Alaska News

Our view: Shortfall

Anchorage's acting fire chief and a union leader both said this week that the fire department has to scrimp and save on training, equipment and staff at fire stations. That report reminded us that city budget shortfalls are affecting even the most critical services. As the administration of Mayor Dan Sullivan deals with an anticipated $17.5 million shortfall in 2010, the attention so far has been on cutting services more and more.

There's another option we should consider: using some state revenue sharing for continuing services instead of tax relief.

The state is expected to contribute $15 million in revenue-sharing funds to Anchorage's municipal government for next year.

In recent years, most state revenue sharing has replaced some property taxes that pay for city services. But the city could spend some or all of the $15 million to avoid deeper cuts in services.

We'd advocate a combination: Use some revenue sharing to keep city services from falling below an acceptable level, and continue to use some of it for tax relief.

Shifting the money from tax relief to city services would increase property taxes -- about $150 on a $300,000 house, if all revenue sharing were used this way, according to a rough estimate from a city finance official.

This kind of tax increase would not require a citywide vote.

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But Mayor Sullivan isn't likely to raise property taxes. In a discussion with the Daily News last week, he said voters didn't elect him to do that. Instead, he is starting by asking unions for more concessions, and looking at cuts in some city services like libraries.

The city faces the shortfall next year even after some serious budget-cutting this year. An increase of $11.6 million for labor contracts, and an anticipated $12 million increase for the police and fire retirement fund, are driving the shortfall the city faces in 2010, according to city documents. Voter passage of Prop. 9, which requires some income from municipal utilities to be counted in the tax cap, adds further pressure for spending cuts.

When the next round of proposed cuts are identified this fall, if your library branch closes some additional days or your nearby fire station isn't fully staffed or your neighborhood playground doesn't get a paint job, it's important to remember that the choice is ours.

We can cut services or pay more taxes. We should do some of both.

BOTTOM LINE: It's time to put some state revenue-sharing money into maintaining services instead of tax relief.

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