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15 Years Ago in the Arctic Sounder

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Smaller cities bear brunt of state municipal aid cuts

April 15, 1999

By Charles Bingham

Alaska Newspapers

ANCHORAGE — Officials from many of the state's city and borough governments said they will feel the brunt of a proposal to eliminate $47.8 million in state revenue sharing and municipal assistance funds from the state's fiscal 2000 operating budget.

The House Finance Committee proposal, passed April 9, would eliminate the two programs. Local officials said they would be forced to raise local taxes or cut services in order to balance their own budgets. Several mayors and city administrators said the cuts are so severe they'd be forced to consider dissolving their cities entirely if the legislature approves the plan. In a Monday vote before the full House, an amendment to the Finance Committee's revised budget that would reinstate the program failed by a 25-15 vote. The Senate must also pass the budget once the House approves its final version, so there is still a chance the programs could be reinstated.

Rep. Mary Sattler-Kapsner, D-Bethel, argued the programs should be restored to the budget in Monday's debate. She said the cuts were especially harsh on the smaller communities in the state, many of which face few alternative revenue sources and have no time to prepare for such a deep cut. The proposal to eliminate the two programs was first discussed 10 days before Monday's vote. She compared it to the subsistence economy, where 70 percent of the resources are harvested by 30 percent of the people, but the resources are still shared across the entire community.

"Never once have I heard of an instance where a hunter withheld game because he wanted them (the community) to share his pain," Sattler-Kapsner said. "That would be unconscionable. We're sitting on a powder-keg of poverty and resentment, and a cut like this is sending the wrong message to the people."

According to a fax from Bill Rolfzen of the Department of Community and Regional Affairs Division of Municipal and Regional Assistance, which administers the two programs, roughly $47.6 million was distributed to 161 municipalities during fiscal 1999. He said the programs funded a small percentage of larger city and borough budgets, but in some smaller communities the two programs provided well over 50 percent of their local budgets. The two programs represented more than 80 percent of the budgets of Manokotak ($45,400 in state funding) and Bettles ($35,014), and more than 70 percent of the budget for Delta Junction ($63,581). "In over 40 of the smaller cities, this funding represents more than 30 percent of the total operating budget," Rolfzen wrote. "Because there is virtually no additional capacity to generate local revenues, many of these local governments will no longer be able to afford to function. We can expect a wave of municipal legal dissolutions, or worse, local residents simply walking away from their local governments."

Emmonak City Manager Walter Kloepfer said his community stands to lose 15 percent of its annual budget. He said Emmonak is part of the Wade-Hampton District, which has the lowest per-capita income in the state, and the cuts would mean the loss of 10 full- and part-time jobs with the city. The lost jobs would be in the police department, water plant, public works, sauna/Laundromat, and accounting. He said the cuts will prevent the city from contributing to the Emmonak Women's Shelter, which assists women from six communities, and they will affect road repairs, equipment maintenance and repair, building repairs and "most certainly the closure of the sauna/Laundromat."

"The alternative of increasing prices to make up the difference is impractical," Kloepfer wrote in a letter to the House Finance Committee. "After an already accepted disastrous fishing season where little to no income was generated, an increase would make the services, such as water and sewer, too expensive for many, if not most, of the residents. This would only hasten a return to the 'honey bucket' that this state has tried to eliminate."

Atka City Administrator Julie Dirks said her town's budget also stands to lose about 15 percent of its funding, or $35,696. She said that money funds periodic grading and snow removal on 18 miles of local road ($11,000), subsidizes the housing and office expenses of the state-funded village public safety officer ($5,000), maintains a fire truck and ambulance for emergencies ($ 1,000), provides twice-weekly garbage service ($5,350), pays the wages of a part-time employee to maintain the water and sewer system ($5,500), and provides water testing and water treatment supplies ($3,000).


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