Plans to help cities headed to Legislature

Lawmakers may consider a one-time $500 fuel 'dividend' for all Alaskans

Posted: Thursday, December 08, 2005

Dozens of Alaska towns fighting for their existence will watch closely as the state Legislature allocates its oil wealth in 2006.

A recent estimate shows the state could net a jaw-dropping $1.5 billion budget surplus because of a spike in oil prices.

Meanwhile, some cities are so bereft of funds that they can't even afford to officially dissolve their governments.

"(Cities) definitely need to see some sort of relief from the state," said Hoonah Mayor Dennis Gray.

Some legislators, such as Sens. Gene Therriault, R-North Pole and Albert Kookesh, D-Angoon, are eyeing the state's projected surplus as a way to help Alaska residents with their skyrocketing fuel bills this year.

"It's kind of nice, going into a session when you have lots of money ... and the opportunity to do something good," Kookesh said.

Legislators may consider a couple of ideas: a one-time $500 fuel "dividend" for all Alaskans who received a permanent fund check in 2004; or creating a permanent endowment, using half of the $1.5 billion surplus to provide long-term energy-cost relief to Alaskans.

Another idea from Senate Minority Leader Ethan Berkowitz is to use part of the budget surplus to fund alternate energy projects - such as wind and hydroelectric power - to reduce remote villages' reliance on expensive diesel.

The surplus is not the only target for improved local funding.

Numerous new and old ideas to stabilize local governments already are under debate this winter involving expenditures from Alaska Permanent Fund earnings or the state's general fund.

A number of these ideas don't require a vote by Alaska residents.

For instance, Senate Republicans said in November they will give "strong consideration" to creating a community dividend program, using permanent fund earnings, to support local government.

Gov. Frank Murkowski proposed using Amerada Hess account funds from within the permanent fund to pay for a community dividend plan. It would award roughly $25,000 to $40,000 to each community.

That's laudable, but not sufficient, according the Alaska Municipal League, which formulated its response to the governor's proposal on Wednesday.

At this point, a $75,000 community dividend is needed to provide for basic local government services, according to the Municipal League.

"Using the Hess account is one way, but (city leaders) are willing to work with the state on others as well," said Kathie Wasserman, director of member services for the league.

Communities are more hopeful of relief this year than they've been in a long time, she said.

"The political realities will make the Legislature anxious to act," added Jerry Mackie, a former Senate speaker who now works as a lobbyist.

So far, Hoonah has been able to stave off the drastic cuts that 39 other communities have already made, such as shutting down police protection and building maintenance.

But deed restrictions limit Hoonah's property tax base and the town's voters recently shut down an attempt to increase the local sales tax, said Gray, the town's mayor.

"We're having to trim down our budget to try to get by," Gray said. He said the city's prior savings will cushion the blow until summer, when Hoonah will have to look at cutting jobs.

• Elizabeth Bluemink can be reached at

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