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Governance in Anchorage

In this section, we will take a look at the governance of Anchorage.  To do this, we will first look at the organization of state and local government in Alaska as a whole, and then look at how Anchorage fits into this picture.  With this information, we can look at some of the roles of the municipality government and how these roles are funded.  Finally, we will look at some of the problems facing the Metropolitan area.

The state of Alaska is comprised of two types of municipal governments: cities and boroughs.  In Alaska, a "city" is a "municipal corporation and political subdivision of the State of Alaska" (Bockhorst 1).  Also important to note, a city is comprised of a single "community".  In Alaska, the three different classifications of cities are home rule and first and second class (Bockhorst 3).  Home rule cities, as in their name, have the ability to create local legislation (limited by the State) while first and second class cities are subject to the "general law" of the borough in which it is located (Bockhorst 3).  In 2000, there were 145 city governments accounting for 25.7% of the state's total population of 628,000 (Bockhorst 1).


The state of Alaska is presently comprised of 16 organized boroughs.  These boroughs are inhabited by 86.8% of Alaska's total population.  Further, these organized boroughs "encompass about 43% of the geographic area of Alaska" (Bockhorst 2).  The remaining land area is an "unorganized borough".  This unorganized borough covers a massive 374,843 square miles, but was home to only 83,136 residents in the year 2000 (Bockhorst 2).  This land area is roughly the size of the American southeast or larger than Texas and Oklahoma combined.  The average size of the borough is roughly 17,400 square miles, however, it is important to recognize that six of boroughs vary considerably (Bockhorst 2).  The North Slope Borough covers 93,823 square miles while the Bristol Bay Borough covers 918 square miles (Bockhorst 2).

While we see these large boroughs comprising 86.8% of Alaska's population, it is important to note that roughly 45% of Alaska's total  population lives in the "Municipality of Anchorage" Borough.  This borough encompasses 1,697 square miles (community database) making it larger than the state of Rhode Island.  So, under Alaska Law, Anchorage is formally a borough, not a city.  Further, the Municipality of Anchorage is its own census area (Census).  In the state of Alaska, the Municipality of Anchorage is known as a "unified home rule" borough.  This organization of government covers the roles that are often split by county and city governments in the "lower 48" of the United States.  Under Article X, Section 11 of Alaska's Constitution, "a home rule borough or city may exercise all legislative powers not prohibited by law or charter" (Bockhorst 8).  In Alaska, a home rule charter promotes the maximum level of local self government allowed for under the Alaskan Constitution (Bockhorst 8).  However, becoming a home rule borough comes with a number of required duties beyond their fundamental obligation to conduct elections and hold regular governing body meetings.  In talking about government services, a discussion about how they are paid for should follow.  On a state level, Alaska is among the few states in the nation with no state sales tax.  Local city and borough governments have the power to levy a sales tax, but only a few have done so and Anchorage is not one of them.  Also, Alaska residents do not pay an individual state income tax; the state government operates off state oil revenues.  The majority of tax revenue for Anchorage (along with the majority of local Alaskan government and like typical local governments in the "lower 48") comes from property taxes.  As provided for under the Alaskan Constitution, a unified municipality and/or home rule borough is "limited to 30 miles except where a higher levy is necessary to avoid default on debt; voter approval to levy property taxes is required by some (local) charters (Bockhorst 20).  Anchorage is included in the list of charters that require voter approval.

"Unified Home Rule"

We have already pointed out an important dissimilarity between the "city" of Anchorage and other major cities in the United States; this is tied to Anchorage's unified home rule" setup of government, the Municipality of Anchorage governs the entire metropolitan area; we do not see people commuting into Anchorage from other tax areas.  This is important because citizens pay into a system that operates for the entire region.  For example, people who live in Marietta, a suburb of Atlanta, Georgia, may commute downtown and benefit from the "City of Atlanta" services such as road use and police protection.  However, this person will pay taxes to Marietta (this is common across metropolitan areas in the United States).  Anchorage does not face the challenge of collecting revenues from metropolitan citizens that free ride off the primary city public goods.

Another impact of the "unified home rule" is that we do not see Tiebout sorting based on the amenities of local governments.  In the "lower 48", we typically see citizens of a metropolitan area sort into different suburbs based on the services offered by the local governments.  For example, a heterosexual couple with kids may sort into a suburb with higher quality schools while a young gay couple will likely opt to live elsewhere selecting a different set of amenities.  On the other hand, and not dissimilar from what we see in the "lower 48", we see sorting based on the amenities offered by citizen's neighbors; we see sorting based on race and income.  Like in other American cities, it is not easy to tell what is going on here.  This unified setup opens room for research into how government services are actually being provided in Anchorage.  Are government services evenly allocated or are they better in wealthier, whiter areas of the city?  Further, does this system of allocation impact efficiency on the metropolitan area as a whole?  The answer to these questions may offer insight into what is going on with race and income sorting in the "lower 48".

Problems Anchorage Faces

While Anchorage faces some of the same aging infrastructure challenges of other cities, another interesting problem facing the City of Anchorage is alcohol abuse.  It is estimated that one third of all property taxes collected are spent responding to alcohol related emergencies.  It may be that this problem is related to dreary winter months where Anchorage only sees a few hours of sunlight per day.  This drinking problem is also attributed to relatively lower alcohol prices; the real price of alcohol has eroded 50-74%  (depending on the type of drink), and there has been no increase in the excise taxes in 18 years.  Further, there are far too many bars and bottle shops operating per square mile than allowed for by Anchorage law.  Many of these establishments are allowed to stay open because they had been there since before the passing of the legislation that limited the number of bars and bottle shops.  It appears that the local or state government has done very little to combat this alarming problem; there is no reference to this issue on the Municipality of Anchorage's public service projects page.

Another interesting problem facing the city of Anchorage (perhaps a bit abstract) is tied to global warming.  In Anchorage, some of the roads (particularly some of the mountain passes to the east of the city) are built on permafrost.  As global temperatures increase, assuming that they are increasing, we may find the permafrost shift causing the roads to crack.  Further, the Alaska oil pipeline, a tremendous source of income for the state of Alaska, is also built on permafrost.  Damage to this pipeline could cost the state a lot of money in terms of forgone revenue, repairs, and environmental damage from spilled oil.  Of course, Anchorage and Alaska as a whole do not have to face this issue alone; all northern cities built on or near permafrost and oil could have the same difficulty.

While governance in Anchorage does face many of the same infrastructural challenges that many other cities also face, issues dealing with alcohol abuse and global warming are fairly unique.  Governance in Anchorage is particularly interesting because the local government setup may yield some different outcomes than do cities typically studied by urban economists (cities in the lower 48).  Yet, we still see racial and income segregation; this suggests that these potential issues are deeper than people simply sorting by the amenities offered by local governments.

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