Alaska cities ask for more state funding

Posted: Wednesday, January 23, 2008

The Alaska Municipal League wants state legislators to give 6 percent of all natural resource revenues to cities and boroughs, with no limit on the totals.

Brian Wallace /Juneau Empire
Brian Wallace /Juneau Empire

The move would help Alaska towns that have struggled financially and were forced to reduce services, such as police and harbor maintenance, after a previous administration cut state funding known as municipal revenue sharing. Gov. Sarah Palin has been a proponent of such funding for cities and included money for it in next year's budget.

The league's plan calls for annual base payments of $250,000 for boroughs, $75,000 for cities and $25,000 for unincorporated communities. Their plan would spread the remaining funds to municipalities throughout the state on a per capita basis.

During a municipal league luncheon speech Tuesday, Palin said her 2009 budget included $75 million to share with Alaska communities, $25 million more than last year. It's the state's job to partner with cities to serve citizens, she said.

"You need to tell us what those needs are," Palin said.

Juneau Assembly member Bob Doll said the city could benefit from additional state funding because Juneau faces two challenges ahead: filling the gap sure to be left after a reduction in property tax assessments and carrying out a solid waste plan.

Doll warns one effect from an economic downturn is lower property values and a decline in tax revenue for the city. That means a base revenue reduction while city costs increase with programs such as curbside recycling. Shared revenue could fill the gaps, he said.

Hiring someone with the required skill and experience to negotiate contracts with Waste Management and Arrow Refuse will cost money, Doll said.

"I think the community wants to see the program," he said.

Palin told the gathering of mayors and city managers that her office was hearing the Alaska Legislature wanted to fund revenue sharing, but somewhere less than the $75 million she proposed.

Assembly member Jonathan Anderson said the Legislature is looking at cutting revenue sharing to help the state save money.

"Open-ended sharing is scary for the Legislature," he said.

Juneau Mayor Bruce Botelho said no one doubts that a revenue sharing program would emerge from the 90-day session.

"Legislators and the governor made commitments," he said.

Whether or not sharing reaches 6 percent is less important than getting the initial step in the right direction, Botelho said.

Revenue sharing in the past kept the city from choosing between raising taxes or cutting services.

"It would have been impossible without revenue sharing," he said.

Doll said there is an essential disparity between how the state and cities collect revenue.

"Cities collect it the hard way by taxing their citizens. The state gets its revenue out of the ground," Doll said. "It's not unreasonable at all to share that money flowing out of the ground with tax-paying citizens."

• Contact Greg Skinner at 523-2258 or

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