Community Perspectives

State must restore financial aid to Alaska’s communities

I had the opportunity recently to speak with Gov. Mike Dunleavy as part of the Alaska Municipal League’s legislative conference and as a member of AML’s board of directors. I’m encouraged by the level of responsiveness of the governor and the amount of time that he spent with us. As many of you know, I’ve said several times that sitting down with local elected officials is an expectation I have of that office.

The governor listened to a number of the concerns that we voiced and answered questions related to priorities of Alaska’s local governments. Again, I appreciate his engagement, and, while we may disagree about some issues, getting to the table is critical.

One of our priorities at AML is the continued funding for Community Assistance, a state program of revenue sharing that keeps the lights on in many communities. The governor’s veto of $30 million during this last budget cycle resulted in a failure to recapitalize the Community Assistance Fund, which by formula means a reduction of one-third in payments to communities in fiscal 2021. The way the formula works, all communities are reduced to their base levels, and per capita additions are eliminated. This means for Fairbanks that instead of receiving $524,989, the city will receive $93,727 — a reduction of $431,262 — if nothing changes.

I made the comment to the governor that for the city of Fairbanks I often don’t even budget for Community Assistance anymore. While that’s true, it isn’t an indication of a lack of need or an acceptance that our share should be reduced so greatly. The reality is that Community Assistance was reduced by 50% just five years ago, and the result of continued reductions and cost-shifting at the state level has resulted in a lack of faith and trust in the state’s commitment to local governments.

I don’t want Fairbanks to be in a position of dependence, and I budget accordingly. That means that Community Assistance becomes an addition to our budget that allows us to respond better to the needs of residents, accommodating unexpected shortfalls, enabling greater flexibility to address capital or maintenance needs, and shoring up programs that are important to us, including our Police Department and Fire Department, as well as our very important Emergency Service Patrol. Without Community Assistance, there is downward pressure on all of these.

While I can point to the immediate needs of Fairbanks, I’m also cognizant of the needs of the rest of the state. There are 20 communities for whom Community Assistance represents more than 25% of their budget and 57 where it represents from 10% to 25%. It is not insignificant, and any decrease means that some of these communities risk shutting their doors, eliminating programs, cutting staff or increasing taxes where that’s even possible.

Community Assistance must be kept whole if our communities are to remain viable institutions delivering essential, quality services to our residents. I firmly believe that in this year’s budget the Legislature must make up the difference, which I hope the governor will support.

Fairbanks city Mayor Jim Matherly was elected to a second three-year term in October 2019.

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