CITY OF HOMER

HOMER, ALASKA

Fenske

RESOLUTION 02-20(A)

A RESOLUTION OF THE CITY COUNCIL OF HOMER, ALASKA, SUPPORTING A LONG RANGE FISCAL PLAN THIS YEAR THAT ENSURES A STABLE FUTURE FOR ALL ALASKANS BY PROMOTING AFFORDABLE STATE AND LOCAL TAX LEVELS CONSIDERING ALL FORMS OF STATE REVENUE AND PROVIDING ADEQUATE STATE AND LOCAL SERVICES.

WHEREAS, One dollar out of three spent this year in the State General Fund budget ($865 million out of $2.4 billion) is projected to come from Alaska's savings; and

WHEREAS, According to the Alaska Department of Revenue, by mid-year 2004, the fiscal gap is projected to be over $1 billion and Alaska's savings account: (Constitutional Budget Reserve) will be fully depleted if action is not taken this year; and

WHEREAS, If nothing is done and a $1 billion fiscal gap occurs in 2004, local taxpayers will be forced to choose between severely reduced public services or massively increased taxes to cover the cost of schools, roads and other state services. For example, in order to generate $1 billion, it would require cutting the equivalent of all funding for schools and the university, the largest state single budget item, ending the PFD program, implementing a 14% state sales tax (food/medical exempted); and

WHEREAS, The state should continue to implement efficiencies and reasonable service reductions, but also recognize that reductions alone cannot solve the magnitude of the projected fiscal gap. In addition, certain services, such as deferred maintenance of state facilities, including schools and roads, will require additional funding; and

WHEREAS, A long-range fiscal plan should have the following guiding principles, provide financial stability, be sustainable, advance financial investment policies that maximize returns of the state assets and be fair; and

WHEREAS, If action is taken this year, Alaska can avoid depleting the Constitutional Budget Reserve, and use this last savings account to act as a cushion for Alaska to avoid harsher cuts, higher taxes, and/or greater use of Permanent Fund earnings to solve the fiscal gap.

NOW, THEREFORE BE IT RESOLVED, that the Homer City Council supports a long range fiscal plan this year that ensures a stable future for all Alaskans by promoting affordable state and local tax levels considering all forms of state revenue and providing adequate state and local services; and

BE IT FURTHER RESOLVED that the Homer City Council encourages all citizens to contact the Governor and their legislators and urge them to take action this legislative session to adopt a fiscal plan that avoids a fiscal crisis in 2004.

PASSED and ADOPTED by the Homer City Council this 11th day of March, 2002.

CITY OF HOMER

ATTEST: ___________________________

JACK CUSHING, MAYOR

___________________________________

MARY L. CALHOUN, CMC, CITY CLERK

Fiscal Note: NA