Opinions

Check your wallet: Anchorage Assembly altered tax cap calculation

With deepest apologies to Mark Twain: Suppose you were a highway robber. And suppose you were a member of the liberal Anchorage Assembly majority. But I repeat myself.

The Assembly majority, emboldened, possibly even inspired, by former Mayor Mark Begich's hocus-pocus fiscal wizardry -- he could, indeed, squeeze blood out of your turnip -- last week revamped how the voter-mandated city tax cap is calculated. In English, that means a potential whopping tax increase.

In doing so, the majority cavalierly ignored what voters' wanted in 1983 when they changed the city charter to establish a tax cap to keep greedy politicians from taxing us out of our homes. Amy Demboski, Bill Starr, Jennifer Johnston and Bill Evans, thankfully, voted no.

While voters understood government costs would go up, the cap was designed to limit tax increases from year to year, and covers property taxes and others as well, such as automobile registration, tobacco, aircraft registration and motor vehicle rentals.

Before last week's change, the base for calculating next year's tax cap was the total amount of city taxes to be collected in the current fiscal year. It is all part of a formula complicated enough that Assemblywoman Elvi Gray-Jackson -- author, along with Assemblyman Dick Traini, of last week's change -- says she is unsure she understands it.

The annual tax cap calculation also includes a five-year average of inflation and population; taxes on assessed valuation of new construction previously untaxed; taxes required to repay voter-approved bonds; and, increased operations and maintenance costs for voter-approved bond-funded projects.

In 2011, all 11 Assembly members, including Gray-Jackson, voted to add this language to the ordinance setting out the tax cap computation: "The base amount for calculating the next year's tax increase limit shall be the total amount of the municipal taxes to be collected for the current fiscal year. ..."

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Seven Assembly members last week stripped that language. (The Assembly tried it earlier this year, but tripped over a Mayor Dan Sullivan veto.)

Increasingly skittish at the prospect of losing state revenue-sharing, the majority was seeking "flexibility" and a "change of philosophy," its members said. If desperately anticipated state revenue-sharing fails to materialize -- and there is $9.2 million of it embedded in Berkowitz's recommended budget -- they want to be able to tax you more to make it up, without being bothered to cut government. (Why city government is using one-time anticipated revenue-sharing for general spending is anybody's guess. It is an incredibly dumb idea.)

By removing the language dealing with the base they certainly have "flexibility" to be as crazy as they want at your expense. For fiscal year 2016, that likely means a $1.6 million tab for taxpayers, by Assembly estimates. Mayor Ethan Berkowitz? He already has that dough spent in his budget. In fact, his budget is, as Assemblywoman Jennifer Johnston pointed out, "predicated" on the ordinance change. (Wonder how he knew?)

By my reckoning, if the change were in place during Sullivan's 2010-2015 budgets, the city could be collecting in the neighborhood of $51 million more of your money in taxes each year.

Think of it this way: The change, and this is nothing short of amazing, will allow the Assembly to use the amount of taxes that could -- could -- have been collected rather than what actually was collected when the city does not "tax to the cap," or milk taxpayers for every last red cent. That drives liberals wild. When it happened, it set a new, lower base for the next year's cap, something that will not happen now.

The language deletion fixes that messiness for them. It preserves taxing capacity -- the flexibility they yammer about -- even if it is unused, builds a tax buffer and feathers the city's tax nest by adding to the cap later. It makes it easier to hike taxes when revenue falls short -- say, when state revenue-sharing evaporates. The increase, no matter what it is, will be carried forward annually, pumping up your tax bill.

What we have here is a brazen Assembly majority with a government-first philosophy, one disregarding voters' wishes -- and certainly not for the first time -- while it works to take more from taxpayers for government rather than even thinking about cutting services.

This is what the tax cap was designed to stop. Maybe it is time for a tax revolt, perhaps something like California's 1978 Proposition 13 or the one launched unsuccessfully in Alaska in 2000.

If not, expect more of the same as money gets tighter.

Again, with deepest apologies to Mark Twain: Suppose you were a highway robber. And suppose you were a liberal member of the Anchorage Assembly majority.

But I repeat myself.

Paul Jenkins is editor of the AnchorageDailyPlanet.com, a division of Porcaro Comunications.

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, email commentary(at)alaskadispatch.com.

Paul Jenkins

Paul Jenkins is a former Associated Press reporter, managing editor of the Anchorage Times, an editor of the Voice of the Times and former editor of the Anchorage Daily Planet.

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