Bill to bypass tax cap breezes past its first hurdle

Elton's plan aimed at relieving worries about ballot initiative

Posted: Tuesday, March 07, 2000

Local voters could tax themselves as much as they want if Senate Bill 227 breezes through the rest of the Legislature as easily as it did its first committee Monday.

The bill, introduced by Juneau Sen. Kim Elton, is a response to a citizens' initiative that has frightened municipal officials around the state.

That initiative would cap local property taxes at 10 mills, a change that would pose significant problems for many communities, including Juneau, that already have higher tax rates.

Anticipating the initiative will indeed pass, Elton has introduced a bill that would let local voters override the statewide tax cap if they want to.

``This allows the community to set its own cap,'' Elton, a Democrat, said in a Senate Community and Regional Affairs Committee meeting Monday.

It would be a safety net for communities that might otherwise be forced to make deep cuts in school budgets or other municipal services if the initiative passes, he said.

Local government representatives from Anchorage, Fairbanks and Petersburg testified in favor of the measure, saying it could help blunt the impact of the citizens' initiative.

Bonnie Williams of the Fairbanks North Star Borough Assembly predicted the initiative would have dire consequences for her community. The borough would have to find $25 million in cuts from an $89 million budget, she said.

Education would see serious reductions, she said, and cuts in service area mill rates could decimate other basic programs.

``We would no longer have fire protection, period,'' she said. ``Most of our roads would become pretty impassable.''

No one testified against the bill. Efforts to reach the three primary sponsors of the tax cap initiative were unsuccessful.

Senate Community and Regional Affairs Committee members' only questions were whether the timing of the bill was a good strategy.

Sen. Randy Phillips, an Eagle River Republican, said he feared passing the bill now might give ammunition to the citizens' group pushing the tax cap in the fall election.

Sen. Jerry Mackie, however, said passing the bill after the initiative is voted on could leave lawmakers open to charges of tampering with the voters' will.

``Then you'd hear comments like, `What part of no didn't you understand?''' the Craig Republican said.

Elton said he doesn't think tactical considerations are important. He thinks there's a very good chance the initiative will pass, regardless of what the Legislature does. The bill would give communities a tool to cope with the potential consequences.

If the bill isn't passed now, ``for a year there's going to be chaos'' if the initiative passes, Elton predicted. SB 227 would help communities avoid ``that tremendous disruption.''

Elton's bill would only take effect if the citizens' initiative passes.

In addition to allowing communities to overrule the initiative, the bill allows school bond debt to be excluded from that cap.

Elton's bill does not deal with a third element of the citizens' initiative, which would prevent the assessed value of property from rising more than 2 percent a year.

The bill passed the Community and Regional Affairs Committee and now moves to Senate Finance.

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