Constitutional Provisions Regarding Boroughs
January 25, 2005
Noting that more than 57 percent of Alaska - an area larger than France and Germany combined - lies outside any organized borough, Local Boundary Commission Chair Darroll Hargraves noted that the report stresses that legislative attention is warranted. "Our Constitution encourages borough formation and annexation for many good reasons - none greater than it promotes maximum local self-government" Hargraves observed.
The report characterizes borough government as the cornerstone of the constitutional provisions for local government in Alaska. Echoing sentiments consistently expressed by experts over Alaska's 46 years of statehood, Hargraves said, "The Commission believes the State has yet to develop an effective policy of implementing borough government."
Hargraves concluded that there are three fundamental options. The first is to maintain the status quo borough formation by local choice. He noted that since statehood, this approach has resulted in boroughs in which less than 4 percent of the State's population resides. No new borough has formed in more than 12 years. Hargraves stated that the Commission believes that the status quo is minimally effective because of the lack of incentives to form boroughs.
The second option is for the legislature to mandate borough government in those areas that have the capacity to operate boroughs. Hargraves noted that the 1963 Legislature mandated the formation of boroughs in which nearly 84 percent of Alaskans live today. However, Hargraves stressed that while the second option is effective, it is also divisive.
The third option - and the one preferred by the Local Boundary Commission - is to provide incentives to promote borough formation. Hargraves stressed that the framers of Alaska's Constitution envisioned that the State would provide adequate incentives for borough formation. Hargraves noted that the Commission has outlined six specific incentives for consideration by the legislature.
Hargraves indicated that "The Commission believes that, perhaps, the greatest barrier to borough formation is the requirement that boroughs must pay to support schools." While repealing the requirement for local support of schools would eliminate the disincentive, the Commission notes that doing so would greatly impact the State treasury.
One alternative would be to eliminate the disincentive by levying equivalent taxes on the unorganized borough for support of schools. Four different tax options are addressed in the report. The report points out, for example, that a head tax on the unorganized borough, equivalent to the taxes paid by residents of organized boroughs for support of schools, would generate between $15 million and $23 million annually, depending on policy decisions regarding applicability of the tax.
Five other incentives are addressed in the report. They relate to financial aid for critical borough services; organization grants; calculation of required local contributions for schools where boroughs do not levy property taxes on oil and gas exploration, production, and pipeline transportation property; municipal land grants; and payment of National Forest receipts and shared fisheries fees and taxes.
Another major focus of the Commission's report is the need to divide the single unorganized borough into multiple regional unorganized boroughs in accord with the Constitution. The Commission, working in concert with former State Sena-tors and local government experts Arliss Sturgulewski and Victor Fischer, crafted legislation for consideration by the legislature to address the issue.
The Local Boundary Commission consists of five members appointed by the Governor. One member is appointed from each of Alaska's four Judicial Districts. The Chairperson is appointed at-large. Representing the First Judicial District, Ketchikan, is Georgianna Zimmerle.
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