Anchorage Assembly members generally agreed late Tuesday night that the city should use $5 million of budget surplus money to help lower property taxes, but there was an argument about how and when to do it. After weighing competing proposals, Assembly members ultimately decided not to give out a rebate right away, but to leave the door open to one later this year, if the city has the money.
Assemblyman Eric Croft, who co-sponsored the "wait and see" proposal with fellow Assembly newcomers John Weddleton and Forrest Dunbar, acknowledged practical difficulties with the proposal. But Croft, echoing warnings from Mayor Ethan Berkowitz, said the city should wait to give out a rebate until lawmakers in Juneau reach a resolution on the state budget.
The debate came as the Assembly passed a revised $488 million operating budget and set the tax rate. The average rate will be 14.16 mills, slightly higher than the 2015 rate.
The Assembly voted in favor of amendments adding a new fire inspector and a new code enforcement officer for the local marijuana industry. The body also approved a one-time allocation of $75,000 in surplus money to the Alaska AIDS Assistance Association, or Four A's, as a stopgap for a federal funding cut that threatened two housing projects for families and single adults living with HIV/AIDS. Eighteen people were facing homelessness, agency representatives said.
The Berkowitz administration proposed using about $4 million, or one-fifth, of the city's projected surplus for the year. Berkowitz made tweaks to various department budgets, like information technology, and also added in one-time expenses for initiatives like transitioning the city to a largely vote-by-mail election.
Berkowitz's revised budget also creates a $425,000 pool of grant money to give to local agencies for homelessness assistance programs. A handful of representatives from local social services agencies, including Brother Francis Shelter and Catholic Social Services, appeared at the Assembly meeting Tuesday night to testify in support of the proposal.
By the end of Tuesday night, about $15 million of surplus was left in the city's savings account, also called fund balance. The proposal from Croft, Dunbar and Weddleton said $5 million of that could be given out as property tax relief between September and December of this year "depending on the availability of funds" in the account.
The resolution didn't specify an exact amount. It also said the rebate would be paid only on the first $300,000 of assessed valuation, which Dunbar said was designed to favor low- and middle-income taxpayers.
Dunbar said in an interview that he, Croft and Weddleton all talked about property taxes before they were sworn in last week.
"While we were door-knocking, we certainly heard that people wanted some form of property tax relief," Dunbar said. "So we tried to develop a method where we could do that, without being fiscally irresponsible."
City spokesman Myer Hutchinson said in a text message the approach was "new and different but we will figure it out."
The Assembly narrowly voted against a proposal from Assembly members Amy Demboski and Bill Evans to give out the $5 million tax rebate right away.
Evans said the growth in the size of the budget -- which city budget director Lance Wilber said was tied in large part to local economic growth, not necessarily spending increases -- created an "obligation" for the Assembly to give money back to taxpayers. Demboski voiced concern about constituents in her district who live on fixed incomes.
Berkowitz said Tuesday night he supported the concept of the rebate. But he said he's worried the state Legislature will make more cuts to funding and services, and the city shouldn't commit money before lawmakers adjourn in Juneau.
In the short term, individual households will see an average property tax increase of $42 per every $300,000 of valuation.