SMILE! – The Pacific High School graduating class poses outside Harrigan Centennial Hall Saturday afternoon prior to their commencement ceremony. Because of COVID-19 concerns the ceremony was not open to the public. Pictured are Eric Alvarado,Chelsea Taylor, Madison Roy-Mercer, Lindsey Bartolaba, Melissa Gibson, Douglas Johnson, Korbin Tugmon, George Stevenson, Jayvan Iya-Kowchee and Elizabeth Newell. Sitka High School will hold its graduation ceremony Monday, May 24. (Sentinel Photo by James Poulson)

Walker Vetoes Shift More Costs to Sitka

By TOM HESSE and

SHANNON HAUGLAND

Sentinel Staff Writers

A string of budget vetoes by Gov. Walker could cost the City and Borough of Sitka more than $800,000 in next year’s budget.

Walker made headlines this week when he used his veto power to limit Permanent Fund Dividend payments to Alaskans to $1,000. But it was line-item vetoes totaling $1.3 billion in cuts that have finance staff at Sitka’s city offices and the School District taking another look at their budgets. 

Chief Finance and Administrative Officer Jay Sweeney said the governor’s 25 percent reduction to the school debt reimbursement fund could take a big chunk out of city coffers. 

“That is a game changer. In my mind, if you add another $835,000 requirement to the city, that’s almost another dadgum mill of property tax,” Sweeney said. 

The state’s school debt reimbursement fund helps support the bonded capital projects used for school construction. The Blatchley Middle School remodel, for instance, was paid for by such a bond. Presently, the city pays its share of local school bond costs through the seasonal 1 percent sales tax. 

“We transfer 1 percent of seasonal sales tax in the summer to the school bond debt payment fund, and 70 percent of that debt is reimbursed by the state of Alaska,” Sweeney explained. “So in the past, the 1 percent sales tax has been more than sufficient to meet the city’s obligation.” 

If the veto survives the next legislative special session, it will dramatically increase the amount Sitka has to pay to meet its obligation. Early state numbers suggest Sitka could be spending $700,000 to make up the difference, and by Sweeney’s early estimate the number could be more than $800,000. 

“If what I think is going to happen happens, we would lose $835,050 in FY 17. We have about $1.3 million (surplus) in the school bond payment fund. So that would take a huge whack out of that. We could survive one year. But if this becomes permanent, the 1 percent sales tax would be insufficient,” Sweeney said. 

At that point, the city would have to pay bond costs out of the general fund, which is facing a potential $3.25 million deficit next year. 

City Administrator Mark Gorman said the governor’s veto adds to a trend of shifting another burden from the state onto municipalities.

    “It’s a huge hit to us on top of the other hits,” he said today. “The ‘meta message’ is revenue sharing is going to go away.”

    The Assembly is already considering putting a 2 mill property tax increase on a special election ballot to close the $3.25 million gap in the 2018 budget. The governor’s veto would increase the shortfall to $4 million, Gorman added.

    “It’s very, very worrying,” the administrator said. He added that the governor’s plan to halve the PFD would also be a big hit to Sitka, not only affecting individual citizens, but businesses and city sales tax collections as well.

    But at the same time, he understands the governor’s position in the face of the state budget crisis. The city is dealing with the same challenges, and has limited solutions available.

    “He has very few doors he can go through right now,” Gorman said. “I’m definitely empathetic.”

    Mayor Mim McConnell noted that the Assembly passed a resolution in January encouraging the Legislature to come up with a sustainable budget for the FY 2017 budget year, which starts today. 

    “We’re frustrated because that hasn’t happened,” she said today. She is now looking for another Assembly member to co-sponsor a new resolution reiterating this point, but “more strongly stated.”

The governor’s vetoes will also affect the budget in the School District office. Business Manager Cassee Olin said the district’s cuts could be over $150,000. 

The largest is a cut in the per-pupil funding formula. During the final year of Gov. Sean Parnell’s administration, Alaska approved a stepped increase in the BSA. This year’s increase was supposed to be $50, but Walker’s veto would cut that in half, costing Sitka almost $70,000 in funding. 

Additional one-time funding was cut, costing Sitka $52,000, and state support for student transportation also took a hit in the round of vetoes. Olin said that cut doesn’t affect the district’s general fund but, similarly to the city’s situation, if the transportation fund can’t meet its obligation then the district has to make up the difference. 

“If our pupil transportation runs in the red then we’d have to transfer money from our general fund to balance that, like we would with Ventures or our other programs,” Olin said. 

The difference to the Sitka transportation fund would be a loss of $48,000. 

Both Olin and Sweeney said there’s little they can do with their budgets until the Legislature revisits the issues during the special session, beginning July 11. 

“What I understand now is that the Legislature can go back and override the governor’s line item vetoes.” Sweeney said. “I think everybody is kind of in limbo over what the devil’s going on in school debt reimbursement funds.” 

Sen. Bert Stedman said he is still calculating the region-wide losses to the communities with the governor’s veto, but he’s not blaming the governor for coming up with a plan to reduce the deficit in view of inaction by the Legislature.

    “The governor has to do something if the Legislature isn’t going to act. We’re burning too much cash,” he said. “I can’t fault the governor for what he’s done. We have to come up with a solution.”

    Stedman said he was pleased with one high-ticket veto item: Walker’s decision to pull out $400 million in oil tax credits, and cut it down to the statutory requirement instead of what was submitted by the industry. 

The move was a reaction to legislation that Stedman said didn’t go far enough in cutting back oil tax credits. 

    He said he had no predictions on what will happen when the Legislature meets on the 12th.

    “I would hope this gets their attention,” he said. “No action is definitely not appropriate for the circumstances.  ... The state is in a tough spot. We’ve got to do something.”

    Overriding the governor’s veto and continuing to spend all the cash available is not a solution, and he does not believe that is the action the Legislature will take, Stedman added.

 

    “Ignoring the problem and pretending it doesn’t exist is a disastrous position to put the state in,” he said. “This should get the attention of elected officials in Juneau to take come action that would exclude inaction.”

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August 5, 2020

A Note To Our Readers

Reopening: Phase One:

 

On March 30, 2020, the Daily Sitka Sentinel began taking precautions against the coronavirus, which was starting to show up in Alaska.

We closed our building to the public and four key employees started working remotely. Home delivery was suspended to protect our carriers from exposure to the virus.

Four months later, the virus is still with us and the precautions remain in effect.

In appreciation for the willingness of our subscribers to pick up their daily paper at drop-off sites, the Sentinel was free to all readers, and subscriptions were extended without charge.

As of August 1 the Sentinel is once again charging for subscriptions, but the present method of having subscribers pick up their papers at designated sites will continue.

The expiration date of all subscriptions has been extended without charge for an additional four months.

We thank our readers for their support in these uncertain times, and especially those who paid for the paper despite the free offer.

We look forward to the time when we can safely resume home delivery.

To check on the expiration of your subscription or to make a payment please call 747-3219. The subscription email address is This email address is being protected from spambots. You need JavaScript enabled to view it. . We also will be mailing out reminder cards.

The single copy price is again 75 cents. The news racks do not require coins to open, but we ask that the 75 cents for a non-subscription single copy sale be paid with coins in the slot.

– The Sitka Sentinel Staff

 

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Alaska COVID-19 
At a Glance

(updated 5-17-21)

By Sentinel Staff

The state Department of Health and Social Services has posted the following update on the number of confirmed COVID-19 cases in Alaska as of 12:45 p.m. Monday.

New cases as of Sunday: 50

Total statewide – 66,814

Total (cumulative) deaths – 358

Total (cumulative) hospitalizations – 1,542

To visit the Alaska DHSS Corona Response dashboard website click here.

The City of Sitka posted the following update on COVID-19 cases in Sitka as of 5 p.m. Friday.

Active cases in Sitka – 7

Hospitalizations (cumulative) in Sitka – 5

Cumulative Sitka cases – 372 (325 resident; 46 non-resident)

Cumulative recovered – 364

Deceased (cumulative) – 1

The local case data are from the City of Sitka website.

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Sitka Vax Stats 

The State of Alaska DHSS reported Monday the following statistics on vaccinations for Sitka.

Partially vaccinated – 4,978 (71.64%)

Fully vaccinated – 4,612 (66.37%)

Total population (16+) –6,949

Sitka has vaccinated (with at least one dose) 1,245 (84.24%) of its senior population (1,478 total), age 65 and older. 

Vaccination data for the City and Borough of Sitka can be found online at: https://bit.ly/3apStpb

 

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20 YEARS AGO
May 2001

Sitka High boys track team ran to a 2nd-place finish in Juneau while the girls finished fourth. Sitka long-jumper Derek Hirai leapt 19’9.5” for the 2nd highest jump in the state this year. ... Others doing well were Thor Hartwig, Matt Mangini, Damien LaMar, Jeff Loiselle, Logan Wild, Elgin Hollins, Brian Friske, Brian Mork, Mike Bagley, Cody Campbell ....

50 YEARS AGO
May 1971

New Loyal Order of Moose officers, installed Saturday, are Earl Arnold, Grant Laiblin Jr., James Gardner, William Wakefield Jr., Eddielee Hodnett, Basil Riley, Lloyd Van Doren, James Firestone Sr. and Lynden Kincaid.

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