Municipal League calls for more state spending on cities

Group, mayors stipulate that state aid should be without strings attached

Posted: Sunday, November 14, 2004

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ANCHORAGE - Leaders of Alaska cities called on the Legislature and Gov. Frank Murkowski to loosen purse strings and share wealth from state coffers with municipalities.

The Alaska Municipal League and the Alaska Conference of Mayors ended their annual meeting Friday in Fairbanks with an appeal for state aid - without strings attached.

"To keep our neighborhoods and communities healthy, safe and affordable, the state must share some of the bounty that belongs to all Alaskans," said Pete Sprague, a Kenai Peninsula borough assemblyman and new AML president.

"That means three things," Sprague said. "Local tax relief, more local control of public services and decisions facing our communities, and better basic local services that Alaskans care about like schools, public safety and road maintenance."

AML executive director Kevin Ritchie said the broad issue to be addressed is the relationship between state and local governments.

The framers of Alaska's Constitution valued local control and strong communities with a smaller state government that helped communities and shared state resources. He said the state should return to that model.

"Alaskans have a high level of trust and control of their local government, and local leaders know what they need to do to squeeze the value out of each dollar to make their community work," he said. "Reviving this kind of sharing relationship between the state and its communities can evolve to better serve Alaskans and save the state money."

State aid to communities, which predated Alaska's oil wealth, has largely dried up, he said. Alaskans in cities have some of the highest property taxes in the country, Ritchie said, and small Alaska communities have virtually no tax base.

If municipalities had more revenue, communities could solve their local problems without having to persuade state officials or go through the expensive state processes.

"Working together, the AML believes we can save money," he said.

Ritchie said the rising price of oil has been a boon to state government but a serious problem for municipalities, school districts and businesses. Every dollar increase means $65 million more in earnings for the state but higher expenses for cities and schools.

He also noted what he called a huge spike in employee retirement costs for municipal workers who are part of the state retirement systems.

"That problem really needs to be solved," he said. "The state is the one with the resources to do that."

Municipalities in 1985 were given $140 million as revenue sharing, Ritchie said. Going to zero has had a huge effect local taxes, he said.

The AML suggests the Legislature appropriate $100 million to $130 million for revenue sharing next year, Ritchie said.

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