in Anchorage. Mr. Wuerch
is also an assembly member in Anchorage. He spoke very briefly to
why they were asking the committee to support this legislation and
noted how this would be the closest they would see to a consensus
bill this session. This does have broad base support.
MR. WUERCH continued that during the campaign season AML sent out
a survey to candidates and found very broad base support for this
legislation. Seventy-eight percent of the candidates said they
would support this type of legislation and eighty-nine percent of
them said that the state should be concerned about its budget
actions regarding local state taxes and services. They also
supported stabilizing the funding for municipal revenue sharing.
MR. WUERCH stated that the Safe Community bill targets use of funds
for the most basic public safety and health services enumerated in
the bill itself. This legislation makes everybody's neighborhoods
safe. He referred to a chart in their packets reflecting a ten
year trend entitled, "Comparison of State Operating Budge vs. State
Revenue Sharing/Municipal Assistance Funding, FY 1985 - FY 1997."
He referred to this as the "ski-jump chart." It shows one line
that rapidly descends to the right, another line above it is
relatively flat. He regretted to say that it's the revenue sharing
that has dropped nearly seventy percent over this time frame while
the state operating budget has stayed relatively flat.
Number 1444
MR. WUERCH further explained the impact of this trend by
referencing the next chart, entitled, "Comparison of Decreases in
Municipal Assistance/Revenue Sharing vs Increases in Municipal
Sales & Property Taxes." This chart reflects a continuing increase
in municipal sales and property taxes which local jurisdictions
have had to adopt in order to make up for the decreases in
reductions in state provided municipal assistance and revenue
sharing. He pointed out that these trends are very adverse to safe
local communities and they hoped the committee would support them
in these efforts. Lastly he noted the Municipal League has a broad
base support of all of their nearly 134 members in adopting this
model.
MR. WUERCH closed by saying that there are four fundamental legs
which this bill provides. One, this legislation clearly sets out
that the fund will be called the Safe Community Fund and spells out
the priorities that these kinds of dollars should be spent on,
basic public safety and health services. Secondly, it creates a
minimum floor at the on-set for a small community. He noted the
conversation between Representative Dyson and Senator Torgerson
about "net losers," and quoted Senator Torgerson as having said,
"you take a little over $200,000 from the larger communities and
you reallocate that to the smallest of the communities to make sure
everybody has the minimum floor on year one of $40,000. The larger
communities can make up that off-set by investing the funds early
in the year and retaining the interest." He stated that this was
an intriguing opportunity as a legislature because the revenue
stream from early investment does not appear as a cost on their
appropriations. This revenue stream can defer to the local
communities and make this minimum possible. He stated that this
was the heart and basis of their broad based consensus that on year
one they start with $40,000 for the smallest communities and have
the early payment.
MR. WUERCH referenced leg number three, the hold harmless clause
which outlines that everyone shares in any future cuts, as well as
in future gains. Lastly, by advancing the payment dates from the
old municipal assistance paid on February 1, to July 31, all of the
monies would then go to the local government on July 31 and
communities could either wisely manage this cash flow by avoiding
interest payments on bills due or investing them for dividends
earned.
Number 1665
CAROLYN FLOYD, Mayor, Kodiak; President of Alaska Conference of
Mayors; Member, Board of Directors, Alaska Municipal League,
testified via teleconference from Kodiak on SB 29. She stated that
Mayor Jerome Selby was also present with her in Kodiak. The Alaska
Conference of Mayors and the AML represents 135 municipalities
across the state. They also represent approximately 97 percent of
the citizens of Alaska. They've been working on this bill and urge
the committee to adopt SB 29.
MAYOR FLOYD stated that both the Conference of Mayors and the AML
are consensus organizations. In the case of Senate Bill 29 the
active support of all of their members was achieved by carefully
balancing the interests of their members from the largest to the
smallest communities. They've been concerned about this and have
worked hard on it. SB 29 is truly balanced and benefits all of the
people. She noted that both the legislature and the municipalities
have made strong commitments to creating safe communities and
developing strong local economies. They believe that SB 29 is an
important component in both of these efforts.
Number 1737
MAYOR FLOYD noted that the title "Safe Communities" of this
legislation accurately describes how communities use their revenue
sharing fund. During the last ten years, municipal revenue sharing
has been cut nearly 70 percent. Almost every community has faced
significant reductions in services simply to keep living within
their means. Having safe communities is the number one goal of
Alaska's cities and boroughs. Secondly, SB 29 is designed to
create a program that will serve Alaska for many years.
Communities are Alaska's basic economic building block. If new
businesses are to be attracted and expansion of existing businesses
encouraged, local taxes must be stabilized on businesses and on
individuals. This cannot be done unless municipal revenue sharing
is stabilized as well as basic other services such as education.
Number 1824
REPRESENTATIVE RYAN said his only concern was with the road service
areas with contributed mill rates with portions of money from the
state used to off-set for road maintenance. He wanted to make sure
this service would be maintained under this legislation.
MR. RITCHIE referred to the third page of a handout and explained
that the state revenue program would basically be untouched by this
bill. All of the mechanisms that were in place, including separate
entitlements for roads, would remain in place as it was. The area
which this legislation primarily affects is the municipal
assistance side. It further targets the money. Instead of getting
a distribution into the general fund, the "safe communities" bill
prioritizes the use of funds for public safety, fire, health, etc.
Number 1915
REPRESENTATIVE DYSON referred to the income stream depicted on a
chart. He noted that there was no federal component reflected. He
asked if this was part of other state revenues as indicated, "a ten
percent price lot there, that..."
MR. RITCHIE responded, yes.
REPRESENTATIVE DYSON then noted that on page seven of a handout,
the upper portion entitled, "Increase in Municipal Sales and
Property Taxes." He stated that if he's reading this correctly,
it's gone down precipitously in this last year, but his guess was
this was not true.
MR. RITCHIE stated that this chart was inaccurate in that when they
reproduced it they didn't have the figure for this year, but there
has been no decline. The figures for this past year went up about
five percent over the past year. The Department of Community and
Regional Affairs puts out an annual tally of the total property and
sales tax collected by municipalities.
Number 1978
JEROME SELBY, Mayor, City of Kodiak, testified via teleconference
from Kodiak on SB 29. He spoke to the state of the municipalities
statewide. It gave him no pleasure to say that municipalities are
not in great shape. This bill is desperately needed to bring
stability to the communities. He noted the six villages within the
Kodiak Island Borough. Four of them are in deep financial trouble
which simply has everything to do with the 70 percent reduction in
municipal assistance and revenue sharing over the last ten years.
He noted that this is why the minimum entitlement within this
legislation is so critical. They've studied very hard to come up
with a minimum amount that it takes to "keep the doors open, pay
the light bill, pay the heat bill, have a part-time clerk who can
answer the mail, answer the telephone, occasionally maybe even plow
a road and hopefully be able to fix the sewer system when it
breaks." The figure they came up with to do this is $40,000.
Number 2070
MAYOR SELBY noted that several communities have dissolved over the
last two or three years. Several others are on the verge and
seriously considering this option. The communities need the
legislature's help. The governor has proposed another two and 1/2
percent cut to their funding for this next fiscal year. He asked
the committee not to honor this cut. He asked them to level fund
these communities for FY 97 to FY 98 because this is the other
critical piece, in addition to this bill, that they're considering
to bring stability to the small communities. Fifty to sixty
percent of the communities in the state of Alaska are heavily
dependent upon these two things happening, the legislature adopting
this bill and to stop the hemorrhage of the seventy percent cuts
they've had over the last ten years to stabilize their funding so
they can stay in business, to focus on developing Alaska for the
people who live here, rather than just survive.
Number 2157
LAMAR COTTON, Deputy Commissioner, Department of Community and
Regional Affairs came forward to testify on SB 29. He stated that
he concurs with comments made by the sponsor and the Alaska
Municipal League. He noted that all the parties involved have
worked for about three or four years on this legislation and he
mentioned the diverse characteristics of the communities to
consider. This legislation is very complex and they recognize that
it's not perfect. He stated there were enough positive components
to go ahead with it. The idea of some base of $40,000 is an
improvement over what's in place presently.
MR. COTTON referred to the "hold harmless" clause and said he felt
it clearly discriminated against communities that didn't have a
business tax in place or a small business tax in place back in 1978
when this was "the year" this legislation was based on. This is
1997 and he noted some of the changes which have taken place since
then. Initially, the Administration had some heartburn about this
early date, but stated that this was part of a broader package to
make this work. In short, the Administration does support the
bill. It does help communities whether large or small. It's a
good example of the state and cities working together in order to
transition from less state money.
Number 2266
REPRESENTATIVE DYSON asked Mr. Wuerch about the municipality of
Anchorage not having a net loss with this bill. He asked if this
was Mr. Wuerch's understanding.
MR. WUERCH responded that yes this was and he assured him that both
the Mayor and the Assembly support this legislation. The way this
is possible is by early funding. This does take them from the
negatives of shifting money to the small communities into the black
again by the benefits of investing this money in the projected five
and 1/4 percent interest for six months to come up with this
balancing. This would put them in the black at year one.
REPRESENTATIVE DYSON asked that if, in the unlikely situation of
the entire appropriation being decreased, if there was a mechanism
that takes the $40,000 minimum down proportionately as well.
SENATOR TORGERSON pointed out that this was what Representative
Joule spoke about in Section 13 of the bill. He said it was always
the intent that the municipalities would share in the reductions
equally.
Number 2349
CHAIRMAN IVAN offered amendment number O-LS0218\B.1 which read as
follows:
Page 7, line 16:
Delete "$29,402,300"
Insert "the amount appropriated to the fund for fiscal year
1998"
Page 7, line 18:
Delete "$29,402,300"
Insert "the amount appropriated to the fund for fiscal year
1998"
REPRESENTATIVE OGAN objected for discussion purposes.
Number 2380
CHAIRMAN IVAN stated that this amendment deletes the specific
amount for minimum entitlements and inserts the amount appropriated
for fiscal year 1998. This amendment assures the minimum
entitlement of $40,000 for at least the first year of the program.
In future years, if the amount appropriated is less than the fiscal
year 1998 appropriations, fundings to small municipalities would be
made on a prorata basis. If the amount appropriated equals what is
in the bill for fiscal year 1998, then the amendment becomes a moot
point. He wanted to make sure that small communities receive a
minimum entitlement for at least the first year of the program.
TAPE 97-11, SIDE B
Number 008
SENATOR TORGERSON noted that this amendment outlined that whatever
the reductions would be in revenue sharing this year, these
communities that are the minimum entitlement communities would be
held harmless from these reductions. This amendment was offered on
the Senate side and he opposed it then, as now, since he doesn't
know what this amount of reduction will be. This is a fragile
document. It took a lot of work to get consensus from everyone.
There are no communities which are opposed to this. He noted that
if they want to begin to hold harmless certain groups from this,
then they are going to have problems maintaining this consensus.
It's unfortunate that they go to $40,000 this year when there might
be a reduction in the same year. The governor has proposed a
reduction of two and 1/2 percent. This is an unfortunate
circumstance to this bill.
SENATOR TORGERSON stated that this legislation does bring the
communities up to $40,000. What the amendment would do is
guarantee communities $40,000 regardless of appropriation levels.
Number 058
REPRESENTATIVE OGAN asked what the total cost of this amendment
would be.
SENATOR TORGERSON stated that the department estimated about
$50,000 at the two and 1/2 percent reduction. He's heard anything
from zero to 20 percent reductions. He has no idea what these will
be. This amendment essentially asks the larger communities to be
held harmless and pay this amount. He said he can't support doing
this.
Number 103
MR. WUERCH spoke to the amendment. The AML believes that the
$40,000 starting point in the year one was the basis of their
consensus with their membership. They do support this amendment
because it updates the agreements that were reached, the consensus
last year to the same set of conditions as a consensus this year.
Senator Torgerson is right to say that this is an ever moving
target, but they believe that it's their responsibility to
represent to the committee the agreements reached with their
membership, which is that on year one, whatever that year is, there
is a $40,000 floor.
Number 139
REPRESENTATIVE RYAN noted that his concern is that if there has to
be a substantial reduction in revenue sharing and municipal
assistance because of budget priorities and constraints, he asked
then if the Municipality of Anchorage is willing to take a rather
fair hit and be gracious enough to give this money to the smaller
communities. He asked how this would affect potential mill rates
in his own municipality.
MR. WUERCH stated that the short answer is, that they have bought
into this concept, but the longer answer is that they really have
to look at what the consequences of not having this agreement are.
The consequences are, that if a severe reduction does come, they
face an ever increasing trend to dissolve local governments in the
rural areas. Once this happens, this loss has to be made up by the
state legislature because that's how they operate. In the absence
of local government, the state steps in. This would be doubling
the pressure on the cuts for Anchorage. In Anchorage's self-
interest it's important to keep local governments alive and healthy
in the smaller communities so that there isn't an even bigger bite
out of the apple, leaving them just the core.
Number 219
REPRESENTATIVE OGAN maintained his objection. A roll call vote was
taken. Representatives Ogan, Sanders and Ryan objected to
amendment O-LS0218\B.1. Representatives Kookesh, Joule, Dyson and
Ivan voted in favor of this amendment. This amendment O-LS0218\B.1
was adopted.
REPRESENTATIVE OGAN moved and asked unanimous consent to move CSSB
29 (FIN) as amended out of committee with individual
recommendations and accompanying zero fiscal note. Hearing no
objection, HCSCSSB 29 (CRA) was moved out of the House Community
and Regional Affairs Committee.
Number 253
ADJOURNMENT
CHAIRMAN IVAN adjourned the meeting at 8:59 a.m.
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