Opinions

Dingman: Beware the ways around the city's 60-percent wall against new Anchorage taxes

Taxes?

Yes, even in an election year, we are talking about taxes, and we may soon be talking about higher taxes in the Municipality of Anchorage.

Anchorage Assemblyman Dick Traini has already been talking about new taxes for residents.

It's true that within the Muni, politicians have to put taxes out to a vote of the people and have to, somehow, garner 60 percent of the vote. However, this time the tax fans may have a different plan.

Anchorage has some built-in measures that protect us from taxes. We have a tax cap, which came about in October 1983 and contains a formula by which taxes are levied. It's a fairly complex system, but according to www.munibudget.org, the tax cap is adjusted based on a "five year average change due to inflation, five year average change in population, Taxes on assessed valuation of new construction that previously wasn't taxed, taxes required to re-pay voter-approved bonds (debt service) and increased operations and maintenance costs for bond funded projects approved by voters."

In order to pass a tax the vote would require a three-fifths majority of those voting on the tax. This has generally kept away sales and other taxes in Anchorage, including those that would offset property taxes with sales taxes.

However, there are ways around the tax cap and the 60 percent threshold.

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In 2002, voters turned down the bond to build the Dena'ina Center in downtown Anchorage. Muni leaders then shifted gears and revised the plan to use bed-tax revenues as well as the center's own sales to pay for the bond, and voters agreed to that change. This bed-tax money falls outside of the tax cap

Other shenanigans by politicians include moving municipal-owned utilities outside of the tax cap or raising property values and thus property taxes. These have led some to believe there are conspiracies at hand. Regardless of the reasons or what has actually happened, people do not trust Anchorage leaders with their tax dollars and it's unlikely that 60 percent of voters would approve any new tax.

However, tax supporters might not need that 60 percent mark depending on the strategy they use. We might start to hear a lot more about the Anchorage Municipal Charter.

Before 2003, the charter required that mayoral candidates win by a margin greater than 50 percent. However, when Mark Begich was elected mayor in 2003, an amendment changed that requirement and Begich became mayor with less than 50 percent of the vote.

There were complaints from those on the right that the new rule should not affect the mayoral election that was on the same ballot. Their argument was that voters didn't know the parameters when voting for mayor. However, the election stood as it was, and we all know how that worked out for Begich.

So why should we think that municipal taxes are headed our way? Well, because one of Anchorage's biggest tax fans, Traini, says they are.

You may remember Traini being part of the "tax to the cap" group that was against Mayor Dan Sullivan's attempts to lower property taxes. Well, now he has been heard openly telling other Assembly members he has an alcohol tax ready to be drafted, and it will be a substantial tax. He has also told Assembly members he has a marijuana tax in the works. This of course assumes Ballot Measure 2, which would regulate and tax marijuana like alcohol, passes in November.

I talked to Traini, and he said, "I am looking at the Muni's ability to dedicate the fund stream from an alcohol tax for public safety, police, fire paramedics, detox centers, to allow the cost-causer to be the cost-payer."

While the state of Alaska currently taxes alcohol, the municipality does not have an alcohol tax.

Traini said he hopes the marijuana measure fails. But he said, "If it does pass, I will explore how we can tax it to cover its impact upon our town."

Right now, there is no telling what process Traini would use to propose these two taxes. However, there are some options available to subvert the current process.

He could try to keep the taxes outside the tax cap, like what happened with Anchorage Water and Wastewater Utility or with the bed tax for the Dena'ina center, or he could look to a charter amendment.

Much like what happened when Begich was elected mayor in 2003 with 45 percent of the vote, in the election that the Anchorage Charter was amended to change the "50 percent rule," Traini could attempt to enact the taxes outside the cap and a charter amendment change to allow taxes to be approved with a vote of 50 percent plus one vote. He could also attempt a charter amendment such as was done with the bed tax and try to approve specific taxes outside of the tax cap.

Regardless of what process Traini and the Assembly attempts, new tax proposals as well as proposals to raise current taxes are headed our way. Be very careful about the process they use when they try to sell them to you.

Mike Dingman is a fifth-generation Alaskan born and raised in Anchorage. He is a former UAA student body president and has worked, studied and volunteered in Alaska politics since the late 90s. Email, michaeldingman@gmail.com.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, e-mail commentary(at)alaskadispatch.com

Mike Dingman

Mike Dingman is a fifth-generation Alaskan born and raised in Anchorage. He is a former UAA student body president and has worked, studied and volunteered in Alaska politics since the late '90s.

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