Councilwoman sues over sales tax

Posted: Sunday, August 24, 2003

FAIRBANKS - A Fairbanks city councilwoman has filed a lawsuit alleging that a petition to put a proposed sales tax before voters is illegal.

In the lawsuit filed Thursday, Donna Gilbert said the proposed ballot measure should be thrown out. She also said city staffers are giving the tax proposal unfair breaks to get it to a vote, although that contention isn't stated in the lawsuit.

The city has disputed several of the allegations and is working on a response to the rest.

"We have followed the law strictly and precisely, and we have done everything that is appropriate to let this go forward," City Administrative Services Director Pat Cole told the Fairbanks Daily News-Miner.

The proposed sales tax ballot measure would levy a 3 percent citywide tax on retail sales and all services and drastically reduce city property taxes, limiting them to $50 per $100,000 of property value. The current levy is $651.60 per $100,000.

The citizens' group sponsoring the petition had until Aug. 15 to gather the 1,607 signatures needed to get it on the ballot, but that deadline was extended to Friday. If enough signatures are gathered, city residents would vote on the tax at the Oct. 7 election.

According to the lawsuit, a sales tax would have to be adopted by a change to city ordinances, not a city charter change as proposed by the measure. It also contends the proposal deals with two subjects but this type of initiative can address only one.

The lawsuit also says the wording of the ballot measure contains a mathematical error that would lead to voter confusion.

The measure also would create two revenue caps, but doesn't inform voters of this fact, according to the lawsuit. The lawsuit also contends that Alaska legal precedent forbids voters from removing a city council's ability to set tax rates.

In a memo sent out this week, Deputy City Attorney Marilyn Stowell disputed two of the claims made in the suit. She said the sponsors' math is correct and that the subjects contained in the tax petition are related enough to count as one.

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