Alaska editorial: Part of surplus could go to funding local governments

Posted: Thursday, December 27, 2007

Gov. Sarah Palin made local governments happy with her proposal to give them $75 million worth of aid in next year's budget. Her generous proposal, doubling the current amount of aid, is made possible by a big state surplus that's driven by high oil prices and Alaska's recent oil tax hike.

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Sharing some of the state's surplus oil wealth with local governments is the fair thing to do. Unlike the state, local governments have to get most of their money for essential public services by taxing their own residents. It wouldn't make sense for the state to hoard surplus oil money when cities and boroughs have to squeeze their taxpayers to meet growing costs.

Welcome as the proposed funding boost is for local governments, it relies on what could be a temporary spike in state revenues. That's a problem, as Anchorage Mayor Mark Begich repeatedly points out.

Without a stable, long-term commitment to fund the aid, cities and boroughs take a big risk if they use the money to pay for essential services. Cutting local government aid is an easy move for legislators if state budgets get tight. That's why Mayor Begich and the Anchorage Assembly use the state aid for property tax relief, rather than paying for new programs.

Gov. Palin recognizes the problem, according to spokeswoman Sharon Leighow. In the coming legislative session, the governor will support making a predictable, long-term commitment to fund local government aid.

The Legislature did a lot of work on that front earlier this year, but lawmakers didn't manage to pass a final bill. The Senate has agreed to create a community revenue sharing fund. It would get the lesser of $50 million a year, or 3 percent of the previous year's state income from leases and royalties for natural resources. The Senate measure stalled in a House committee and the full House never voted on it.

The House can take up the Senate revenue sharing measure when the Legislature returns in January. There seems to be general agreement on the basic concept. Lawmakers shouldn't let quibbling over details kill the effort to secure stable and predictable funding of aid to local governments.

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