House Panel considers plan to help fund local governments

Posted: Tuesday, March 07, 2006

Community leaders from around Alaska on Monday spoke in favor of a proposal to reinstate revenue sharing, using money from the Amerada Hess account.

Under the measure, the state would annually pay out $300,000 for each unified municipality, $150,000 for each borough that is not unified, $75,000 for each city and $25,000 for each unincorporated community.

Another measure would pay for the program with an annual appropriation from the $28 million earnings reserve of the Alaska Permanent Fund's Amerada Hess account, a legal settlement between the state and oil companies over trans-Alaska oil pipeline royalties.

The measures are among almost a dozen separate proposals for spreading some of the state's wealth to its beleaguered communities. Revenue sharing, which existed in the state for almost 50 years, was eliminated two years ago in a budget-cutting measure.

Sen. Gary Stevens, R-Kodiak, told the Senate Community and Regional Affairs Committee that the bill is not the whole answer.

"This is a bottom line, minimum amount," he said, adding that other more controversial proposals such as using the permanent fund's Earnings Reserve Account or the Constitutional Budget Reserve will be harder to get passed.

Community representatives called it a good start.

"We feel kind of backed up against the wall," said Sitka Assembly member Doris Bailey.

Ten small communities closed their doors last year and dozens more are in similar trouble, according to the Alaska Municipal League.

AML Director Kevin Ritchie said the money is critical to small communities that have next to no tax base.

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