Sen. Kim Elton's 4/30 KINY Radio Address

April 30, 1999

Juneau--This is Senator Kim Elton, reporting on the 102nd legislative day.

Although adjournment is just three weeks away, we had very little movement this week on any of the major issues which must be resolved before we go home. The conference committee on the operating budget met but substantive debate on differences between Senate and House budgets won't begin until next week. Differences between the House and Senate are dramatic in several areas, including funding for municipal assistance. The House completely eliminated aid to local government while the Senate cut on-third, from $48 million to $32 million.

It's not surprising the Senate gave in to political pressure on this issue, because the reduction of municipal assistance mans a tax increase for local property tax owners. In fat, since 1986, every dollar paid by Alaskans in increased property taxes is approximately equal to state cuts to cities.

The state began sharing revenues with cities in 1969, well before oil revenues began flowing into the state treasury. Unfortunately, the proportion of the state budget currently used for revenue sharing with cities is less than it was in 1971. On average, western states provide 42% of local governemtn revenues through municipal assistance. Seven years ago, Alaska provided only 36% of loval government revenues, and today it is far less than that. Next year, it may be nothing.

The bottom line for individual Alaskans has gotten decidedly worse. Local taxpayer contributions for schools grew over 200% faster than state aid to schools. While inflation averaged about 3% per year, the state made no significant inflation adjustments to education funding. Schools were squeezed, local governments were squeezed, and taxpayers had to cough up the money to make it work.

But that's nothing compared to what will happen if the conference committee decides to follow the House lead and eliminate municipal assistance. Here in Juneau it will mean either a whopping big local tax increase, or reductions in services like elimination of snow removal on weekends, reduced bus service, library closures, lay-off of police officers, and elimination of Medivac services to nearby communities.

The options are few and they're not pleasant ones: either pay more, or receive less. So it's no wonder it's been a quiet week as Majority members rest on the horns of this painful budget dilemma.

This is Kim Elton. Thanks for listening.

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