State could force towns into boroughs

Posted: Tuesday, April 10, 2001

Gustavus, Angoon, Hydaburg and many other communities across the state could be forced to join a borough or form their own under a bill passed by the Senate on Monday.

If the measure becomes law, some 52,000 residents who live outside boroughs and don't pay local taxes for schools might be forced to contribute.

"We should not make any mistake. The passage of this legislation will require people in newly organized areas to sit down and write a check for education," said Fairbanks Republican Sen. Gary Wilken, prime sponsor of the bill.

The measure would affect residents in what's called the unorganized borough - a vast area stretching from the southern tip of the Panhandle across the state and encompassing all communities outside the state's 16 organized boroughs. Although some communities in the unorganized borough, including Hoonah and Hydaburg, have formed city governments and already help pay for schools, many have not and depend on state funding for education. The state can't force communities to form cities and pay taxes, but under the bill, it could force them into boroughs. A borough taxes residents to provide a regional administration that runs schools and other services.

The bill would direct the Alaska Department of Community and Economic Development to identify areas in the unorganized borough that appear financially capable of sustaining local government. The agency would present a list of candidates every year to the state Local Boundary Commission, which would select areas it deemed suitable for annexation or incorporation and hold public hearings. The commission would be allowed to submit no more than two proposals each year to lawmakers. Unless the Legislature rejected them, the commission's proposals would go into effect, and the communities within two years would have to help pay for services through property taxes, sales taxes or other fees.

Cash-poor communities, including some with a subsistence economy, might not meet state standards for incorporation or annexation, said Dan Bockhorst, staff to the Local Boundaries Commission, which proposed a nearly identical bill.

"The commission would focus on those areas that had the most resources, and I think it's reasonable to conclude the areas that are subsistence-based economies are going to be certainly among the last that would be considered under this bill - and that's not to suggest they even are eligible," Bockhorst said.

However, communities such as Bethel and Gustavus might be vulnerable. In January the commission released a policy paper supporting the idea of forcing unincorporated areas into boroughs. The paper noted even communities with limited finances such as Hoonah and Hydaburg have voluntarily formed cities and paid taxes, while more prosperous towns such as Bethel and Gustavus bear no financial responsibility for education. Gustavus, near Glacier Bay National Park, has no formal town government.

"While some unorganized regions are poor, others have resources that are superior to areas that long ago accepted responsibility for schools," the commission wrote.

Bethel Democrat Sen. Lyman Hoffman argued against the measure, saying many of his constituents already are resistant to government.

"Many of these areas are moving in the opposite direction of more government. They want less government. Why should we force these people to have more government?" Hoffman said.

Rampart Democrat Sen. Georgianna Lincoln also objected, saying her constituents are concerned the state would force a borough government on people too poor to pay taxes. She argued residents in the unorganized borough already contribute to education by spending millions of dollars in urban areas.

"We are contributing to an urban economy and that comes back to the state," Lincoln said.

The last time the Legislature required areas to incorporate was 1963, when it passed a measure forcing Juneau and seven other areas to form boroughs. Juneau later combined its city and borough governments.

The borough bill passed 11-9 Monday with Juneau Democrat Sen. Kim Elton voting against it. Sen. Alan Austerman and Sen. Robin Taylor, Republicans who represent Southeast communities, also voted against it. The measure now heads to the state House.

Kathy Dye can be reached at

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