By Marcia Kuszmaul

Homer Independent Press

Potential reductions in state spending on community jails and revenue sharing raised concerns at Monday’s Homer City Council meeting. 

The city’s Juneau lobbyists, J&H Consulting, said the Legislature is considering a 40 percent reduction in funding for community jails and a cut of one-third to the Community Assistance Program.

The council raised both issues with Sen. Gary Stevens, R-Kodiak, during his Zoom update at the council’s regular meeting. 

Senator Gary Stevens zoomed in to the Homer City Council regular meeting, March 23, for a legislative update. (Photo by Marcia Kuszmaul/Homer Independent Press)

Fiscal concerns

Faced with the prospect of reduced funding for the Homer jail, Mayor Rachel Lord told Stevens, “That is significant . . . we fight for the state to continue to participate in helping to fund prisoner care that is very expensive.”

Lord pointed out that a number of communities providing  jails need assurance that the legislature doesn’t “cost shift further onto the municipalities for these shared services.”

Councilmember Donna Aderhold asked Stevens about the reduction in community assistance, “or, as it’s better named, revenue sharing.”  “It’s really important for municipal budgets . . . . It takes care of some of those unfunded mandates from the state.”

Homer receives close to $625,000 annually from the jail contract and received $143,428 in FY25 and $98,130 in FY26 in Community Assistance grants for capital projects.

Having been a city and borough mayor on Kodiak, Stevens said he knows communities “can’t be expected to pay the debt for the state” and how important revenue sharing is. 

“It has our attention, and we’ll do the best we can,” Stevens said. 

Stevens also reviewed highlights from his March Capitol report, emphasizing:

• The impact of the war in Iran on oil prices and state revenue, 
• Legislation to step down state appropriations from the Permanent Fund, 
• Uncertainty regarding cost of the gas pipeline and related property tax issues,
• A proposed  education omnibus bill that slightly increases the base student allocation (BSA) for inflation and increases pupil transportation, and
• Discussion around a defined-benefit pension program for state employees to help recruit and retain state employees in crucial positions.

Stevens emphasized the urgency for the House to pass the supplemental budget, which includes a $70 million match to get $700 million in federal funds for road and bridge construction this summer. A budget bill passed the Legislature Wednesday, but minority House members – including Homer’s other legislator, Rep. Sarah Vance – blocked a Senate-approved plan to tap state savings to pay for new spending.

Stevens  voiced support for Senate Bill 130, which provides a tax credit for the development of value-added fisheries products. 

J&H Consulting’s full report covered many of the same issues as Stevens’ and included:

• Homer officials met with more than 13 legislators in their trip to Juneau in February, visited Departments of Transportation and Environmental Conservation and toured the Alaska Marine Exchange.

• With new revenue projections due in large part to high oil prices, a draw down of the Constitutional Budget Reserve may not be needed to cover the supplemental budget.

• If there are discretionary funds for a capital budget, legislators want to focus on deferred maintenance for schools, state-owned assets and the university.

• J&H said the Homer harbor project is “well socialized” in Juneau and well positioned to be included should there be a General Obligation bond.

J&H’s full presentation is available in the March 23 Committee of the Whole packet on the city website.

Grant opportunity for rural health

On the bright side, Stevens reported on federal money coming to Alaska under the new Rural Health Transformation Program. He said the state has already received 1,700 “letters of interest” from groups interested in the program, which will bring $272 million a year for the next five years to improve rural health.

“The big issue for me is that we want to make sure that after those five years . . .   we actually have an improved health care system,” Stevens said. “If we’re no better off than we are right now, then it’s been a waste of time and (a) waste of money.”

In e-mail exchanges, Hannah Gustafson, coordinator for SKP Resilience Coalition, said she is aware of more than 20 letters of intent from the southern Kenai Peninsula. Derotha Ferraro, director of public relations for South Peninsula Hospital, said the hospital itself submitted 11 and three more in collaboration with other organizations.

The Alaska Department of Health website explains that the Alaska Community Foundation will review and categorize the submissions before the department’s review and direction on how to advance to the next stage.

This week the state started hosting webinars, organized by the grant’s various focus areas. On April 30, Central Peninsula Hospital in Soldotna will host the first of the department’s regional gatherings to further the program.