Tax cap goes down to defeat

Posted: Wednesday, November 08, 2000

ANCHORAGE Alaska voters overwhelmingly rejected a measure Tuesday to cap property taxes statewide at 1 percent of a property's assessed value.

The proposal went down to defeat with more than 71 percent of the voters rejecting it. In Juneau, voters rejected the tax cap by nearly 73 percent, by an unofficial margin of 9,385-3,531.

The California-style tax-cap initiative was one of the hottest issues on the ballot and helped draw voters to the polls.

"I'm very pleased with the results, very pleased," said Ernie Hall, chairman of Alaskans United Against the Cap.

Juneau Mayor Sally Smith praised the community for a progressive attitude and a willingness to pay for services.

"I'm extremely gratified by the margin," said Sen. Kim Elton, a Juneau Democrat who campaigned against the cap. "It demonstrates that we can have discussions that are civil discussions about how we handle our fiscal future."

Bill Corbus, president of Alaska Electric Light & Power Co. in Juneau, said he's glad the initiative wasn't passed but also hopes it will "make folks in government conscious of how they spend our money."

The vote against the tax cap cut across party lines and income levels.

According to a Voter News Service exit poll of 750 Alaska voters, Democrats voted overwhelmingly against the measure. About two-thirds of Republicans and two-thirds of all Independents also voted against the cap.

The tax cap idea started with strong popular support. About 40,000 people signed petitions to put the measure on the ballot almost twice the number needed.

But the measure would have cut about $150 million from local budgets across the state.

Municipal officials warned schools would suffer, museums and libraries would reduce hours and streets would remain clogged with snow long after storms.

Backers of the Tax Cap Yes! campaign argued state and local governments could find operating efficiencies and alternate sources of revenue to make up for the lost revenue.

Kevin Ritchie of Juneau, executive director of the Alaska Municipal League, said the debate ultimately became "what kind of a state do we really want?"

"The analysis showed pretty much you weren't going to have a good Alaska if this passed," he said.

Despite the initiative's resounding defeat, tax cap proponents said homeowners will be watching local government spending more carefully.

"Politicians should not take this vote as a signal to continue the status quo," said Eddie Burke, a spokesman for the Tax Cap Yes! campaign.

In Juneau, city officials said the tax cap would force them to cut $1.53 million out of the budget to comply with the 10-mill cap. The mill rate for the 2001 tax year has been set at 10.7, with an additional 1.52 mills enacted for debt retirement.

Empire staff writer Bill McAllister contributed to this article.

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