Compass: Anchorage property owners pay only a few dollars more

By MAYOR DAN SULLIVANApril 22, 2013 

Tonight, the Anchorage Assembly will consider my Administration's proposed first quarter revisions to the 2013 budget. This is a process that happens annually at this time of year and the timing allows us to consider how state legislative action might affect the budget and also how expenses and revenues are trending through the first three months of the year.

The proposed budget continues my Administration's efforts to contain the growth of spending and property taxes while delivering high quality public services. Additionally, for four straight years, we have finished the previous year with unreserved revenues (some refer to this as a "surplus"), which we have used for property tax relief and to fund one time expenses without going back to the taxpayers for additional funds.

This year, the unreserved 2012 revenues total about $6.1 million. This number is important to note because some Assembly members as well as members of the public testifying on AO-37 mistakenly thought that our unreserved revenues available for spending was around $30 million. They were including other reserves such as contained in the Police and Fire Medical Trust and road service area reserves that cannot be used for general government.

Of the $6.1 million, $2.1 million is proposed for direct property tax relief. We also propose to establish reserves to cover potential legal liabilities, as well as additional labor and non-labor costs associated with implementing our new municipal operating system. While this project is costing more than anticipated, the long term savings and efficiencies achieved through modernizing our systems will be significant.

The 2013 budget will fund Police and Fire Department academies so we can replace retiring public safety personnel and maintain an appropriate level of staffing. We maintain the same level of staffing and support in our Street Maintenance Department so that snow removal in the winter and road repairs in the summer months will continue to be performed at a high level.

Special one time projects included in the budget include funding for the USS Anchorage Commissioning Ceremony, planning for Ship Creek development, a position classification study and the Anchorage Centennial project.

The best news in the 2013 municipal budget, however, is its impact on property tax payers. The total budget amount is $475 million. Of this amount, $254 million is to be collected in property taxes. $16 million of this amount is from service areas which have their own boards that set their own mill levy. Thus, the amount of property tax to be collected for general government is $238 million.

Next, we add in the amount of taxes to be collected for the Anchorage School District, which is approximately $237 million. Combined, the MOA general government and the ASD property tax needed is $475 million. The mill rate is then adjusted and applied to the total assessed value of municipal property to reach this number. This year, the mill rate is virtually identical to last year.

Compared to last year, the property taxes to be collected for 2013 will result in only a $1 dollar increase in property taxes per $100,000 of assessed property value for the average taxpayer. This is the lowest property tax increase in five years!

Part of the reason we are able to hold the line on property taxes is that we are seeing an increase in other revenue sources. For example, in 2012, automobile tax revenues were up approximately $1.5 million, tobacco taxes increased by approximately $1.8 million and the bed tax increased by $600,000. Based on the data for the first three months of 2013, we expect those upward trends to continue.

These increases along with our efforts over the last several years to deliver services more efficiently and effectively have resulted in better value and savings for our important customers, the residents of Anchorage.

Dan Sullivan has served as mayor of Anchorage since 2009.

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