The Anchorage Assembly rejected Mayor Dan Sullivan's plan to spend a $6.2 million windfall from the state for items such as replenishing the budget for snow plowing, buying and installing software, and covering increased fuel costs for the People Mover buses.
Instead, after extensive debate at its meeting Tuesday, the Assembly decided to use the state revenue-sharing money to reduce property taxes, as proposed by Assemblyman Bill Starr.
"My intention is to move a budget that works for our community. I feel that we have one" without spending the $6.2 million, Starr said.
The vote was 9-2, with Jennifer Johnston and Patrick Flynn against.
As a result, the average property owners' tax rate to pay for city government will be the same as last year, eliminating an increase that had been expected, city budget director Cheryl Frasca said Wednesday. There's still a modest increase in taxes for school funding: $15 more for a $300,000 house.
The $6.2 million from the state is extra revenue-sharing money approved by the Legislature at the last minute. The governor hasn't signed off on it yet.
Sullivan, as he tried to convince the Assembly to agree with his plan, said, "Our goal is to use one-time money for one-time expenses. ... We'll save money in the long run and that's good fiscal policy."
The administration plan was to spend about $1.7 million of the state money for snow removal -- half the amounted needed to make up for heavy spending on snow plowing in the first months of this record-breaking snow year, city officials said.
About $450,000 was to go to increased fuel costs for city buses and other vehicles.
Most of the state money would have been spent on costs associated with new software programs, including $2 million to pay down debt for purchase of software. The software is expected to lead to reduced ongoing costs.
Without the state money, some cuts will have to be made, Frasca told the Assembly in a work session last week.
Johnston, one of the two who voted against using the state money to reduce taxes, said she was concerned the property tax relief this year will lead to budget problems in 2013 because the city's property tax cap will be lower. The tax cap limits tax increases year-to-year based in part on taxes collected the year before.
Sullivan said, "You're correct this will lower the tax cap for next year." He said the city already expects a shortfall of $18 million to $20 million in 2013.
Besides the $6.2 million anticipated from the state, the city also has $3.7 million left unspent from 2011.
The Assembly went along with the administration's recommendations for spending the leftover 2011 money this year. The plan includes another $1.7 million for snow removal of a total of more than $3 million the administration says is needed.
The Assembly also added some items of its own:
• $250,000 to prepare for the possibility of a police training academy in early 2013.
• $30,000 for a consultant's report on steps the Anchorage Police Department ought to take in the aftermath of the Anthony Rollins case. Rollins was convicted of sexually assaulting women while on the job as a police officer.
• $40,000 for unexpected costs in the April 3 city election, and to pay for an investigation of the conduct of the election, in which many precincts ran short of ballots.
The administration's recommendations for the unspent 2011 funds were dated April 10, but the plan for spending the state windfall only came out Friday.
Some Assembly members were upset to discover Friday that the administration in its April 10 recommendations had only asked for half the money needed to fill up the snow plowing fund.
The administration clearly withheld information, Flynn said in an interview.
During the Assembly meeting, he said, "I find it appalling."
Reach Rosemary Shinohara at rshinohara@adn.com or 257-4340.
By ROSEMARY SHINOHARA
Anchorage Daily News