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Anchorage ballot initiative targets city spending limit

  • Author: Devin Kelly
  • Updated: December 2, 2017
  • Published December 26, 2016

A local law restricting government spending and a tax cap in the city charter aren't doing enough to curtail the size of Anchorage's budget, some conservatives say, and they're hoping to ask voters to approve a new charter amendment to limit spending.

Bob Griffin, a member of the city Budget Advisory Commission, and Terre Gales, a former Anchorage Assembly candidate, have sponsored a petition to put a spending limit on the April local election ballot. Their petition, submitted in mid-November, was also signed by former Mayor Dan Sullivan.

Current city law restricts money the Anchorage Assembly can appropriate, based on a population and inflation, and allows for "additional increases necessary to provide voter and legally mandated services."

The spending limit dates back to the early 1980s and the administration of former Anchorage Mayor Tony Knowles, and was passed around the same time as the city's charter limit on property taxes.

But it's been little used. Anchorage Assemblyman Bill Evans, a member of the body's conservative bloc, said earlier this year that he had never even heard of it. In October, the Assembly suspended the law for two years amid questions about the spending limit's efficacy.

The proposed charter amendment from Griffin's group is similar to the ordinance already in Anchorage city code.

But the types of spending that would be excluded from the cap are much more explicit in the charter amendment — payments on voter-approved bond debt, legal settlements and judgments, expenditures by limited service areas, emergency ordinances and grants from non-city sources.

Over the years, Griffin said in an interview, successive administrations have had different interpretations of the kinds of spending that are excluded from the cap. He said that's made it extremely difficult for staff in the city budget office to calculate the spending cap consistently.

For the 2017 city budget, inflation and a contraction in population put the city $9 million over the spending limit. That came as a surprise to budget officials, said city budget director Lance Wilber.

City attorney Bill Falsey started to research the spending limit issue — in August, the city Budget Advisory Commission also requested historical information — and found the limit was not calculated for budgets prepared in 2012, 2013 and 2014, during Sullivan's administration. The spending limit was in fact exceeded in 2013, when the Assembly used the Anchorage School District's taxing authority, but there's no evidence that was disclosed, Falsey said.  

"It has been honored only in breach, and never actually had a meaningful effect on a budget," Falsey said.

Sullivan wrote in an email that he didn't recall the city budget office informing him or the Assembly that budgets in any of those years exceeded the spending limit.

He added that "it is clear that various interpretations of the limit have been employed over the years. That is the reason for the initiative, to make sure the spending limit methodology is clearly defined and consistent each year going forward."

In October, the Berkowitz administration proposed an ordinance that would have made the spending limit function in tandem with the city tax cap. Berkowitz also proposed requiring future city budget offices to present the spending limit calculation to the Assembly.

Instead, on Nov. 15, the Assembly voted to study the issue and suspend the spending cap for two years. The next day, Griffin and Gales filed the ballot initiative.

Griffin acknowledged the spending limit in law now is complex.

"It's a pretty wonky deal," Griffin said. "And the tax cap is certainly the much more well-known cousin of the spending cap."

But he said he and others who supported the initiative have been aware of the spending cap for years, and feel that one in charter is necessary.

"Even though it was inconsistently applied and, as far as I can tell, rarely triggered, it's an important backstop to the tax cap," Griffin said.

The Anchorage chapter of Americans for Prosperity, the organization founded by the billionaire industrialist Koch brothers, is helping to gather signatures for the petition, said Jeremy Price, its local director.

Price said his organization also plans to lobby the Alaska Legislature next year for a state spending cap.

John Weddleton, who serves on the Anchorage Assembly, introduced a ballot measure that mirrored the Berkowitz administration's proposal and used a five-year average of population growth and inflation as the basis for calculating the limit.

He said he's not convinced the spending cap designed by Griffin's group helps government function more efficiently. If it's based on year-to-year population growth and inflation, it's difficult to plan and set up programs, he said.

The Assembly would not be able to alter the spending cap if it's in charter, which is like the city's constitution.   

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