Group launches battle against tax cap

Posted: Wednesday, July 12, 2000

Opponents of an initiative that will cap property taxes statewide kicked off their campaign Tuesday.

They are out to convince Alaskans to vote the measure down in the Nov. 7 general election.

Hooked up to each other and to the media by telephone, members of Alaskans United Against the Cap said passage of the property tax cap initiative would be ``devastating'' to communities across Alaska.

``The whole state faces a loss of services, a loss of jobs, a loss of local control,'' said Ernie Hall, an Anchorage businessman and chairman of the anti-cap group. He, along with other members of the group, said passage of the initiative would hit school budgets the hardest.

The measure, put on the ballot with the signatures of more than 40,000 Alaskans, would cap property taxes anywhere in Alaska at 10 mills, or 1 percent. Future increases in property assessments, under the initiative, would be capped at 2 percent per year.

Uwe Kalenka, president of Alaskans for Property Tax Reform, said the initiative will win voter approval despite the predictions of doom from its opponents.

``How can it hurt communities if they (residents) are going to have more spending money,'' he said today. ``Private sector creates wealth, not government.

``The more money you give them (governments), the more they spend.''

The reform group said passage of the measure would yank at least $125 million out of city budgets, including some $73 million from Anchorage, where the mill rate is just more than 18 mills.

Alaskans United Against the Cap intends to raise $250,000 for its campaign.

``They'll need more than that,'' said Dave Dittman, an Anchorage pollster who has done three polls on the subject. The most recent showed 53 percent of Alaskans supported the tax cap, 38 percent opposed it and 9 percent were undecided. That poll -- using a statewide sample of 516 Alaskans -- was accurate to within 5 percent, he said.

Promoters of the measure can argue two different ways, he said. They can say the measure will limit government spending. They can say the tax burden is falling too heavily on property owners, and needs to be spread more widely. Those two arguments appeal to different constituencies, and should prove difficult for initiative foes to shout down, Dittman said.

Juneau's mayor, Dennis Egan, agrees that $250,000 isn't going to be enough.

However, he said, passage of the initiative will undermine Juneau's voters ability to decide for themselves what an appropriate property tax cap is for their community. Today, that cap is at 12 mills, which can be exceeded if voters approve bonds. The highest mill rate in Juneau is now 12.03 mills. The mill rate in remote, non-roaded areas of Juneau is about half of that.

``This makes absolutely no sense to my community,'' Egan said. ``When does this thing end? It deprives communities of a local option.''

Cuts to state revenue sharing have already increased Juneau's tax burden, he said. If the initiative passes, he said, services will need to be slashed or new taxes and higher user fees will be imposed. Another option will be the elimination of tax exemptions for out-of-town shoppers.

``We can have different kinds of taxes like they have in California,'' Egan said.

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