Opinion: Lost revenue is severely impacting local decisions

It’s a different kind of crisis.

  • Tuesday, May 11, 2021 10:35pm
  • Opinion

As local leaders, our job this last year has been to maintain continuity of operations in the face of significant turmoil. We’ve stepped into emergency management roles, helped to coordinate public health action, and done what we could to help local businesses. Between us, our local government budgets saw lost revenue of between 30% and 90%. We’re extreme examples of the impact of this crisis on Alaska’s cities and boroughs, even as some local governments have seen less impact. It’s been a different experience across Alaska.

This isn’t just a story of struggling governments — lost revenue for a local government is a reflection of less business activity. Our communities are hurting. Businesses have struggled through or had to cope with and prepare for the lack of a cruise ship and tourist season, or declines in fishing or retail; sometimes a combination. We know that our residents had public health concerns, too, which slowed economic activity.

We know that many businesses have been supported through successive rounds of aid — federal relief through the PPP or EIDL program, the state’s CARES grant program, and local distribution of CARES Act funds or municipal aid. That’s helped for some; others continue to struggle. Businesses have cut costs, found new ways to deliver services or goods to consumers, shifted sales online, or spent down their savings. Some didn’t make it.

When communities start losing businesses, we lose families. There’s a ripple effect that spills over into just about everything. As our local economy shrinks, community members experience uncertainty and fear for the future. Municipal officials work hard to hold the line, to preserve government services that residents depend on. One of our more important roles is to communicate hope and resilience, even as our efforts are focused on planning and action.

We’re in the midst of our budgeting processes and confronting bleak prospects. We’ll be faced with hard decisions, mostly erring on the side of doing whatever it takes to keep our community whole. We’ll tighten our belts, to the extent that we can, but at some point there’s little room left to tighten without losing something essential. We refuse to accept that fate — we know that losing essential services only increases that likelihood that residents and businesses look elsewhere to find the opportunity for lives and livelihoods they need.

We want to speak briefly about this next round of federal relief. It’s great to see the aid coming to the state, and to Alaska’s communities. We know the relief it will bring for so many of our neighbors. For our cities and boroughs, in particular, it will be nowhere near enough to cover our losses.

We appreciate the House version of the budget that recognizes our challenge, and which responds with a level of additional relief commensurate with needs that we’ve identified. First, it fully funds school bond debt reimbursement and community assistance, both of which help to avoid compounding these issues. Second, it provides targeted relief for impacted communities, alongside businesses, nonprofits, and travel and tourism. The formula for local governments is straightforward — we can demonstrate our lost revenues and additional costs, demonstrate the inadequacy of CARES Act funding and this more recent aid, and submit documentation for the difference from the state. Some of that can be made up from hold harmless of shared fish taxes and cruise ship passenger vessel fees, which the House has included. It’s a significant step toward our communities’ recovery. We hope that the Senate and governor will agree with this level of support.

Most importantly, what this does is help us contribute to Alaska being open for business. Alaska’s mayors are committed to assisting with an economic rebound for our businesses. Stable government funding and services are essential as part of this process. We want to be in a position to ensure that Alaska’s economic recovery means just as much in our communities as across the state. We know that together we can make that happen.

Clay Walker is the mayor of the Denali Borough; Andrew Cremata is the mayor of Skagway; Jim Hunt is the manager of the City of Whittier; Christy Terry is the mayor Seward; Bob Sivertsen is the mayor of Ketchikan; Clay Koplin is the mayor of Cordova; Alice Ruby is the mayor of Dillingham; Alvin Osterback of the Aleutians East Borough; Vincent Tutiakoff is the mayor of Unalaska; Steve Prysunka is the mayor of Wrangell; Douglas Olerud is the mayor of Haines; Beth Weldon is the mayor of Juneau; Rodney Dial is the mayor of the Ketchikan Gateway Borough; Joshua Bowen is the mayor of Angoon; Gerald Byers is the mayor of Hoonah; and Cindy Bremner is the mayor of Yakutat.

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