Memorandum - Unalaska, Alaska · 2019. 9. 9. · Memorandum Date: September 7, 2019 To: City...

Memorandum

Date: September 7, 2019

To: City Council Members, City Clerk Veeder,

Subject: Trip report to the AML Summer Conference in Soldotna, Alaska 8-13-15 2019.

I left Unalaska on Monday, August 12, on the afternoon flight, and arrived in Soldotna that evening after a Raven air flight from Anchorage to Kenai.

Tuesday, August 13nd, I attended the Conference of Mayors meeting started at noon to 500PM. The first item on the agenda was a welcome by Mayor Jan Hill of Haines President of the Mayors Conference, and Mayor Brain Gabriel of City of Kenai. The first agenda item was dealing with challenges dealing with the current State Budget and the uncertainty communities will face next year. The consensus of the group was to be prepared for more of the same in in 2020. The majority felt that Gov. Donleavy would double down in FY20/21 with further reductions across the board in state funding ( it was just announced on Friday that the Governor wanted a 15% cut to all state departments in the next two years) that means reductions in service to communities across the state.

The next discussion was on State and Local Revenues Options, we discussed income and sales taxes, most felt there was little chance of any new revenues taxes moving forward next session, especially in an election year. There is a concern that Dunleavy will pass more responsibilities onto communities and will also look at further reductions to the Marine Highway System, as well going after state shared fish taxes again. The next discussion was on school funding it was felt that the funding formula is on the table for a reduction in FY21 and that school forward funding issue, is being decided by the court system at this time. The debt reimbursement issue was cut by 50% last year by the legislature last year I doubt it will be further reduced.

Later in the afternoon the Mayors discussed their priorities for the next year and many of them will be finalized at the November AML conference. Some of the main priorities by category are as follows.

• Public Safety, substance abuse, mental health, opioids,

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• Sales tax, income taxes, online sales taxes potential impacts on communities.

• State budget and fiscal policy and new revenues sources. • Pers reform on behalf of community's hold the line.

• Community Revenue Sharing, stable and sustainable • Fisheries, support increased research, ADFG funding, Marine Mammal,

Protection Act, MSA, Subsistence is a priority, and where it is in conflict with other uses.

• Capital Project Funding. • Review of Unfunded Mandates, and oppose them.

The Mayors then moved on to community updates by the Mayors in attendance, I gave and update on Unalaska Marine Center, development of the wind alternate energy project and Pollock B season update.

The afternoon session end; the Mayor's Conference Board of Directors held their business meeting, they approved the finance report, had reports from the President Hill and AML Executive Director Andreessen.

Wednesday August 14th, the AML Conference got underway at 8:30AM Welcome and Introductions were made by Tim Navarra, Mayor of the City of Kodiak and AML President, we also had welcomes Mayor Anderson of City of Soldotna and Mayor of the Pierce, of the Kenai Peninsula Borough.

Nils Andreassen AML Executive Director gave us his ED report and overview of the conference agenda. He gave and overview of the upcoming issues facing AML as we move forward to the next legislation session.

The first agenda was the Legislative update by legislators of the Kenai Peninsula area, Senator Peter Micciche, of Kenai, Rep. Gary Knopp of Kenai, and Rep. Sarah Vance, of Homer majority which he is a part of. They that Republicans will stay in control of the Senate and he fears the differences with the House will continue if the House Coalition stays in place. He hopes that there will be some issues that they can work across the aisle on. They were glad of the changes to see the rewrite Public Safety Bill 91. They felt that school funding would remain stable, that there would not have the wherewithal to implement and new taxes, or changes to the oil company subsidies. The felt that there would be more cuts to the state budget brought forward by the Governor and that the PFD payout and formula will continue to be an issue. They believed that the State Revenue Sharing would continue, but at the same smaller amount of the past few years.

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Capital project funding would continue, but mostly federal government pass through dollars.

Up next was the Legislative Bill review by Dianne Blummer, and Heather Brakes AML Lobbyists. They discussed legislative bills from the past session and upcoming bills coming down the line in the next legislative session that will impact communities.

The Luncheon speakers were Nils Andreassen, who discussed the concept of AML bringing back a proposal supporting community dividend proposal. Nils laid a plan the Goals would be 1. Connect state funding to services provided 2. Negotivate increasing number of responsibilities to move from the state to communities. 3. lncentivize the adoption of powers, borough formation and class upgrades.

The next discussion was to use state revenues in a 40-40-20 plan in statue or in the constitution if the PFD is constitutionalized. To 40% would fund state government, 40% to fund the individual PFD estimated average of $1,808 per person. A 20% to the community dividend program.

The community dividend would fund items such as, community assistance, school bond debt cap, road and rural airport maintenance, Owl Broadband, Port and Harbor Improvements, Law Enforcement and Community Jails, and deferred building maintenance and many more issues. I will include Nils Andreassen memo on this topic for your review. The next Speaker was Mayor of Anchorage Ethan Berkowitz, who discussed the impact to Anchorage from the last legislative session, and his thoughts that of the continued impacts to communities in the second year of the Dunleavy administration. He advised AML to be fully engaged, communities need to work leaders and their legislators and to hold Dunleavy administration feet to the fire during the upcoming session.

After lunch Nils lead a legislative issues discussion, on a whole host of issues, including such as School Construction, Port and Harbor Improvements, Senior Citizen Property Tax Exemption, Community Assistance, Law Enforcement, and Community Jails, Pers, and Ters and Community Road and Airport Maintenance.

Late in the Afternoon AML had a guest Speaker Senator Lisa Murkowski, addressed AML on a variety of federal issues, including NOAA budget, military base funding, trade tariff impacts, fisheries issues, and energy issues facing

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Alaska. The Senator touched on some state issues such as the forest fires, climate change issues impacting water systems salmon fisheries.

We then broke into small groups and worked on AML priorities list, I lead the fisheries group we had good discussions on many issues I will provide the complete list from the various groups from AML and will provide it with this trip report.

That evening the City of Soldotna held there reception at a City outdoor park in tents on the Kenai River.

On Thursday August 15th, we had another 830AM start, Mayor Gabriel, of Kenai Gave a talk on safety accountability by municipalities and discussed ways to decrease injuries, and the need to have safety committees to engage and investigate each event in the workplace. Continue to work with the employees get there input to reduce accidents and workmen's comp claims.

The next agenda item was titled, Filling the Gap, we had presentations from 5 Alaska non-profits and what can be done by communities to assist major nonprofits in Alaska, to continue their mission to assist the homeless, and low income, folks, the school funding, and public broadcasting with the declining state revenues. We had a very good discussion, and it was very enlightening too hear the impacts that the non-profits are facing with reduced funding.

The next topic was a carry over from the previous agenda item was titled, Working Toward Solutions, Building the Partnerships Necessary for Success. The discussion centered on how you could work with the business or non-profits sectors in your community to work address the needs in your communities with little or no help from the state and federal governments.

The AML Board of Directors met from 11 :00-2:00 PM they had their business meeting.

I flew back to Anchorage on a late afternoon flight on Thursday overnighted in Anchorage, and I returned to Unalaska on Friday on a delayed morning flight to Unalaska arriving at 2:45PM that afternoon.

~ MayorFr~ 4

Attachments: 1. State Revenue options 2. Alaska Municipal Service Dividend 3. AML Priorities for 2020 4. List of Bills Impacting Municipalities 5. Four Steps to Maximize Local Self Government 6. Eight Stars of Gold

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State revenue options

o Adopt a statewide income tax

o Adopt a statewide sales tax

o Increase the tax on motor fuels

o Increase the tax on alcohol

o Expand corporate tax to cover LLCs, S Corps

o Raise mining, fisheries, cruise ship passenger taxes

o Change oil production tax rates and/ or credits

Individual income tax

o Tax could be a percentage of gross income,

percentage of net income after federal deductions

or a flat percentage of federal income taxes

o Tax rates on gross or net income could be flat or

the rates could rise for higher-income taxpayers

o A flat state rate applied to federal income tax

would incorporate the progressive nature of

federal taxes- higher rates on higher incomes

Estimated revenues (examples)

o Governor's 2016 income tax: flat 6% of federal

tax could have raised estimated $210 million FY20

o House 2017 income tax: graduated 2.5% • 7%

of taxable income estimated at $690 million FY20

o Governor's 2018 flat-rote income tax: 1.5% of

income could have raised $320 million in FY20

o Pick a base and the tax rate = estimated revenues

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Another income tax option

o Sen. Bishop's 2017 education tax proposal

o Flat tax ("head tax"), not percentage of income

o Minimum $50 tax per year for everyone,

stepping up to $100, $200, $300 or $500

per year, depending on income brackets

o Max: $500 for incomes over $500,000/year

o Est. annual revenue: $50 million to $70 million

State sales tax

o Governor's proposed 2016 state sales tax rate

at 3% estimated revenues at $500 million a year

o Exempted groceries and health care services

o No exemption on equipment/material used in

manufacturing or extraction of natural resources

o No limit on amount of a transaction subject to tax

o Revenue estimate always dependent on exemptions

Other options

o Expand state corporate income tax to S Corps, LLCs and all other closely held business entities

o Alaska has never taxed such corporate entities where all income passes through to the owners

o Not an issue in states with individual income tax

o Alaska estimates $150 million non-oil corporate income tax revenues FY20; no estimate for S Corps and such; a plausible guess is around $30 million

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Still more small options

o Double motor fuel tax to 16 cents/gal: $40 million

o Double all alcohol taxes: $40 million

o Double state mining license tax: $40 to $50 million,

highly susceptible to world metals market volatility

o Double taxes on commercial fisheries: $22 million

(assumes the municipalities continue to receive half)

o Double state (not municipal) proceeds of cruise ship

passenger tax and gambling tax: $12 million/year

Oh yes, oil

o Increase minimum tax at lowest prices from 4% of

gross to 5%, estimated gain of $100 million/year

o Eliminate per-barrel, sliding-scale credits that ease

production tax burden as oil prices climb above

the minimum-tax floor; credits go away at $150 oil

o At $65 oil, the credits reduce the tax bill by about

$1 billion; though producers still pay $7 50 million

o Oil also pays income and property taxes, royalties

To raise $300 million

o All are approximate estimates

o 1.5% tax on all income

o 1.5% to 4% graduated rote on taxable income

o 8% to 9% of federal taxes

o Note: 1979 Alaska income tax was 3% to 14.5%

of taxable income, which would raise more than

$1 billion if same rates applied to 2019 incomes

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Broad-based tax benefits

o Out-of-state workers would pay income tax

o Visitors would pay sales tax

o New broad-based tax revenues could help stabilize state and local finances for the long term

o Statewide tax would help distribute benefits of economic activity to all Alaska communities

o State income tax and sales tax can be deductible

on federal income taxes, subject to deduction limits

Broad-based tax negatives

··o State sales tax would encroach on municipal tax codes adopted over decades of local deliberation

o State sales tax added to municipal tax could put retailers at a disadvantage, harm local economies

Revenue estimate o Maybe more than 1 0% of sales or income tax

would come from non-residents; probably more from income tax than a sales tax as a lot of visitor spending (air fares and cruise ships) is not taxable

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Alaska Municipal Service Dividend

Vision:

To maximize local self-sovernment and leverage local1overnment resources in the public interest

Four Steps to Maximize Local Government

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Alaska Municipal Services Dividend is Not...

• Hickel's Community Dividend (1980s) • l t\~t~ad o rJndlvldiJill PFD

· ;:{~~~! ~~:;;;i~~iived~:!l~~~~n"td\~~~ be distributed to local Jovernments and

• Schools, ports, hospitals, etc

• Moses' Community Dividend (2001+) • Establishing a Municipal dividend fund

. ~:~~:~~~~~i!~.~~!~~~P~~:r~·.~~r:~~~~'~J~~~~pf{:~~~~~~it~rin&. •nd • Equa l to ltrne r of the amount calculated by multiplyinll $100 by the • of PFDs, or balance of

@trnlnJS retetvc.

• Berkowitz' Community Dividend (2017) • Desle;nGted fund similar to PCE endowment dr.~wn from earnings reserve, e• rnings to

enh;;m ce Community Assistance, unrr.'itticted use

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Alaska Municipal Services Dividend fits within

• Discussion of how to allocate earnings reserve POMV draw

• Instead of 50% to State Government, and 50% to Individual PFD ... • Increase local control, Jocill declslon·making

AML proposes a 40-40·20 plan

• 40% to State Government= $1,172,000,000

• 40% to Individual PFD = $1,172,000,000 or $1,808 dividend

• 20% to Community Dividend= $586,000,000

Goals and Justification

~ • Connect St.te fundlnl to servfce1 prt:~vlded, :tlmllar to orlalnal rewnue sharlna proan~m

• Nqotlate lncreuln1 number of responslbllltl115 to mow from the State to loe~~laowrnmantJ;

• lncantlvlle the edoptfon of powen, bcrou1h fDrmOJtlon end d.us uPirNH

Juttiflatlon

• Reduction In Stet• Government allocation • ldilnltllnaNidire:lllundlntlorSt:a•~~

• Anponds ID publk f.ld! In lou I ~-m•klnc • ~"' Ci- litll!o.W.: I INib...l kaoh tl.....a;,._Oo ~li.-..lltlloufly · ~..,._l.ltt;~~ lllrtunlfl.ncm.u\:1- •lllf...,~- I'O!Otnll

• a.dt1(:1.Jon In IMIIviduJH PFD i!lltKaUon • W.Inc.fnt~ryofloai-!WIYMatt ' .._,. ... ina-.~ I t !fie laullewl • rm.._..~oca,~•r,. • .-.-_.. • IIICI'e...,rWeofAia.,qnalnSC.'-ipe ......

Components

• School Bond Debt Match

• Port and Harbor Capital improvements

• Community Assistance

• Road and Rural Airport Maintenance

• Law Enforcement and Community Jails

• Deferred Building and K-12 Maintenance

• Senior Citizen Property Ta~ E~emption Reimbursement

Total FY20

$100,000,000

$40,000,000

$20,000,000

$100,000,000

$80,000,000

$75,000,000

$84,000,000

$586,000,000

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Variation in Decision Making

• Earnings Reiserve POMV Increases;: CPI increases in funding for each procrc~m, excess into municipal capital projects fund

• Earnings Reserve POMV decreases= flat funding, no new bonding, property tax exemption decreased

• Hold harmless provision- any power or program that has been taken on can't be left unfunded

• Floor · $200 million

• Maintain power of appropriation over total% of POMV • Allocation bv Stiltutes

• Add or eliminate programs as necessary, with annual notice of intent

School Bond Debt Match - Develops sustainable spending plan

• Justification -continued State obligation to education • Inability of school construction program to suffice

• Begin with and fund current system of 70/30 or 60/40 match

• Two community drop off in next two years, five in 6-7 years ($43,420,767)

• The State 's liab ility is $82,689,586 by FY22, and $58,050,846 by FY25

• As the State's obligation is reduced, approve new bond packaaes

• Determine changes to debt ceiling based on needs and 3 year earnings/POMV d~w av"rage

• Determine match- 70/30, 60/40, or SO/SO- based on local ta)( recovery

• Available to all organized boroughs and Home Rule/First Class cities

Port and Harbor Capital improvements - Develops sustainable spending plan

Justification : State transfer to municipalities of undermaintained ports and harbors

• Current H8528 DOT debt- $16,451,706; 50% drops off in FY23

• Port and Harbor Matching Grant Program is SO% match by community, with annual requests offrom $5 to 7.5 million

• Maintain $25 million fund for port and harbor capital improvement bond debt matching

• Potential priority of AMHS ports

• Rolling regional project calls- Southeast, Southcentral, Southwest, West/Northwith prioritized allocation

• Port and Harbor STIP

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Community Assistance - Decreases current State spending

Justification -keep the ll&hts on, incAtase capacity in majority of local governments

• 39 local1overnments currently receive more than $100,000 • awrese 3" of their buda•t

• For the 126 others, aver.ilge receipt of $821229 • aver•ac 9.91" of budaets

• $100,000 equal allocation benefits majority of communities

• Those who see reductions most likely to be beneficiaries of other pro1rams

• For those negatively Impacted, sugsest step down decreases over next fiVe years

• Add Human Service Matching Grants, Transit Matching Grants and OWl

• link to CPI adjustments In future years

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Road and Rural Airport Maintenance - Devolution of State programs

• Available to all Boroushs, and Home Rule/First Class Cities

• Coordinated by DDT&PF relatfve to current progr.~m needs

• Road maintenance reflected by miles within municipality ~ 15,718 miles of public: roads, fP $28545 per mile I popul.11tion

• Caps· at di~rent tleB: $10, $5 ilnd $1 million

• Rural airport maintenance determined by averaee annual flights a 155 iilrparts @I $100,000 annual melntenilnce • popui1tion

• Tiers $1 million, $5006r. •nil $lOOk

• Contract basis fur second class cities- depending on capacity

• Hold harmless in case of funding decreases and/or population Increases

Law Enforcement and Community Jails • Responds to public safety priority, strengthens local capacities and capabilities - Potential reductions in State Trooper budgets, DPS

• Community Jails currently in place -$7,000,000- needs assessment

• Strengthen municipal pollee -base funding for officers, liability Insurance • C1p of $10 million; $100,000 per officer, b1s.ed on 16,9 per W,OOO popul•tlon

• Village pollee offlceB- transition to municipal police, with base funding, liability Insurance, incr~ne re1ional ov~rsraht ·

• VPSOs- transition to municipal pollee, with base funding, liability insurance, with regional oversight

• Incentives for adoption of police powers, multi-year investments

• Joint training

• Add local Emergency Response, current formula

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4

Deferred Building and K-12 Maintenance ~ Replaces existing GF requirements in operating and capital budgets - Devolves State programs to local governments

• Develop Municipal Deferred Maintenance Schedule • Currently unaccounted for outside CIP procen • Conduct needs as~ssment and evaluate similar to DOTSTIP

• Grants with miltch component, increase/decreue by class

• Develop K-12 Deferred Maintenance Schedule • Organited by DEED

• Municipal- implemented by local government • Loul Ulnlribulioll~uilbl~mKh~nbm-fundwlll m1tth loal tonlrlbutlon~ ~tt offundins

• REAA- 11dminlstered by Municipal Council of REAAs

$20 million cap; per capita formula

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Senior Citizen Property Tax Exemption Reimbursement - New, but builds local capacity and could include devolution of State programs

l l llt~e- llw c.-cmpD ru l prvp~:ny oWMerliNd tM:ti.lp lc:d • • a parmiln• nl home b., a f~del'll , 65 ~ars Df a:G~ or older, or, b¥' 1111 d l, lllb.le:d "Ve ter•n wilhll ~or 1reat.et &'t'r~e-«~.nntmcd diM b;/rty, or by iJ

wld!J'W}'ft'!do<Nt!t' tO et life .II t ~r th• n thll! :ar;ll! cr bO of eJthe.ra f the tWa ~trioratqgrfti: Th!! ~-,·emptioN applf" to til~ lint S 150,000 of u~ v;aluat[Qn, • nd •PDlinnts mint ~pply diiC'ct ly to th~fr m-unlcip•llty.

• In Sliitute, but not funded sin ce 1997

• Since 2008, this has resulted in loss of tax revenue to 241ocal governments of $673,109,088

• 2018's Total Exempt Taxes= $84,684,847

• local governments have an increasing role in supporting senior services

• Prosram could support Senior Benefits and potentially Pioneer Homes

• Should be unrestricted revenue, but directed to vulne~ble population support

Total impact by Community

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7/29/2019

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Total Impact by Community ~-~.~-~~ ~..:~.crz::s m:n=•te=a.==:I ~·C·~ · ~~:·

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State Fiscal Note

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Total State Direct Budget Reduction= $50 million

• Community Assistance less $10,000,000

• DPS less 10% admin of $80 million

• DOT less 10% admin of $175 million

• DEED less 10% admln of $135 million

• DCCED less 10% admin of $10 million

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Plus matching, leverage and potential for overall employee reductions

Additional questions

Room to add at 20%

• PCE endowment and/or program= $30 million

• PERS "on behalf" payments = $40 million as 18% of FY20 municipal sha•e

To be determined

• Scope of services within organized boroughs, role of cities

• What about unincorporated communities? • Responsibility of Stote- DPS, DOT, ond DCCED

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6

.ITI~LASKA

MUNICIPAL LEAGUE

.-tfa,J.a Conferl'ncl' t!f Jlayon

AML Principles

• Support the Alaska Constitution's mandate "to provide for maximum local self-government."

• Support policies that reduce tax burdens on local government and reimburse for State

mandated exemptions.

• Support State revenue-sharing as an investment in and support for municipal governance.

• Support adequate State funding for basic public services and infrastructure, such as: education,

public safety, health, emergency services, and transportation that is necessary for strong and

vibrant municipalities.

• Oppose unfunded and underfunded State or Federal legislative and administrative mandates.

• Oppose any efforts to reduce local revenues and local revenue authorities.

• Oppose State or Federal policies that shift responsibilities to local governments without a

negotiated agreement that includes adequate and full annual funding.

AML 2020 Policy Statements

Municipal Governance {Title 29)

• Support increased capacity within and professionalization of State tax assessment.

• Support improvements to records retention, public records access, and public notice.

• Support issuance of a municipal impact fiscal note within proposed legislation.

Community Assistance and Revenue Sharing

• Support a baseline floor of $60 million annually, and encourage a long-term, sustainable solution .

• Support a method to waive debt, forgive loans, or otherwise bolster "stressed" communities.

PERS/TRS Changes

• Support amendments to termination studies and penalties for leaving PERS/TRS.

• Support the development of a pathway to decrease overall unfunded liability.

• Oppose any cost shift of the State "on behalf' payment over 22%.

Fiscal Policy

• Support agency and programmatic efficiency and right-sizing, but oppose cost-shifting to

municipalities and eliminating essential services.

• Support the development of a broad-based tax to increase state revenue.

Public Safety

• Increase officer recruitment and retention.

• Support and strengthen the VPSO program.

• Support state efforts to decrease access to and impacts from opioids.

Economic Development

• Support increased investment in diversification and small business development.

• Support increased investment in training and workforce development.

• Support state responsiveness to local economic development planning.

Proposed to AML membership on November 22, 2019

Education

• Support early childhood education, career and technical education, and preparing, attracting and

retaining qualified educators.

• Support for accountability and assessment that meets federal requirements and maximizes local

control.

• Oppose any reduction in school funding and support investment in infrastructure and deferred maintenance.

Fisheries

• Support for appropriately funded DF&G and increased investment in fisheries research and

outreach.

• Support continued investment in port and harbor infrastructure.

• Support an active role in federal fisheries management, and clean water, as well as transboundary negotiations.

Energy

• Support for vetting of and investing in energy projects, processes and programs that decrease

energy costs

Transportation

• Support the establishment of an Alaska Transportation Fund that can be used to match or

supplement federal funding, and invest in multi-modal transportation infrastructure.

Minerals

• Support responsible resource development and the reduction of investment barriers alongside improved environmental risk management.

• Oppose additional state tax on mineral development and support robust local government property,

or payment in lieu of, taxes.

Water, Wastewater and San itation

• Support increased State investment in maintenance and infrastructure upgrades.

AML 2020 Legislative Position Statements

HB64/SB62- AML supports additional or new funding to Community Assistance, including through

sharing of the Alcohol Tax, but opposes any overall funding decrease.

SB52- AML supports reform to Title 4, but encourages amendments to increase local control of license

dispensation (similar to that found in HB107 /SB96).

SBSO- AML supports an employment tax that would help pay for maintenance and construction of

educational facilities.

HB75/SB74- AML supports increasing minimum broadband speeds from 10 Mbps to 25 Mbps.

HB79- AML supports addressing recruitment and retention of peace officers and firefighters by

developing an appropriately structured Tier within PERS, but demands that safeguards be put in place to


protect from additional unfunded liability and also that the plan be provided to a broader group of

public employees.

HB131/SB104/HJR7 /SJR6- AML opposes changing the annual appropriation limit on State spending, and

does not support changes to the Constitution to this end.

HB65/SB63- AML overwhelmingly opposes the repeal or veto of shared fish taxes.

HB59/SB57- AML overwhelmingly opposes the repeal of the municipal tax levy on oil and gas property.

HB66/SB64/HB106- AML opposes repealing the school bond debt reimbursement program, any

reduction to payments of past debt commitments, and any extension of the moratorium on the

program.

HB84/SB107 /HB30- AML supports reform of Workers Compensation but disagrees with the

presumption of compensability for disability based on service as a peace officer or emergency

personnel, and opposes extension of benefits to potential beneficiaries outside immediate family

members.

SBllS- AML supports the suggested increase to the motor fuel tax, and suggests an amendment to

sharing revenue with local governments with responsibility for road construction and maintenance.

HB130/SB110- AML opposes repealing the Community Assistance Fund, Power Cost Equalization Fund,

and other long-term investments held by the State, as well as vetoes to the capitalization of the same.

SB126- AML opposes forced consolidation of school districts.

HJR17- AML calls on Congress to repeal the law that prohibits tribes from utilizing Indian Self

Determination and Education Assistance Act funds for education in Alaska.

HJRS/SJR4- AML opposes the Constitutional Amendment requiring voter approval of new or increased

taxes.

HB73/SB69- AML supports amending the charitable gaming permit statute to exempt from permits and

fees those municipalities or organizations with $20,000 or less in receipts per year.

HB156- AML supports allowing school district and other public employees the ability to opt-in to State

health coverage.

HB69/SB67- AML opposes repealing the Alaska Public Broadcasting Commission, as well as veto of the

same.

HB61/SB59- AML opposes repealing the reimbursement of municipal capital project debt, as well as

veto of the same.

HB76- AML opposes a mandatory building code that is not inclusive of local government perspectives.

HB60/SB58- AML opposes repealing the Senior Benefits Payment Program.


HB SB SHORT TITLE SPONSOR HOUSE SPONSOR SENATE

ALCOHOL TAX: APPROP TO HOUSE RULES BY SENATE RULES BY

HB 64 SB 62 COMMUNITY ASSIST.

REQUEST OF THE REQUEST OF THE

GOVERNOR GOVERNOR

SB 52 ALCOHOLIC BEVERAGE

CONTROL; ALCOHOL REG SENATOR MICCICHE

EMPLOYMENT TAX FOR SENATOR BISHOP SB 50

EDUCATION FACILITIES

INTERNET FOR SCHOOLS; REPRESENTATIVE SENATOR HOFFMAN HB 75 SB 74

FUNDING RASMUSSEN

PEACE REPRESENTATIVE

HB 79 OFFICER/FIREFIGHTER KOPP

RETIRE BENEFITS

HB 131 SB 104 APPROPRIATION LIMIT HOUSE FINANCE SENATE FINANCE

FISH TAX: REPEAL MUNI HOUSE RULES BY SENATE RULES BY

HB 65 SB 63 REFUNDS/REV. SHARE


GOVERNOR GOVERNOR

HB 107 SB 96 MUNICIPAL ALCOHOL

LICENSES

REPRESENTATIVE

SULLIVAN-LEONARD SENATOR WILSON

NATIONAL RESOURCE REPRESENTATIVE SENATE RESOURCES HB 138 SB 51

WATER DESIGNATION KOPP

REPEAL MUNILEVY OF HOUSE RULES BY SENATE RULES BY

HB 59 SB 57 O&G TAX/CREDIT


GOVERNOR GOVERNOR

REPEAL STATE DEBT HOUSE RULES BY SENATE RULES BY

HB66 SB 64 REIMBURSE. FOR SCHOOLS


GOVERNOR GOVERNOR

SCHOOL BOND DEBT REPRESENTATIVE HB 106

REIMBURSEMENT WILSON

WORKERS' COMP: POLICE, REPRESENTATIVE SENATOR GRAY-HB 84 SB 107

FIRE, EMT, PARAMED JOSEPHSON JACKSON

CONST AM:APPROP. LIMIT; HOUSE RULES BY SENATE RULES BY

HJR 7 SJR 6 RESERVE FUND


GOVERNOR GOVERNOR


SJR 9 CONST.AM: APPROP. BILL

FOR PUBL EDUCATION SENATOR COSTELLO

SB 115 MOTOR FUEL TAX SENATOR BISHOP

REPEALING FUNDS; HOUSE RULES BY SENATE RULES BY

HB 130 SB 110 COMMUNITY ASSISTANCE


GOVERNOR GOVERNOR

SB 126 SCHOOL DISTRICT

SENATOR SHOWER CONSOLIDATION

HB 30 WORKERS' COMP: DEATH; REPRESENTATIVE

PERM PARTIAL IMPAIR JOSEPHSON

HJR 17 ALLOW TRIBES TO USE FED. REPRESENTATIVE

EDUCATION MONEY KOPP

HJR 16 BIENNIAL STATE BUDGET REPRESENTATIVE TUCK

NATIVE ORGANIZATIONS REPRESENTATIVE HB 142 SB 121 SENATOR KIEHL - - VPSO & TANF PROGRAMS KREISS-TOMKINS

DCC. LICENSING; MIN. REPRESENTATIVE HB 169

WAGE; LOBBYING EASTMAN

SB 102 RIP FOR PUBLIC

EMPLOYEES/TEACHERS SENATOR KAWASAKI

HCR 10 SCR 8 SPECIAL SESSION: PERM.

FUND HOUSE RULES SENATE RULES

CONST. AM: STATE TAX; HOUSE RULES BY SENATE RULES BY

HJR 5 SJR 4 INTIATIVE


GOVERNOR GOVERNOR

EXEMPT CHARITABLE HOUSE RULES BY SENATE RULES BY

HB 73 SB 69 GAMING FROM REQUEST OF THE REQUEST OF THE

PERMIT/FEES GOVERNOR GOVERNOR

PEACE OFFICER REPRESENTATIVE HB 11

RETIREMENT BENEFITS RAUSCHER


PFD/OTHER REPRESENTATIVE

HB 172 CONTRIBUTIONS TO

AGENCIES/MUNIS EASTMAN

PUBLIC REPRESENTATIVE

HB 156 SCHOOL/UNIVERSITY -- VANCE HEALTH INSURANCE

REPEAL AK PUBLIC HOUSE RULES BY SENATE RULES BY

HB 69 SB 67 REQUEST OF THE REQUEST OF THE BROADCASTING COMM.

GOVERNOR GOVERNOR

REPEAL DEBT HOUSE RULES BY SENATE RULES BY

HB 61 SB 59 REIMBURSEMENT: CAP. REQUEST OF THE REQUEST OF THE

PROJECTS GOVERNOR GOVERNOR

RESIDENTIAL BUILDING REPRESENTATIVE HB 76

CODE; AHFC; MUNIS. RASMUSSEN

REPRESENTATIVE

SB 22 SHELLFISH ENHANCE. ORTIZ SENATOR STEVENS HB 41 - - PROJECTS; HATCHERIES

TELEPHONE REPRESENTATIVE

HB 166 SB 81 COOPERATIVES;TELECOMM SENATOR HUGHES

UNICATIONS TALERICO

Four Steps to Maximize local Self-Government

Reducing t he Costs of Compliance

Unfunded and underfunded mandates limit municipal capacity to undertake service provision. A review

of State statutes reveals*** examples of un- or undercompensated requirements of local governments.

The estimated cost of these is***. Removing these burdensome regulations and developing a new

compliance reporting mechanism is a cost-effective approach to maximizing local self-government.

Municipal Services Dividend

The original formula for revenue sharing corresponded to law enforcement, health, road miles, etc. The

State could clearly see the connection between investment and responsibilities provided. Reestablishing

something similar, as a %of the POMV draw on the Earnings Reserve, would result in something like a

block grant for communities that leverages existing capacity and builds in new incentives.

Shared Taxes on Local Economic Activity

Where the State collects and redistributes taxes with local governments, that revenue is often a primary

source of funding and is used to provide for State responsibilities at the local level. It strengthens local

communities and directly corresponds to growing economies. If sharing goes away, additional taxes will

be necessary in those regions, thereby presenting a burden on that economic activity.

Negotiated Devolution of State Powers

Many State services are better provided at the local level. However, the devolution of State powers

must be negotiated and compensated. Shared taxes and the municipal services dividend go some way

toward compensation, which leaves the two parties to determine local provision of State

responsibilities. Areas where devolution make sense include law enforcement, road and airport

maintenance, and many others.

Eight Stars of Gold

The Alaska Municipal League (AML) represents the 165 incorporated cities and boroughs that are

political subdivisions of the State, and which have taxing authority and share many of the State's

responsibilities.

The Governor's 10-year fiscal plan offers four scenarios that we believe serve as extreme options that do

not represent an effective strategy for approaching this next decade or addressing Alaska's fiscal policy.

Instead of these- cuts, status quo, use of savings and earnings reserve, taxes- AML argues for a

comprehensive approach that combines these and other options available to Alaska policy makers.

AML bases the following on the approaches that local governments similarly utilize in order to mitigate

negative impacts, ensure stability for residents and businesses, and work toward community

sustainability.

* Planned reduction in State spending- a structured, outcomes-based approach to right-sizing

* Review of current revenue structure

* Implementation of new revenue, including broad-based tax

* Use of CBR earnings and/or change PF return assumptions

* Revision of statutory PFD calculation, to include caps relative to available revenue and budget

* Allocation of Earnings Reserve draw to Community Dividend

* Negotiated devolution of State powers to local governments

* Leveraged use of designated funds, increasing the return on investment where possible

In the months to come, AML looks forward to working with legislators on all ofthese. We have offered a

combination of approaches that are consistent with the vision the governor has laid out- affordability,

predictability and sustainability. That vision does require structural changes to the State's fiscal system,

and these can be negotiated with many partners, including local governments.

The strength of the State rests on the health of local governments, and local governments' strength

rests on the health of the State.

Memorandum - Unalaska, Alaska · 2019. 9. 9. · Memorandum Date: September 7, 2019 To: City...

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