The Anchorage Assembly agreed to use $2 million in surplus funds from the Solid Waste Services utility to reduce property taxes as part of a compromise with the mayor over this year's $484 million budget.
But the Assembly won't get the $735,000 it added to the budget last week for extra positions to address issues such as homelessness and chronic inebriation.
The changes came in a special Assembly meeting Monday to address vetoes Mayor Dan Sullivan made earlier in the day. The Assembly accepted the plan because it lacked the votes to override the vetoes.
Sullivan said the deal is good news for taxpayers.
"The final result is we are about $1.6 million under the tax cap and the average homeowner will see about a $68 reduction compared to last year's taxes," he said.
The city has been able to reduce property taxes in recent years thanks to higher property valuations and new properties being added to tax rolls, he said. Using the money from the utility adds a third factor.
The $68 reduction will come off a tax bill that for the owner of a $300,000 home would have been about $4,300, he said.
On April 28, the Assembly, in addition to adding the positions, rejected the mayor's effort to move $4 million from the solid waste utility's cash surplus to support city services. Instead, the Assembly moved that money back to the utility.
But Friday, the mayor sat down with Assembly Chair Dick Traini and Assembly member Elvi Gray-Jackson to present a compromise.
The mayor said he would veto the additional positions. But he agreed to move only $2 million from Solid Waste Services into the general fund.
In a 9-2 vote Monday, the Assembly accepted the plan.
The utility will still have a surplus of $6 million to $7 million, about three times what it should be, Sullivan said.
"The Solid Waste Service utility has an abundance of cash right now," he said. "We felt it was appropriate to return that money to the taxpayer because the taxpayers own the utility. Other utilities pay a dividend; Solid Waste Services doesn't, so this was a way we could have them contribute to the general fund."
The positions added by the Assembly last week included three animal control officers, a homelessness coordinator, an entry-level senior planner to assist with marijuana land-use regulations, and a general "chronic inebriate program," the details of which had not been fully defined.
Those are vital public safety services in a city the size of Anchorage and would have cost the owner of a $300,000 home only $6.33 in additional taxes, said Gray-Jackson.
Gray-Jackson and others who had supported adding the positions didn't have the votes to override the veto, so they accepted the compromise.
"It was a settlement," she said.
After the short meeting Monday, Gray-Jackson said she and others supported the lower taxes. But some had a problem with using the utility's money to do that.
"We just thought it was the wrong thing to do, to take money from Solid Waste Services to provide property tax relief," she said.
Pat Flynn and Paul Honeman were the two Assembly members who voted against the main motion that sealed the compromise.
Honeman said he doesn't believe it's "fair" to take money from the utility to show a taxpayer savings.
Flynn agreed and said later the surplus suggests the utility is billing customers too much. He also said he would appreciate a more orderly process, in line with how dividends are distributed to pay for city services by other municipal utilities such as Anchorage Water and Wastewater Utility.
Sullivan said the city administration is working on setting up a formal process that would have Solid Waste Services paying a dividend to the general fund.