Since 1985, Community Assistance payments have declined from $141 million to $30 million. We know that when this important program was temporarily eliminated in the early 2000s, 14 communities discontinued municipal operations; 18 others faced significant financial problems; and 46 more were at risk. Continued funding loss will lead to further erosion of municipal operations — with increased property taxes, loss of services, slowed economic growth, and negative impacts on public safety, education and human health. Nationally, states allocate about a third of their budgets for intergovernmental expenses and revenue sharing. In 2017, Alaska ranked 40th in terms of the percentage of its budget allocated to local governments at just 16%.
AML urges the legislature to provide adequate long-term funding for Community Assistance so that local governments can deliver the services Alaskans need and expect.
Last year, $30 million needed to recapitalize the Community Assistance Fund was vetoed. Without this money, the Fund will lack sufficient resources to give local governments the amount they received in this current fiscal year. These reductions are based on a 2009 Community Revenue Sharing statute, which envisioned a $180 million fund with annual distributions of $60 million. A base amount of $250,000 would be provided to boroughs and $75,000 to cities, with the remainder distributed by population.
In 2016, the program name was changed to Community Assistance and the fund was reduced to $90 million, with annual distributions not to exceed $30 million. As a result, funding to local governments was cut by 50% just four years ago.
If the legislature does not recapitalize the Fund this year, local governments collectively would lose another 33% in FY21. This is a short list of those impacted, and the amount their Community Assistance funding is reduced by in FY21, without recapitalization.
- Anchorage 91%
- Bethel 53%
- Cordova 30%
- Fairbanks 85%
- Ketchikan 60%
- Kodiak 52%
- Kotzebue 37%
- Juneau 54%
- Nome 40%
- Palmer 53%
- Valdez 42%
- Wasilla 62%
- Mat-Su 83%
AML Community Assistance Primer
Community Assistance Program, Statutes and Regulations
Historical and Estimated Revenue Sharing
Municipal Assistance History
Sen. Gary Stevens Legislative Research Report 2005
Sen. Gary Stevens & Rep. Bill Thomas Legislative Report 2006