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1996-06 Requesting that the Governor and Legislature Cease Making Disproportionale Cuts to Existing Municipal Revenues and Programs that Force Higher Local Taxes or Cuts to Basic Local Public Services.KODIAK ISLAND BOROUGH Introduced by: Mayor Selby Requested by: Alaska Municipal League Drafted: Mayor Selby Introduced: 03/07/96 Adopted: 03/07/96 A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY REQUESTING THAT THE GOVERNOR AND LEGISLATURE CEASE MAKING DISPROPORTIONATE CUTS TO EXISTING MUNICIPAL REVENUES AND PROGRAMS THAT FORCE HIGHER LOCAL TAXES OR CUTS TO BASIC LOCAL PUBLIC SERVICES WHEREAS, oil revenues are collected by the state government, but do not belong to the state government. Oil revenues belong to all of the people of the state to ensure a basic level of public services in all communities, whether provided by state or municipal government; and WHEREAS, state revenue sharing with municipalities is not unique to Alaska and is not an oil boom program. According to a federal research agency, every state in the United States provides some form of revenue sharing. Alaska is now below the average among the western states for sharing state revenue with its municipalities; and WHEREAS, the percentage of the state budget appropriated for municipal revenue sharing has now been cut to the same level as in 1972, well before the oil boom, when many municipalities lacked the finances to construct and support decent basic services such as water, sewer, provide adequate public safety services, and health services; and WHEREAS, since 1986 the state has shifted over an estimated $200 million costs to local taxpayers through cuts to municipal revenue sharing, transfers of state service responsibilities, and unfunded state mandates on municipalities. All sales and property tax increases among municipal governments since 1986 total only $188 million per year. Therefore, all or most sales and property tax increases paid by Alaska citizens since 1986 went to balance the state's budget; and WHEREAS, since 1986, the state has cut Municipal Assistance /Revenue Sharing by $83 million, which is approximately twice the amount of any "new tax" proposed by the Long Range Financial Planning Commission for implementation during this century; and WHEREAS, the impact of the state's cuts in revenue sharing, cuts in other municipal programs, and new unfunded mandates on municipalities since 1986 is roughly equal to taking away the value of one permanent fund dividend check from every family that pays property taxes; and Kodiak Island Borough, Alaska Resolution No. 96 -06 Page 1 of 3 WHEREAS, approximately half (or $10 million) of the actual reductions in the State's Proposed Budget for next year simply "pass the buck" to local taxpayers; and WHEREAS, the proposed state budget for next year would cut the state operations Tess than 1% while the proposed cut to direct municipal revenue sharing is 8 %, or more than eight times greater; and WHEREAS, according to the OMB Budget Report: *Direct state aid to municipalities will decrease 9.8% - Municipal Assistance (MA) - $2,556,700 ( -8 %) - Revenue Sharing (RS) - $2,101,700 ( -8 %) - Senior Property Tax Exemption - 51,163,800 ( -100 %) TOTAL - $5,822,200 *Additional cuts /transfers /new unfunded mandates to municipalities: - Transfer pupil transportation cost - $2,627,400 ( -8 %) - Municipal Lands Trust Program -$ 91,000 - Coastal Management Grants -$ 100,000 - Community Schools -$ 100,000 - Health /Social Service Grants -$ 834,900 ( -1 % to all grants) - Municipal Libraries -SLED grants -$ 75,000 -Fire Training fees -$ 180,200 - DEC landfill Permit increases -$ 400,000 (estimated) TOTAL - $4,408,500 TOTAL MUNICIPAL IMPACTS - $10,230,700 WHEREAS, cuts in municipal revenue sharing and the resulting fiscal pressures have been a major factor in municipal dissolutions. Many smaller communities are considering unincorporating and giving the responsibility for providing local services back to the state government. The cost to the state to provide services will be much higher than the cost of municipal revenue sharing; and WHEREAS, in the explanation of the proposed state budget, it states that the "Overall reduction in state aid to local governments /school districts is 1.2 % ". Schools are not a municipal aid program. The Alaska Constitution states, "The legislature shall by general law establish and maintain a system of public schools...." It is clearly a state responsibility to provide for education. The actual proposed overall reduction in state aid to local governments is actually 8 -10 %; and WHEREAS, all municipal governments balance their budgets and that many municipal governments use long range fiscal planning tools; and Kodiak Island Borough, Alaska Resolution No. 96 -06 Page 2 of 3 WHEREAS, the Alaska Municipal League and the Alaska Conference of Mayors have adopted resolutions supporting the development of a Long Range Financial Plan for Alaska, and have offered to work in partnership with the state to develop the plan; NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THAT: Section 1. The Governor and the Legislature are requested to carefully study the impact of state budget actions and avoid passing a disproportionate share of cuts, transfers, and unfunded mandates on to local taxpayers. Section 2. The Governor and the Legislature are requested to support the implementation of the "Revenue Sharing for Safe Communities" program developed by the Alaska Municipal League (AML) and the Alaska Conference of Mayors (ACoM) to improve and stabilize the current Municipal Assistance and Revenue Sharing Programs. Section 3. The Governor and the Legislature are requested to work in formal partnership with municipalities as proposed by the AML and ACoM to develop a State /Municipal Long Range Financial and Services Plan for Alaska in recognition of the fact that the state and municipal governments jointly provide Alaska's public services and that both serve the same citizens /taxpayers. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS SEVENTH DAY OF MARCH, 1996 ATTEST: (De2,0„)..et Donna F. Smith, CMC, Borough Clerk KODIAK ISLAND BOROUGH Kodiak Island Borough, Alaska Resolution No. 96 -06 Page 3 of 3