Reinstating revenue sharing tops priorities in legislative requests

Borough sends off wish list

Posted: Tuesday, January 24, 2006

The Kenai Peninsula Borough’s annual appeal for policy changes and capital-project financing has been sent to Juneau, where it is hoped a convergence of election-year politics and surplus oil revenue will combine to show them favor.

Noting the fiscal impact caused by the elimination of the State Revenue Sharing Program, the Capital Matching Grant Program and the Municipal Assistance/Safe Communities Program over the past five years, as well as the rapidly rising costs associated with insurance and employee retirement obligations, the Kenai Peninsula Borough 2006 legislative wish list packet adopted Jan. 17 called on lawmakers to adopt sustainable programs to aid local governments.

Mayor John Williams, along with Assembly President Ron Long, Vice President Pete Sprague and assembly member Milli Martin, of Diamond Ridge, are heading to Juneau this week for face-to-face talks with the borough’s legislative contingent in an effort to push the borough’s priorities.

“First and foremost is this whole issue of community funding,” Williams said Monday. “We have got to get a resolution to help us with the costs — advancing insurance, health care, employee retirement — that have been compounding themselves on us.”

The elimination of revenue sharing, municipal assistance and capital matching grant programs has cost the borough $1.5 million over the past few years, according to the borough. To reverse that, the wish list requests that the state provide immediate relief through a $75 million commitment to a Community Dividend Program or Endowment Program in the upcoming fiscal year 2007 budget. Each city or borough should get a base amount of $75,000, with the rest allocated on a per-capita basis.

Rapidly rising obligations to the Public Employee Retirement System and the Teachers Retirement System (PERS/TRS) are squeezing borough and school district budgets. Those state-mandated increases in employer contributions are expected to cost the borough $3.2 million and the district $12.4 million in fiscal year 2007. By fiscal year 2009, those figures are expected to rise to $4.2 million and $18.7 million, respectively. The borough has asked the state to fully offset the compounded PERS/TRS cost increases of approximately $38 million for fiscal year 2007.

Another critical policy matter for the borough is a fairer allocation formula for state aid to school districts. According to the Kenai Peninsula Borough School District, studies have demonstrated that the district has been getting less than it should since 1984. Over a 10-year period, the inequitable formula has cost the district more than $100 million, according to the 2005 Institute of Social and Economic Research (ISER) Report.

What is needed, borough officials say, is a revamping of the area cost differential, the mechanism by which the state determines what each district will get in state aid each year.

Williams noted the governor’s call for another $565 million for the state’s education account. That could help school districts draw up their own annual budgets.

“I think it’s a great idea,” Williams said.

The borough also has called on the state to live up to its obligations and fully fund the $150,000 Senior Residential (property tax) Exemption Program. That obligation was to reimburse municipalities for the lost revenue stream, something the state ceased doing in 1997, costing the borough an estimated $2.78 million a year since then.

The borough also is seeking funding for several capital projects.

n It has asked for $1 million in state assistance to build and equip eight schools with arsenic removal and water treatment systems in order to comply with new federal and state regulations. The schools involved are Cooper Landing School, McNeil Canyon Elementary School, Nikiski Elementary School, Nikiski Middle-Senior High School, Nikiski North Star Elementary School, Skyview High School, Sterling Elementary School and Tustumena Elementary School.

n The borough wants another $1 million to help fund a computer-aided dispatch system for all four communications centers in the borough, and another $500,000 is needed for acquiring and installing communication equipment for the new Kenai Peninsula Borough Emergency Response Center now under construction in Soldotna.

n The borough’s legislative wish list also includes numerous requests from borough cities and service areas. Williams noted a few, including a water and sewer project for the Ninilchik fairgrounds, a playground at Voznesenka, money for bridge work at Lowell Point and numerous road projects.

“These are real critical capital projects,” he said.

Reached Monday, Rep. Kurt Olson, R-Kenai, said the borough’s policy and funding requests have some chance of success, but it’s too early to say just how well they will fare.

“Obviously, we will see something on PERS and TRS, but it will be tighter than last year,” he said.

As for the school’s area cost differential question, the problem is how to ensure fairness across the state without taking money from Anchorage.

“We’re plugging away at it,” he said.

Municipalities can expect some resumption of a municipal assistance program, but what form it takes is anyone’s guess at this point, he said.

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