Southcentral Alaska homeowners work on initiative to lower taxes

Posted: Monday, January 05, 2009

ANCHORAGE - A group of homeowners is working to lower the amount of taxes that can be levied on their properties.

The homeowners group in Eagle River and Chugiak hopes to restore rules that existed before a change in 2003 in how taxes are calculated. They are working to get the initiative on the April city ballot.

The proposal would change the way the municipality calculates its tax cap. At issue is whether money paid into the city's general fund by utilities and other city-owned agencies is counted as being under the tax cap, or outside it.

Mayor Mark Begich and the city assembly moved the utility payments outside the cap on taxes.

Organizers Neil Nichols and Robert Timmons said their initiative would restore the cap to the rules that existed before the change when the utilities' "payments in lieu of taxes" were counted under the cap, along with taxes paid by property owners.

Nichols and Timmons said wage increases in recently approved five-year contracts with four city labor unions, including police and firefighters, are part of the impetus for their initiative. Assembly members who supported those contracts said they should actually save the city money in the long term.

If the initiative reaches the ballot and is approved by voters, the tax cap changes would take effect in 2010. They would be phased in gradually, over a three-year period, to diminish their immediate effect on city services, Nichols said.

If the initiative had been in effect for the 2009 budget, it would have cut property taxes available for city and school district expenses by about $16 million, according to Nichols and Anchorage city manager Mike Abbott.

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