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Initiative seeks to restore Anchorage tax cap calculation

  • Author: Devin Kelly
  • Updated: September 28, 2016
  • Published January 5, 2016

An Anchorage Assembly vote three months ago that increased how much the city can collect under its tax cap is now under attack from three fronts: a voter initiative, an Assembly member's ballot proposal and a demand letter from former Assemblyman Don Smith, an author of the tax cap.

According to the city clerk's office, an initiative petition application was filed Monday and lists former Mayor Dan Sullivan as one of its sponsors. The application seeks to change city law to limit tax collections to what was traditionally allowed under the tax cap.

"Basically, we've been watching this for a while, and it's been switching back and forth," said Bob Griffin, a retired U.S. Air Force officer and the primary sponsor for the initiative. "Clearly, the way it's been switched back recently this fall ... is really out of line with the legislative intent of the original law."

This past October, the Assembly changed the rules for the tax cap, setting the base for calculating next year's taxes as the amount levied in the previous year by the Assembly, as opposed to the amount collected in the current year. The change, approved 7-4, meant the city could collect about $1 million more in taxes than it otherwise could.

The ordinance was sponsored by Assembly Vice Chair Elvi Gray-Jackson and supported by Assembly members Dick Traini, Patrick Flynn, Ernie Hall, Pete Petersen, Paul Honeman and Tim Steele. A similar ordinance proposed earlier in the year by Flynn passed 6-5 in May, but Sullivan, then mayor, vetoed it.

Gray-Jackson and Flynn both said their measures were intended to give the city more flexibility with finances amid declining state funding. Flynn said Tuesday that the voter initiative would prevent the city from lowering property taxes if state funds become available after the rate has been set. That would provide tax relief for a single year without reducing the city's taxing ability in future years.

"It's maybe hurting the taxpayer, by preventing a future Assembly from providing tax relief," Flynn said. He said the only option would then be to cut services.

Other signers of Monday's petition application include Chuck Spinelli of Spinell Homes, Mike Porcaro of Porcaro Communications and Assemblyman Bill Starr of Eagle River, according to documents filed with the clerk's office. The city attorney's office needs to approve the petition before supporters can start collecting signatures.

At this point, the timeline is very tight; according to the city clerk's office, the deadline for collecting the required 5,754 signatures to put an initiative on the April ballot is Jan. 11. But deputy city clerk Amanda Moser said in a statement Tuesday that the clerk's office is reviewing the election calendar and city law to "confirm that the dates on the calendar reflect the intent of the drafters and are able to be implemented by the Clerk's Office."

Griffin led a successful 2009 initiative effort to put payments to the city from utilities and operations such as the Port of Anchorage and Merrill Field under the tax cap, reversing a change made by former Mayor Mark Begich.

Property tax records show Griffin could be substantially affected by the Oct. 27 vote — his home, next to an airstrip in South Anchorage, is assessed at $1.45 million, though Griffin said that's not what motivates his work on the tax cap.

"It's just time to clarify, and allow the (tax cap) to settle down," Griffin, a member of the city's budget advisory commission, said in a phone interview.

Sullivan did not respond to requests for comment.

Smith, a former Assembly member who wrote the charter tax cap language, said he filed a letter of complaint Tuesday with the city clerk and Mayor Ethan Berkowitz. His letter, which he also provided to Alaska Dispatch News, accuses the officials of illegally changing city charter, but he does not threaten a lawsuit.

Smith says in his letter that the mayor and the Assembly should ask voters if they want to change the tax cap.

Assemblyman Bill Evans, who voted against the change in October, has already taken that step. A ballot measure proposed by Evans and the initiative application are the latest effort to clarify the phrase "total amount approved by the Assembly for the preceding year" in the city's charter.

The Assembly is set to debate Evans' proposal at its upcoming Tuesday meeting.

In 2011, the Assembly narrowly rejected offering voters a ballot proposal similar to Evans' and the proposed initiative. But a month later, the Assembly unanimously voted for a new city law that had the same effect — to clarify that calculations for allowable increases should be based on the amount actually collected, rather than the amount that could be collected.

Flynn pointed to the 2011 law change Tuesday and said the tax cap section of the charter "has never been changed."

At this point, the tax cap is shaping up to be a key issue in the upcoming April election.

Three signers of the petition are running for Assembly: Adam Trombley of West Anchorage; Joe Riggs of South Anchorage; and Terre Gales of East Anchorage. All say they are conservatives.

Another signer, Shirley Nelson, the chair of the city's budget advisory commission, was a conservative candidate for the Midtown Assembly seat, but recently withdrew from the race.

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