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Lawmakers divert millions from Bush Alaska to larger communities

Posted: Thursday, July 10, 2003

JUNEAU (AP) A Murkowski administration proposal to parcel out $14.7 million in one-time federal funds to local communities was dramatically changed by a legislative committee on Wednesday.

The Legislative Budget and Audit Committee voted to take nearly $3 million from Bush communities and give to generally larger communities that stood to lose under a proposed formula.

Lawmakers who supported spending more on urban communities argued it was a more fair way to divide the money.

Sen. Gary Wilken, R-Fairbanks, said under the formula proposed by the administration, the city of Fairbanks and Fairbanks North Star Borough stood to lose about $420,000.

Wilken argued the formula, which was based on what communities received in this past fiscal year, was arbitrary and that larger communities should not sacrifice funding for the benefit of smaller ones.

Opponents of the plan argued that smaller villages and cities will be disproportionately hurt because they don't have the ability to raise their own revenues to replace the lost funding.

Some smaller communities lack water, sewer and electricity and may not be able to remain solvent when faced with cuts in state support, said Rep. Beth Kerttula, D-Juneau.

Sen. Lyman Hoffman, D-Bethel, said at least one community in his district is considering dissolving its government, and more will likely follow.

The Murkowski Administration had vetoed $37 million in state assistance to local communities and proposed using federal funds from a tax break approved by Congress as a one-time phase out.

Under the formula, each community would be guaranteed $40,000, but larger communities would receive less of a share than they received last year.

But the committee rejected that plan and instead voted to divide the money based on the amount of money local governments received from the state's fiscal 2003 revenue sharing and Safe Communities programs.

That means Anchorage would receive $5.2 million, which is $1.3 million more than the administration had proposed. Juneau will get $184,000 more than originally proposed and the Matanuska-Susitna Borough would receive about $211,000 in additional funding.

Smaller communities that stood to receive a significant increase in the one-time funding will instead see, in some cases, drastic cuts.

In Adak, city leaders had planned to use the $40,000 in one-time assistance to make repairs to its water distribution system and utility service, said operations manager Stephen Hines. Under the new formula, Adak will receive about $18,000 instead.

City officials may have to consider increasing utility rates to make some of the needed repairs, Hines said.

The Legislative Budget and Audit Committee, an interim committee with the power to appropriate money when the Legislature is not in session, voted 6-3 for the proposal. Hoffman, Kerttula and Rep. Ralph Samuels, R-Anchorage, voted against the proposal.

Sens. Ben Stevens, R-Anchorage; Gene Therriault, R-North Pole; and Wilken voted for it along with Reps. Mike Hawker, R-Anchorage; Vic Kohring, R-Wasilla; and Jim Whitaker, R-Fairbanks.

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