On April 5, voters will be asked to decide one of the most important issues in Anchorage history -- saving the very successful property tax cap from big-spending politicians who are scheming to grab even more taxes from Anchorage residents. Proposition 8 was placed on the ballot as a result of a citizen's initiative. In just two weeks, nearly 11,000 residents signed the petition to save the tax cap. Now, the voters have a chance to join the initiative sponsors and send a clear message to the politicians -- leave our tax cap alone!
The property tax cap was added to the Anchorage Charter in 1983 by a vote of the people. The goal was to limit government spending while allowing for responsible increases in the cap for inflation, population growth, new construction and voter-approved debt. For over 30 years, the tax cap has functioned very well in both robust and challenging economies.
However, in October of last year, the Anchorage Assembly, with the support of the new administration, passed an ordinance that changes how the property tax limit is calculated, allowing the cap to grow beyond its traditional boundaries.
The loophole they passed allows the tax cap calculation to start with how much property tax they could have collected the previous year, rather than what was actually approved to be collected, which is the way the tax cap has been calculated for decades. Over the course of just a few years, this will mean many millions more in property taxes. In fact, had this change been in place since 2008, an average $300,000 home could have seen an increase in property taxes of over $1,200!
In the voter information pamphlet, the opponents of Proposition 8 say that the traditional tax cap does not allow the city to provide tax relief in case there are surplus revenues from department savings or from one-time windfalls. This is simply incorrect. Surplus revenues can already provide tax relief by using these one-time monies for one-time expenses.
Such expenses could include police and fire academies, legal judgments, ambulance and fire truck purchases, repairs to public facilities, paying down city debt, etc. During my administration, this is exactly how we used one-time revenues, and it allowed us to pay for essential costs without going back to the taxpayers and asking for more funds.
The opponents also claim that employees will not have the incentive to be efficient and find savings if the tax cap isn't artificially expanded to give municipal departments more money. For over 30 years there has been no indication that the tax cap has done any such thing. In fact, during my tenure, we finished with budget surpluses every year. The tax cap certainly did not stop our hard-working managers and employees from doing a great job on behalf of the taxpayers they serve.
As the state struggles with its budget deficit, we are looking at the real possibility of new state income and sales taxes and a reduction in the PFD. The last thing Anchorage residents and the local economy need are for the local politicians to pile on with a big expansion in property taxes.
Supporting Proposition 8 are myself and former conservative mayors Tom Fink, Rick Mystrom, and George Wuerch; community budget hawks like Bob Griffin, Cheryl Frasca, Tom McGrath, Don Smith, and Larry Baker; and the thousands of citizens who braved the January cold to sign the initiative petition.
On April 5, I urge all Anchorage voters to join with us and save the tax cap with a yes vote on Proposition 8.
Dan A. Sullivan served as mayor of Anchorage from 2009 to 2015. He is a member of Tax Cap Defenders.
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Correction: Upon first publication, the short author's bio above incorrectly said that Dan Sullivan served as mayor from 2003 to 2009. It has been corrected.