Anchorage Daily News

Editor's note: This story was originally published December 18, 1996

When Wasilla city councilman Nick Carney recently proposed abolishing city property taxes, he said it was more of a ruse to spur discussion about the town's future than a serious proposal.

With nearly $500,000 in property taxes it collects each year, the city could build a bigger library, construct more parks, or make other long-term investments, he said, especially now that the city's sales tax brings in more than $4 million per year, he said.

But the plan may be backfiring. At a public hearing last week, only four people showed up to testify about the tax proposal -- two in favor and two against. There are also signs the conservative majority on the city council is taking the proposal seriously. The council is scheduled to take up the issue at its next meeting Jan. 13.

Newly elected Mayor Sarah Palin, who campaigned on a promise to cut city government, said Carney may find his proposal passed into law.

''The irony is this might actually fly ... if these new council members that are very fiscally conservative think it's a good idea,'' she said.

If he wanted to spark a debate, there are much better ways, she said.

Palin said she has questions about abolishing property taxes, but will stand by the council's decision. ''If we have a property tax or if we don't, I'm going to work with it,'' she said.

Wasilla residents pay 2 mills, or $2, for every $1,000 of assessed value on their home. That's the equivalent of $200 a year on a $100,000 home. In addition, residents also pay a boroughwide property tax of about 12 mills. Carney admits his proposal was in part a dig at Palin and what he thinks is a misguided campaign to cut government at the expense of the town's future.

Palin, who was elected in October after beating longtime mayor John Stein, had discussed cutting the mill rate in half. Carney, who is in the minority on the council, just took it one step further. But Carney said he's serious about spurring debate on what services the city should offer and what it should look like.

Unlike many cities in Alaska, Wasilla is flush with money because of its sales tax and its booming retail market, he said. Approved by voters in 1993 to pay for a police force, the 2 percent sales tax generates about $4 million of the city's $5 million in revenue each year. It has left the city with more than $4 million in reserves.

The area is one of the fastest-growing in Alaska, according to state department of labor statistics, and has become a magnet for business as well as Anchorage residents seeking a more rural lifestyle.

''I think this community has the opportunity to really make something of itself,'' Carney said. ''We have the basic funding sources, and we still have land we could buy. . . . I think now is the time to do it.''

Carney said he'll only continue to support property taxes if the money is dedicated to long-term investments. Palin, however, said she questions whether the city has the money to pay for such projects as a community center, or whether the $500,000 in property taxes should be used to pay for basic needs such as paving streets.

If the city gets involved in projects, she said, it should be in partnership with private groups such as was done with Wasilla Wonderland, a playground funded in part by individual donations and built with volunteer labor.

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