Rural head tax would help pay for schools

Anchorage Republican's plan would collect head tax in state's unincorporated areas

Posted: Sunday, March 13, 2005

FAIRBANKS - An Anchorage Republican has introduced a bill in the Legislature to tax rural residents several hundred dollars apiece to help pay for public schools.

The plan by Sen. Con Bunde, R-Anchorage, would collect a head tax from residents in unincorporated areas even if those areas don't form boroughs. Unincorporated areas do not collect property taxes and therefore do not contribute to school funding.

Bunde's measure, Senate Bill 112, would charge a head tax on those 21 and older who live outside organized boroughs. He estimated the proposal could generate up to $13 million annually.

The tax would be based on the average amount that residents of organized boroughs contribute to schools. That would amount to a little more than $400 each. Residents would be required to pay regardless of whether they have a job.

Bunde said school districts come to the state pleading for more money every year, while some areas are not contributing to the education system.

Richard Schultz of Tok, a former state senator, opposes the idea of borough formation. He said he would be willing to pay a head tax to get supporters of the idea to back off.

"I would rather pay up than be forced into a borough," Schultz said.

The state's Local Boundary Commission, which handles municipal incorporation, said in its annual report that a head tax could act as an incentive to form boroughs.

Commission chairman Darroll Hargraves said if a head tax were in place, people might be more agreeable to the idea of living in a borough because they already would be paying taxes.

Sen. Albert Kookesh, D-Angoon, said nothing in Bunde's bill guarantees a head tax will end forced borough formation efforts.

Kookesh, whose huge district covers many unorganized areas, said the tax would go to the education pot used to fund all state schools, not directly to the schools in unincorporated areas. Those areas would receive less money than they put in, he said.

If the Legislature is interested in making education contributions fairer between residents of organized and unorganized areas, it should implement a statewide income tax, Kookesh said.

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