The state of Alaska has for years recognized the unique challenges faced by citizens who live in areas with low population. It was generally understood that schools, roads and public safety are still important to areas without economies of scale. The arrangement is even more compelling when one looks at a map showing Alaska's resource wealth - virtually all of our state resource revenues come from rural Alaska.
Consequently, the state shared funds with communities through three major programs. Revenue sharing was used for municipal services such as road maintenance and health facilities; capital matching grants for community improvement projects; and the Safe Communities Program provided for public services such as fire protection and emergency medical needs.
Last session, Gov. Frank Murkowski eliminated funding for all three programs.
To ease the blow somewhat, the governor proposed passing along one-time federal tax relief money to municipalities across the state. In the absence of revenue sharing, our small towns and villages budgeted on the promised $40,000 minimum in the governor's plan, an understandable effort to protect essential services such as water, sewer, and insurance - line items normally funded by the programs he vetoed.
But in early July, just weeks after the governor's vetoes, a summer legislative committee voted to reroute the federal moneys away from Alaska's smallest communities.
The figures are devastating. Some rural communities lost almost all of the $40,000 they had been expecting, many lost more than half of the $40,000, and all of them were hurt. This means those communities will have difficulty providing winter heating, electricity, water, and sewer - the basic infrastructure we all depend on in the Alaska winter. This means small communities already hurting are going to be pushed to the brink.
How could this budget thievery happen? When the Legislature is not in session, the Legislative Budget and Audit (LB&A) committee has the power to make funding recommendations for federal money disbursement. When the Murkowski proposal to give federal emergency tax relief funding to rural communities came before the committee, Fairbanks Sen. Gary Wilken made a motion to gut the proposal and re-route a large portion of the money to urban communities.
Sen. Wilken said rural communities would get too much money, a "premium." He argued that urban Alaska was not being treated equally.
Wilken moved to reapportion the money based solely on the percentage communities received in Municipal Revenue Sharing, a tactic similar to what he's been trying to do to rural education for years. Sen. Wilken's cut was opposed by Sen. Lyman Hoffman, Rep. Ralph Samuels, and me; but the measure passed 6-3 with Sens. Wilken, Con Bunde and Ben Stevens voting for it, joined by Reps. Mike Hawker, Vic Kohring and Jim Whitaker.
Right now there is a bit of a standoff on the final result of this action. While Murkowski has the power to override the committee, he instead chose to take the LB&A recommendation and distribute the funds according to urban legislators' redistribution plan. The governor has said he may solve the problem by making up the rural shortfall with other one-time federal money due to the state in late October. However, that money must also go through the LB&A committee; there is a possibility the same thing could happen again. October is well into freeze-up in many rural communities. How will they pay for fuel then?
One Anchorage senator explained his vote by saying, "People that don't live in the heavily populated areas know that they aren't going to receive as much because they haven't paid as much in." I guess that depends upon what your definition of "paid" is. In my opinion, rural Alaskans have paid plenty, and they are getting ready to pay more.
And don't think for a minute these impacts to the Bush will not be felt in urban Alaska.
As former executive director of the Resource Development Council, Paula Easley, editorialized recently, "If we're smart, urbanites will advocate [projects] that support rural economic ventures, not just because it's good for us but because it's good for everyone." I completely agree. The governor should have overridden the LB&A committee. All of us should remember we are one state and we rise or fall together.
Beth Kerttula of Juneau serves as Democratic whip in the Alaska House of Representatives.