Lt. gov. candidate late paying taxes

Hall says business problems are behind his habits in tax paying

Posted: Monday, September 23, 2002

ANCHORAGE - Ernie Hall, the Democratic candidate for lieutenant governor, has a pattern of paying his city property taxes late.

Hall said his tardiness is due to cash-flow problems his Anchorage business, Alaska Furniture Manufacturers, has suffered since a brush with bankruptcy in the 1980s. Since then, he has prioritized his spending to keep his business afloat, he said.

According to city property records, Hall owns eight properties in Anchorage with an assessed value of $1.7 million. The combined tax bill totaled $28,984.45 this year.

Public records show Hall was late in paying property taxes every year since 1996, including this year. Hall said the pattern extends back to the mid 1980s, when Anchorage's real estate market collapsed.

Several times, Hall did not pay the city until more than 18 months after the due date. But Hall always paid his tax bill, with interest, in time to keep the city from seizing his property. Hall is now up to date on his property taxes.

"I created those liabilities. They are mine. If it took me until I was in a coffin, I was going to pay them off," he told the Anchorage Daily News.

The Republican challengers to Hall and Democratic candidate for governor Fran Ulmer - Frank Murkowski and Loren Leman - have not made an issue of Hall's taxes. But Hall acknowledged his late payments, coupled with his successful fight against a statewide property tax cap in 2000, are uncomfortable.

"That tax cap would have cut my taxes 40 percent. But I don't believe it would have been good for Anchorage or this state," he said.

For more Juneau Empire coverage of the November 5 general election, please visit the Juneau Empire Elections Guide.

The tax problems stem from Anchorage's real estate collapse in 1985 and 1986, according to Hall, whose business makes custom furniture such as bank counters, teller windows and desks.

During the oil boom of the 1970s and early 1980s, his business flourished. He and his wife built a substantial stock portfolio and bought a Hawaiian condo, he said.

In 1986, the hot Anchorage real estate market contracted, causing property prices to crash and businesses to fail.

Hall said his revenues dropped 50 percent in one year. Abruptly, he was overextended on numerous loans, his tax payments, payroll and bills to suppliers. Hall said his lawyers and accountants advised him to declare bankruptcy, a move that could have made it easier to pay his debts.

Instead, Hall said, he sold his Hawaiian condo, liquidated his stock portfolio, laid off employees and pleaded with his bankers to work out loans.

"We had to rework some loans and renegotiate things," said Larry Linegar, a commercial loan officer for Alaska Mutual Bank at the time. "But he was one of those guys, who if he had a problem was right upfront about it. He had some problems. But I do remember he always paid."

Anchorage Treasurer Dan Moore said the city has an average of 2,500 delinquent taxpayers. "I wouldn't call this highly unusual," Moore said.

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