Alaska editorial: State revenue sharing must be maintained

Posted: Thursday, November 15, 2007

Alaska municipal leaders made a strong and convincing case last week for the state to share the wealth from higher oil taxes with local governments.

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The tendency in the past from legislators and governors is to cut the state budget by reducing the amount of money flowing to municipalities. State officials have always seen this as the most painless way to cut budgets.

It's not at all painless for local governments that have to trim spending or increase taxes, however.

The public usually doesn't make the connection between state budget cuts and a higher burden on local governments, but skyrocketing fuel prices could create serious trouble in the months to come.

If crude oil prices remain above $90 a barrel for long, some are predicting that fuel prices could go up by another $1 a gallon. So while the state treasury swells and oil companies pile up huge profits, individual Alaskans and local governments feel the pinch.

This month about 400 municipal leaders from across the state met in Fairbanks for the Alaska Municipal League convention and renewed their call for a commitment by the state to revenue sharing.

They received words of encouragement from Lt. Gov. Sean Parnell and House Speaker John Harris on the topic, though the two stopped short of agreeing to the municipal league position that 6 percent of all revenues from natural resources should go to local governments.

Revenue sharing needs to be a state priority. We also think that the league is right in objecting to any attempt to link revenue sharing to the pension obligations the state faces in the Public Employees Retirement System and the Teachers Retirement System.

The Senate majority should abandon the political tactic of pretending that education, the state retirement debt and revenue sharing are parts of a "three-legged stool," bound together in a meaningful way.

These elements need to be looked at individually, not as parts of a package in which votes are swapped to gain political leverage.

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