Prop 9: Tax cap initiative

In a memo to the Assembly this week, the Budget Advisory Commission recommends that the sponsors of the initiative withdraw it and rewrite it for voters to consider in the future. But it is too late to pull Proposition 9 from the ballot, and voters will find it there when they step into polling booths on Election Day.

Proposition 9 would put payments to city government from city-owned utilities and enterprises like the Anchorage Water and Wastewater Utility and Merrill Field back into the formula used to calculate the annual limit on property taxes. That's the way the tax cap worked until former Mayor Mark Begich and the Assembly changed it in 2003.

The Municipal Taxpayers' League, the group that collected some 13,000 signatures to put the initiative on the ballot, says the utility and enterprise payments -- called MUSA and MESA -- would replace millions of taxpayer dollars under the cap and reduce the burden on property owners.

But an analysis by former Assemblyman Charles Wohlforth says the way the proposition is worded could have the opposite effect, actually increasing allowable property taxes. If the utility and enterprise payments should decline in the future, the amount of taxes the Assembly could charge property owners could increase even more, according to Wohlforth, who was hired by the mayor's office to study the initiative.

The advisory commission early this month heard presentations from both Wohlforth and the taxpayers' league, and three commission members did their own analysis as well.

Commission chairman Jason Bergerson said the group isn't taking a position on whether the initiative should pass, but he said people should be forewarned that it may not achieve what its supporters say it will do.

"We feel that the language is unclear ... it's poorly written and I don't think everybody that votes is going to understand what they're voting for," Bergerson said. "Kind of a buyer beware message."

But Neil Nichols, one of the organizers of the taxpayers' league and an initiative backer, said the commission is just trying to confuse the issue, and voters.

"This is nothing new here," Nichols said. "They're trying to frighten the voters away from tax relief with smoke and mirrors."

If the proposition passes, the future mayor and Assembly members would be politically foolish not to use it to cut taxes, he said.