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Berkowitz’s Anchorage budget proposal: Lower property taxes, new gas tax

  • Author: Devin Kelly
  • Updated: September 30, 2017
  • Published September 29, 2017

Anchorage Mayor Ethan Berkowitz wants to spend more on snowplowing and firefighters while decreasing property taxes in his 2018 budget — and he's looking to a tax on gasoline to help get there.

In a Friday presentation to the Assembly, the Berkowitz administration also proposed cutting some staff positions and tapping new revenues in marijuana taxes and ambulance fees. Berkowitz also included money for a police academy to replace retiring officers, initiatives related to homelessness and housing and the clean-up of blighted properties in his budget.

Berkowitz said he's looking for ways to pay for public safety while lowering property taxes and meeting fixed costs of labor and health care.

"The upshot of this budget is, property taxpayers are going to see significant relief," Berkowitz told members of the Anchorage Assembly in brief comments Friday morning.

The mayor called for the city to adopt a 10-cent-per-gallon gasoline tax, and also offer a higher tax break for the owners of residential properties. The gas tax would fall under the city's tax cap, and the Berkowitz administration estimates it would raise $11.7 million in its first year.

Neither of the tax proposals would take effect immediately. Voters would have to approve the proposed change in the amount of the residential property tax exemption. The Assembly, meanwhile, would have to pass the gasoline tax.

Wilber said the administration plans to raise ambulance fees by $100. He said Anchorage hasn't raised its fees in some time, and the shift would be in line with rates in other jurisdictions.

In all, Anchorage's general government budget would grow by $10 million from the current year to $519 million. Fixed costs, like labor and health care, as well as changes in the economy, legal settlements and state spending contribute to the size of the budget, budget director Lance Wilber said.

Here's an overview of Berkowitz's spending priorities in his 2018 budget proposal:

– A police academy to replace retiring officers and maintain the size of the Anchorage Police Department. It's not yet known how many officers would be hired, since the number of retirements aren't yet known, Wilber said.

– A fire academy to hire enough firefighters to staff two new ambulances. The ambulances are set to appear on the April city ballot as a bond.

– About $500,000 more for snowplowing and winter maintenance.

– Money for initiatives on housing and homelessness, also about $500,000. Those initiatives have not yet been identified. A similar expenditure in the 2016 budget went to a work van aimed at panhandlers.

– A small pool of money to clean up nuisance properties. Wilber said one example could include a junkyard in Bear Valley whose owner had yet to respond to fines and court rulings.

Last winter, Berkowitz and his staff were pummeled by complaints about snowplowing after shifting money from the winter maintenance budget to pay for other services, like police.

Now Berkowitz wants to restore the amount cut last year and add more. The city also expects to take on more responsibility for maintaining state-owned roads, which are most of the major thoroughfares in the city.

For the first time in his tenure as mayor, Berkowitz is proposing a budget that does not tap into the city's savings account. It's also the first time Berkowitz is not seeking money to expand the size of the police department. The mayor came into office promising to increase the force to more than 400 officers, a benchmark the department hit at the end of last year.

The administration does plan to hold a police academy to keep up with retirements, with the goal of keeping the police department at around 445 sworn officers, according to Wilber. Other city positions outside the public safety department are getting cut, but Wilber said residents shouldn't notice a major impact to services.

In other expenses, the city expects to start paying off the debt of its massive software upgrade project, known as SAP. Wilber said the city would save money on jobs as people who were working on the project are no longer needed.

The Berkowitz administration also plans to propose a $46 million bond package with money for various construction and maintenance projects. That includes replacing the walking bridge at the south end of Westchester Lagoon, Wilber said.

Meanwhile, an ordinance authorizing the gas tax will be introduced Oct. 24, said Assembly Chair Dick Traini. The idea came from the city's budget advisory commission, which passed a resolution supporting the tax.

If nothing changes, property taxpayers will see about a $30 increase in taxes on a $350,000 home. But the measures could translate into a reduction of $360 on the year for the same homeowner, said Wilber.

Berkowitz's presentation starts off an annual two-month discussion with the Assembly over how to spend the city's money. Assemblyman Forrest Dunbar, the vice chair of the Assembly, said he thought the budget proposal had some good features.

He also said that the gasoline tax, if it does in fact work to reduce property taxes, has "a decent chance of passing."

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