Opinions

Sales tax rears its ugly head again

Yet another sales tax push in Anchorage? "It's deja vu all over again," as Yogi Berra might say.

This latest of umpteen such proposals over the years comes from Anchorage Mayor Ethan Berkowitz, who says the city should have a special election — perhaps its first vote-by-mail balloting — to put a sales and use tax for goods and services on the books to take some of the load off property taxpayers.

It would, if approved by voters, go into effect July 1, 2018, but not all the revenue it raises would be used to offset property levies.

The draft of his "tax revenue diversification measure" includes a 2 percent levy for the entire municipality and would, Berkowitz & Co. say, rake in an anticipated $100 million a year, with tourists, flat-landers and Valley denizens coughing up about 20 percent of the take.

[Mayor: Anchorage needs a sales tax to pay for Seward Highway patrols and lower property taxes]

Of the $100 million, 15 percent, or $15 million, would go to "areawide public health and safety," whatever that might be, and could include policing the Seward Highway along the Turnagain Arm, which budget-battered troopers have opted not to patrol.

City officers would not, however, patrol Girdwood, which has inked a three-year coverage deal with Whittier police, the Alaska Dispatch News reports.

To get that $15 million, the evolving proposal would have voters approve moving that amount of the revenues outside the tax cap. The other 85 percent would remain under the cap and be used for property tax reduction.

What the plan would do is amend the charter, create a new tax, apply only a portion of the revenues to tax relief — and give the city an additional $15 million to spend, as if its nearly $500 million budget is not enough.

Oh, there is more. Sales taxes are a tough nut to crack in this city. Voters in 1997 overwhelmingly amended the city charter to require sales tax proposals muster 60 percent of the votes to pass. Berkowitz & Co. want you to approve a charter change reverting that supermajority to a simple majority vote to get the tax on the books.

Good luck. Voters in 2001 said no to a proposed 2 percent sales tax, 71 percent to 29 percent. They crushed a 3 percent sales tax, 70 percent to 30 percent in 2006. The 2009 mayoral race runoff featured a sales tax fracas, with Eric Croft accusing Dan Sullivan of wanting to substitute a sales tax for property taxes. Sullivan gave it another try in 2013. The idea went nowhere.

[Assemblyman wants 4 percent sales tax on ballot]

Even as the kinks in Berkowitz's proposal are worked out, another sales tax plan — offered last month by Anchorage Assembly member Bill Evans — is due for an vote on Jan. 24. Evans proposes, by the way, to levy a 4 percent tax, with all of it going to property tax relief.

It is easy to understand why the city is kicking over every rock to scrape up more dough. The state has problems of its own.

Low oil prices and North Slope production chugging along at a fraction of what it once was has Alaska's finances circling the drain. With a $3 billion deficit and no light at the end of the fiscal tunnel, cities are ever more likely to be left holding the bag.

It may be that the thinking is: Hey, the state eventually will impose a sales tax; maybe we should beat it to the trough. It may be the powers-that-be just like to spend.

That property taxpayers should get a break in Anchorage is incontrovertible. I have asked before; I will ask again: Can this tax-and-spend Assembly majority have a sales tax and a property levy — and not abuse them both?

The Assembly majority changed the wording in how the city's voter-approved tax cap is calculated in a bid to collect $1.4 million more in property taxes. Voters went to the polls and reversed that chicanery. Now it is reported the city actually has a spending limit, but it routinely is ignored.

History with this bunch — ever scratching about for new money to spend — suggests if a sales tax were implemented, it, along with the property tax, would routinely seesaw toward the stratosphere.

None of this takes into account a new bureaucracy to enforce and audit a sales tax or the inconvenience and liability to businesses forced to collect the tax and account for the money.

Rather than rein in spending, Berkowitz & Co. apparently would have you approve changing the rules so the city can spend even more money. You have to admire the brass. It is almost, well, "Begich-esque."

Until voters have their say on a sales tax, well, "It ain't over till it's over," Berra would tell us.

Paul Jenkins is editor of the AnchorageDailyPlanet.com, a division of Porcaro Communications.

Paul Jenkins

Paul Jenkins is a former Associated Press reporter, managing editor of the Anchorage Times, an editor of the Voice of the Times and former editor of the Anchorage Daily Planet.

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