The Anchorage Assembly worked in good faith for the past six months with Mayor Dan Sullivan as the new administration fully transitioned into office and completed its first budget. The resulting budget was underfunded by $10 million, resulting in layoffs and unfilled positions, service cuts and polarizing political battles with city unions, all in the name of "tax relief."
Yet, after all of the dust settles from the mayor's budget, tax relief for the homeowners of Anchorage has not been achieved. That mission has not been accomplished. In this economy, it is important to look forward and not backward. Looking forward means providing services and being resourceful in finding ways to provide property tax relief at the same time. Our city and the dynamic people of Anchorage deserve a vision for the future that includes a meaningful way to provide property tax relief.
We have proposed to provide real tax relief for city residents and, at the same time, provide for a means to better assess the value of commercial property, which has been undervalued for too long. The proposal will give all voting citizens an opportunity to express their opinion on whether to increase the current personal property tax exemption for residents of Anchorage from $20,000 to $50,000.
Members of the State Legislature have submitted bills to amend state law to allow municipalities to increase the exemption (SB232). There is also a bill submitted to increase the exemption to $100,000 (SB120). These state laws will allow multi-family properties to receive the exemption as well as single family homes, so renters will get a break too.
The increase in the exemption will also benefit our seniors and veterans who now qualify for the $150,000 tax exemption that we also realize needs adjustment. However, since the state of Alaska stopped reimbursing communities for this exemption in 1996, home values have increased to such a degree that seniors and veterans need a change, and this proposal does that without increasing the tax burden on the rest of us.
This proposal will balance inequities in the current system that has homeowners subsidizing some of the largest property owners in the city, including big corporations and absentee developers and owners.
Residential property owners provide the lion's share, 62 percent, of the property tax revenues in Anchorage while commercial property owners, including some of the largest property owners in the state, carry only 29 percent of the burden. This is neither fair nor balanced. Our proposed tax relief will adjust that burden to be closer to the distribution of a benefit that the classes of taxpayers receive from the city.
A lot has to happen between now and the time that Anchorage's property tax exemption can be increased, but the first step is to contact your Assembly representatives and ask them to vote to put the advisory vote on April 6 ballot. This will happen at the regular Assembly meeting on Tuesday with a public hearing, debate and a vote.
Mayor Sullivan and his allies on the Assembly, notably Debbie Ossiander of Eagle River, are opposing homeowner property tax relief. Why? They will tell you that they are concerned about the "little guy," the small-business owner of Anchorage. If the small-business owner is also a resident of Anchorage, he or she will benefit from the same residential exemption as anyone else. But, in fact, the status quo really benefits the "big guys" and that is who they are protecting when they oppose this effort.
Mayor Sullivan suddenly has compassion for the low-income citizens of the city who rent, arguing they will be burdened. Ask him why he under-funded the budget by $10 million at the cost of transit and other services to low-income residents, if he is so concerned about their well-being. Don't buy these arguments, folks.
This proposal offers a bridge to the future; the status quo is just a Bridge to Nowhere.
Elvi Gray-Jackson represents Midtown, Mike Gutierrez represents East Anchorage and Harriet Drummond represents West Anchorage on the Anchorage Assembly.
By HARRIET DRUMMOND, ELVI GRAY-JACKSON and MIKE GUTIERREZ