Nils Andreassen

GUEST COMMENTARY: Time needed to ensure best use of CARES Act funds

It’s too early to ask where CARES Act funding has gone, or what impact it has had. We know the various priorities it was allocated to, each at various stages now in their distribution. What’s been common across implementation is that it takes time to design effective programs and ensure that funds meet Alaskans’ needs. That’s where most Alaska municipalities are: reviewing grant agreements and budgets, developing a common-sense plan to appropriately manage this federal assistance, and listening to local businesses and residents to learn where priorities lie. Taking on $568 million in liability is not something that local governments do lightly. There is a clear understanding that until everyone has worked through what is allowable and then what is necessary there cannot be action. Ultimately, there can’t be quick action when local governments are working carefully through federal and state restrictions on how funds can be spent. So where is local government CARES Act funding? Right now, the state has distributed about a fifth of it — and expect as much as half very soon — to nearly 100 local governments. Those local governments are very often placing these funds in separate accounts to ensure proper accounting; they are implementing separate accounting to track expenditures. Local governments are acting as good stewards, ensuring that they can report back to the state, federal government, and ultimately Alaskans, that these funds have been carefully managed. While it may not seem like there is quick action, there is definitely action. And it’s really kind of exciting to see cities and boroughs stand up to this challenge. What makes implementation of the CARES Act funding different than other types of funding is that much of it can’t simply help local governments meet their own needs. Those needs during the public health crisis include significant lost revenues, which isn’t an allowable expenditure. They are able to use these funds on some limited items that will help with public health and safety, and measures that help with mitigating the spread of coronavirus. This means that for the remainder of the funds, local governments are determining how to meet community needs. We know that many businesses are struggling or at risk of failing, an increased number of residents may be unemployed or furloughed, nonprofits may have been limited in their operations or expanded them; hospitals, schools, the university and so many other essential community assets have been impacted. Municipal officials are assessing these impacts and developing processes to distribute funds in support of keeping the lights on, at least. It’s also a time to invest in programs like childcare, food and support for vulnerable populations. Across the state we’re seeing innovative programs that are new and different to many local governments. An estimated 40 cities and boroughs will implement some kind of grant program, redistributing their funds to businesses, nonprofits, and other organizations in the community. As many as 100 more may be considering ways to help offset utility bills, providing subsidies to residents to maintain water, sewer, and electric connections. Some may be looking at working with AHFC or offering their own rent and mortgage relief programs. Municipalities are assessing barriers to reopening, including childcare, and looking at how to provide funds for those operations. There are discussions of providing incentives for face coverings, testing, and other public health compliance. Public facilities may undergo transformations so that they can operate and ensure community members can stay safe; that includes pools, community centers, city halls, and libraries. Communities may need to build or purchase facilities for quarantine or emergency operations. Yes, these will all take time to implement. But local governments are moving decisively to meet the immediate needs of residents and the overall interests of communities. It’s also true that the public health emergency isn’t over; many are preparing to be able to meet additional needs over the course of this year. There’s a common acknowledgement that while CARES Act funds won’t meet all the needs of local governments and their budgets, right now the priority is to leverage these funds in a way to meet the needs of communities. Keeping communities whole during this crisis — businesses operational, services provided, residents employed, families supported — is how we’ll measure success. Nils Andreassen is the Executive Director of the Alaska Municipal League, a service organization for 165 city and borough members. AML’s mission is to strengthen local governments. He is also a member of the Juneau Downtown Rotary, a board member of Commonwealth North, and a Commissioner at the Denali Commission.

GUEST COMMENTARY: Impacts of budget cuts at a local level calls for negotiated solutions

There’s a lot of good work being done to measure the impact of the Governor’s proposed 2020 fiscal year budget and produce a measured response. The Alaska Municipal League has worked to answer the questions that both Senate and House Finance leaders have asked – what will be the impact to Alaska residents, local governments and the economy? We can answer those questions when it comes to municipalities, and we can walk through the implications at the community level for residents and businesses. The governor’s proposed budget amounts to cuts (with direct and indirect impacts on local governments), cost-shifting (State responsibilities now asked of local governments) and clawbacks (preemption of local taxing authority) that amount to nearly $900 million as an impact to local governments. That’s just for the 2020 fiscal year. The proposal to repeal school bond debt reimbursement will shift another billion dollars to local governments over the coming decade. Further, the proposal that the Power Cost Equalization endowment (that’s earned 8 percent on average over the last 10 years) be swept into the general fund (where it would earn less than 2 percent on average of 10 years) is a billion-dollar impact. We can estimate the secondary impacts of cuts to the University and the Marine Highway System based on the economic impact they both have, and apply that to local government property and sales taxes, at roughly $20 and $9 million respectively. While Community Assistance — which keeps the lights on in many city offices around the state — has been reduced by 946 percent since 1985, adjusted for inflation, the governor has proposed that this be cut by another 30 percent next year. While the state does less with less, responsibilities can’t be shifted beyond the local level. Municipalities will have fewer options to deal with these proposals that result in roughly a $1,500 per capita impact or a 51 percent increase in local taxes or decrease in services. The impact is more than 50 percent of nearly 20 local government budgets, and more than 80 percent of 10. We know that for those local governments that face cuts of that size, history has demonstrated that they very likely cease operations. Our members have looked at this in each of their communities and provided some analysis of the trade-offs. There are three basic options at the local level: 1) increase or add new taxes, 2) reduce or eliminate services, or 3) try to make it work out of existing revenues. Reduction or elimination of services fall into basically three buckets: public works, public safety, and quality of life programs. Municipalities have said that while quality of life programs would be the first to go, public safety and public works budget would plausibly see reductions. An analysis of just one element — the state forgoing reimbursement for school bond debt — shifts $100 million back to 19 local governments. Local governments have overwhelmingly said they would need to increase taxes to make up the difference. That doesn’t just equate to a portion of a property owner’s PFD. For the largest commercial property owners, increases are substantial and will determine just how open for business Alaska is. Just for school bond debt reimbursement: Increased property taxes in the Matanuska-Susitna Borough will fall on Mat-Su Regional Medical, Enstar, Fred Meyer, Alaska Hotel Properties, and GCI, and amount to $547,944. Increased property taxes in Fairbanks will fall on Alyeska Pipeline, Fort Knox, Doyon Utilities, Alaska Communications, Petro Star, GCI, and Flint Hills, and amount to $1.85 million. Increased property taxes in Anchorage will fall on GCI, Alaska Communications, Alaska Regional Hospital, Providence Medical Center, Fred Meyer, Enstar, Hickel Investment, Alaska Airlines, BP, Dimond Center, and JL Properties, and amount to $1.52 million. Local governments have said that in response to the proposed budget, they would leverage every available option, and the combination of choices they have is the best way to mitigate negative impacts. We have had numerous reports from mayors and managers that describe the micro level implications of cuts and cost-shifting, which go beyond statewide employment. We know that in many of our communities, there’s a feedback loop between employment and quality of life, which attract families and businesses, which strengthen the community and economy. Decreased services result in the erosion of both. Yes, Alaska has a fiscal challenge. That won’t go away when the State shifts the burden to local governments. AML is looking forward to working with State leaders, developing better solutions, together. Nils Andreassen is the executive director of the Alaska Municipal League.

GUEST COMMENTARY: A new — and improved — Northern Forum is necessary

The Northern Forum — a nonprofit, international association — was formally established in 1991 with eleven regional members from nine northern countries. Its intent upon forming was to improve the quality of life of northern peoples by providing northern regional governments a means to share their knowledge and experience in addressing common challenges.  As Gov. Bill Walker resumes talks with the Northern Forum, we wanted to remind Alaskans of what the Forum is, and more importantly, what it could be. All inaugural members agreed that the future held boundless potential for the Arctic and that together, the northern regions could overcome the challenges that each were facing. They hoped that the Forum would generate international awareness, respect and legitimacy for the issues northern communities face. While in its early years the Northern Forum certainly accomplished this, the reality is that the Forum’s efficacy has waned in the recent past. The creation of the Arctic Council in 1996 certainly had a lot to do with this, as eight nations came together to address sustainable development and environmental protection. The inclusion of Permanent Participants, who represent indigenous groups, in that body, as well as the increase in observer states and organizations over the years, resulted in the Arctic Council becoming the face of the Arctic in the public’s mind. Even as the Arctic Council has moved forward as the intergovernmental forum in the Arctic, so have increasing calls for more local input, regional participation, and inclusiveness. That said, the Arctic Council will remain the focal point for international cooperation into the future, even as the future of Arctic governance truly rests in the concerns and capabilities of local or regional collaboration, which is where the Northern Forum has a greater role to play. Without formal and active engagement between the Arctic Council and the Northern Forum, efforts by either to address the economic, living, cultural and environmental conditions of northern peoples will fall flat. In place of repeated calls for the Arctic Council to open its doors and for inclusion and transparency, we argue that that the current capabilities within the Northern Forum be harnessed to address this gap. The Northern Forum is already an “observer organization” to the Arctic Council and provides the means for regional inclusion and local investment in the Arctic Council. The challenge is to fully realize that potential. We hope that the states, territories and other regional governments of the North can come together in a “New Northern Forum.” A Northern Forum with full participation across the Arctic, with active leadership from northern governors and premiers, and with robust participation in the Arctic Council would bring the reality, richness and responsibility of the Arctic back to the peoples of the Arctic. It will take careful leadership from current and potential Northern Forum members to right the ship and steer it through this uncharted territory. It will take intentional collaboration between regional governments — each of which have pressing domestic concerns — but the long-term benefits will outweigh the costs as together northern peoples articulate very clearly shared and individual perspectives and priorities, and work to bring these and local assets into the outcomes of the Arctic Council. At the same time, there are best practices that the Northern Forum can apply in the short term that will resonate with a broader membership and make its actions more effective. These include: • Establishing a regional Secretariat in North America, the Nordic Arctic and Russia that can support a diverse membership • Lowering membership fees to better attract regional governments, even as increased outreach is conducted to bring in local governments and the business community • Developing and implementing a strategic plan that corresponds to the vision of northern governors, premiers and regional policymakers A New (and Improved) Northern Forum has the potential to fully represent northerners in the policy-relevant discussions taking place at the Arctic Council. This step will also help realize the Arctic Council as a “model of cooperation” even as it advances local governance, which will be a critical element of the future of the Arctic. Alaska’s Governor — and others — will need to act to fully leverage this opportunity. They can do this by working together within the Northern Forum structure, reinvigorating and investing in this body in a way not seen since Gov. Hickel. The founding members of Northern Forum included: Yukon; Heilongjiang Province; Lapland; Hokkaido; Dornod, Mongolia; Trondelag and Tromso, Norway; Chukotka Autonomous Okrug and Magadan Oblast, Russian Federation; the Republic of Korea; and Alaska. Alaska State Sen. Lesil McGuire is the current co-chair of the Senate Special Committee on the Arctic and the former co-chair of the Alaska Arctic Policy Commission.  During her tenure as president of the Pacific Northwest Economic Region she established the Arctic Caucus where she serves as co-chair. Nils Andreassen is the executive director of the Institute of the North, an independent nonprofit organization whose mission is to inform public policy and cultivate an engaged citizenry. The Institute has a legacy working on Arctic infrastructure priorities and policies that serve to strengthen and connect northern communities. 
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