Meeting focuses on ways to plan ahead

Posted: Tuesday, November 09, 2004

A decade of state budget cutting, cost-shifting and mandates have led to skyrocketing local taxes, say many municipal leaders who hope to deliver that message loud and strong to the Legislature in January.

One possible fix to that problem would be for state lawmakers to institute a community dividend program funded by the Alaska Permanent Fund revenues, says a draft policy statement to be considered for adoption at this week's Alaska Municipal League-Alaska Conference of Mayors meeting in Fairbanks that begins Wed-nesday.

Another would be to turn some of the windfall from the current high oil prices into general fund appropriations to a revamped Municipal Revenue Sharing program.

AML also advocates returning locally generated state revenues to the communities, through equitable sharing of gas taxes, tobacco taxes and alcohol taxes, as well as creation of a state equivalent to the federal PILT (payment-in-lieu-of-taxes) program to cover state properties within municipalities now exempt from local property taxes.

Several members of the Kenai Peninsula Borough Assembly are headed to the Fairbanks confab where they hope to make the peninsula's wishes known and add the borough's voice to those of other municipalities around the state in delivering AML's message to the Legislature.

Among those going is newly elected assembly President Gary Superman. He said the AML priorities list appeared to make reasonable requests of the Legislature given the increased revenues coming in from oil.

"I think we may have a shot at reinstatement of revenue sharing programs. That will be the major push," Superman said.

Sooner or later, he added, the lack of help from the state will begin to have a real impact on local tax levels. Most municipalities, he said, are in consensus on the priorities list.

The assembly's new vice president, Ron Long of Seward, said he is comfortable with the policy statement being considered by the AML.

"I like the idea of a fiscal plan and getting something established that we can agree on that would jump-start the Legislature," he said.

But Long also expressed concern that those windfall oil revenues likely to swell state coffers would tempt lawmakers to propose what he called "legacy" projects new public works just because the money is there. He'd rather see the money used to fix existing infrastructure and to provide revenue sharing and tax relief to communities that have been forced to pick up the tab as the state shifted costs to the local level. He noted that Soldotna, Seward and Homer already are in the top 10 communities in the state in per-capita tax rates.

Pete Sprague, whose second term as assembly president ended last week, is in line to assume the presidency of AML board of directors Friday. He said last Thursday that he wants to see AML narrow the focus of its lobbying efforts specifically toward a reinstatement of the municipal revenue sharing program in some form.

"We do have a number of state and fed priorities, but as far as working on state priorities, revenue sharing is crucial," he said.

Other legislative priorities under discussion by the municipal leaders include a call for legislation to protect communities and taxpayers from the rising costs of the state mandated Public Employee Retirement Program and Teacher Retirement System, or PERS-TRS.

According to the draft statement, communities are "being rocked" by 20-percent increases to municipal and school salaries scheduled over the next several years. AML is calling on the Legislature to take fiscal responsibility for the cost increases to the state programs.

AML also wants the Legislature to continue boosting school funding. Last session, lawmakers did just that to the tune of around $87 million. AML, however, says schools remain "under intense fiscal pressure" to meet mandated educational standards, handle past and current inflation, while also meeting state-ordered increases to retirement programs.

The municipal league has named adoption of a percent of market value (POMV) endowment plan as one of its legislative priorities aimed at establishing a long-range fiscal plan. That idea met with at least some resistance on the assembly at its Oct. 26 meeting when assembly member Paul Fischer of Kasilof proposed a resolution stating that the assembly wanted any reference to a POMV dropped from the AML legislative priority list. That move failed, however.

Nevertheless, the POMV idea has been a controversial one. The Alaska House approved a ballot measure last session, but supporters in the Alaska Senate could not find enough votes to move the measure to the fall ballot.

The draft priority statement views a POMV endowment as a way to protect the fund, stabilize dividends and provide sustainable revenue for key state and local services and local property tax relief. Such an endowment along with a community dividend could sustain affordable local taxes, adequate schools, public safety and such over the long term, the AML draft says.

Specifically, the AML draft priorities statement supports setting aside at least one-tenth of 5 percent of the annual value of the fund for a community dividend shared by Alaska's communities.

Long said he hopes the new Legislature will take another look at the POMV idea. Promoting the community dividend idea is a good move, he opined, because it could lead constituents to pressure their senators to at least talk about it.

Sprague said the POMV issue is sticky, but definitely worth discussing. The community dividend idea that AML supports wouldn't be as easy as funding a municipal revenue sharing program, Sprague said. Funding the revenue sharing program, which is already on the books, would require lawmakers to direct some of the new revenue coming from the spike in oil prices toward that program through a general fund appropriation.

The community dividend program has more hoops through which to jump. Having both a funded revenue sharing program and a community dividend program would be nice, but Sprague doubts that idea would fly politically, he said.

Superman said he expects the POMV issue to come up for discussion in Fairbanks. If it doesn't, he will bring it up. But he added that he doesn't expect the Legislature to examine the POMV or any use of the permanent fund this session because of the current level of oil revenues.

The league also is expected to call for a comprehensive transportation package, including roads, bridges, airports, harbors, ports, marine highways, dust control and trails.

Another idea to be considered at the meeting is a provision calling on the Legislature to adopt an open meetings act applicable to its own policy, deliberations similar to the Alaska Open Meetings Act under which local borough assemblies and city councils operate.

AML's current policy statement calls for construction of an all-Alaska natural gas pipeline from the North Slope to a southern tidewater terminus. Proposed revisions by the AML Legislative Committee, which met in Kenai in August, would eliminate the word "all" from "all-Alaska," as well as reference to a southern tidewater terminus, but add the words "including regional spurs," to indicate support for access to pipeline gas within Alaska.

The league also would support opening the Arctic National Wildlife Refuge to oil development and efforts to increase revenues by changing the Economic Limitation Factor on oil.

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