Mayor to Eaglexit: ‘Show me the money’

Thursday, November 7, 2019 - 17:44
  • Anchorage Mayor Ethan Berkowitz speaks to the Chugiak-Eagle River Chamber of Commerce on Wednesday, Nov. 6, 2019 at the Matanuska Brewing Company in Eagle River. (Matt Tunseth / Chugiak-Eagle River Star)

Anchorage Mayor Ethan Berkowitz says he’s all for smaller government but isn’t convinced Chugiak-Eagle River residents would be making a wise decision by breaking away from the municipality.

“Interesting conversation,” Berkowitz said Wednesday at the Chugiak-Eagle River Chamber of Commerce lunch forum in Eagle River. “Show me the money.”

Berkowitz spoke on a wide range of topics during a speech to the chamber. He said the muni is in good financial shape despite continued reductions in state revenue sharing and touted increases in the size of the Anchorage Police Department. But it was perhaps his thoughts on Eaglexit — the name chosen by locals exploring the idea of detaching Assembly District 2 from the muni and forming an independent government — that drew the most interest from the large crowd gathered inside the Matanuska Brewing Company.

The diminutive father of two opened his comments on the matter with a dad joke.

“Well, I’m 5-6, so I’m a big believer in smaller government,” he said.

Kidding aside, the second-term mayor said he thinks Eaglexit supporters face a serious economic challenge.

“All the studies I’ve seen say the cost would result in an increased cost to the people who live here,” he said, pointing out that a new city would need to create its own police force and administration — things Chugiak-Eagle River residents already have at City Hall.

A study conducted in 2007 by Anchorage economics firm concluded a detached Chugiak-Eagle River would be unable to preserve services without raising taxes. However, backers of detachment have said they believe they can create a more responsive and efficient local government through greater self determination. Among the ideas they’ve floated would be to create public-private partnerships, which they say would reduce costs through outsourcing.

The effort has drawn visible support in Eagle River, where large yard signs have been popping up at locations around town. The group has held two informational meetings, with another planned for tonight at 7 p.m. at the Eagle River Lions Club. They’ve also got a website (eaglexit.com), which includes videos of past events and more information about the group.

But it’s also drawn criticism, and last month residents of Eklutna Valley — one of the Chugiak-Eagle River area’s six community councils — passed a resolution opposing the idea unless backers can show it would keep existing services without raising taxes.

Budget battles

Berkowitz’s comments came at the end of a speech during which he said the municipality is “running balanced budgets”, has a AAA bond rating and has added around 100 police officers in recent years. He said the municipality now has about $180 per person in bond debt, compared to more than $400 per person in the 1980s.

“We just keep chugging along,” he said.

That’s in spite of Legislatures that have continually reduced the amount of money going to local municipalities, he said.

Berkowitz used his speech to again tout a plan he’s long championed that would use a “Percent of Market Value” (POMV) formula to the Alaska Permanent Fund. He said such a plan would take about 5% of the fund annually and give 45% to pay dividends, 45% for state government and 10% for community dividends. That would allow for consistent PFD payments as well as long-term fiscal sustainability.

He said such a plan would remedy a situation in which the state continues to put more of the funding burden on cities and towns across the state.

“They can’t ask local governments to assume more and more responsibility,” he said.

Berkowitz said he’s proposing a 2020 budget in December that’s likely to increase people’s property taxes by about $20 per household. However, he also said he believes the muni is as lean as it can be and has been investing its money in the right places.

“Anchorage is in a much better place than we would have been had we not made those investments.”

Email Star editor Matt Tunseth at [email protected] or call 257-4274.

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