Municipal
Election File, 2009
October 6, 2009
Municipal Election
Click here for a "clip out" to take to the polls (but do not leave there)
Once again city voters are being asked to vote on a sales tax for the city. Anyone counting how many times this is? Once again the special interests think you should “pay your fair share.” Well, we think it is time to tell you why you already are, and should NOT support a sales tax, nor change the tax cap.
By itself, City Proposition 1 might be all right. But if by chance, the Sales Tax also passes, the result will be a 25% increase in the City Budget. If you do not want to lose your current tax cap, you need to vote NO on City Proposition. 1. (voted down) There are even more reasons to vote No on Proposition 2, Sales Tax.
Reasons to vote NO sales tax: (voted down)
Loss of Sales:
· Anchorage, which has never had a general sales tax, will enjoy a huge competitive advantage. Rural residents will have one more reason to shop and hold conventions there, instead of in Fairbanks.
· Military Base Exchanges are exempt by law, making them even more attractive to military personnel and giving them a good reason not to shop in Fairbanks.
· Because this is not a Borough wide tax, City businesses are at a distinct and real disadvantage.
· E-commerce presents a huge and growing problem for communities relying on sales taxes. Congress has put a moratorium on local and state taxes on Internet sales. A disproportionate share of the retail market will shift to the Internet and further undermine the sales tax base.
More City Bureaucracy:
While there is no cost to the City for the collection of property tax, the estimated cost for auditing and enforcement of the sales tax is $650,000 annually, according to a study commissioned by the City legal department.
Regressive Nature of Sales Taxes:
Sales taxes are regressive (meaning they hurt most those with lower incomes, including senior citizens). The current property tax exemption for seniors will lose much of its advantage as seniors will now have to pay sales taxes on non-food items.
Property taxes NOT eliminated:
The current proposal appears to zero out property taxes, but actually only eliminates 28% of City residential property taxes, with savings reduced by sales taxes that must be paid. Raising the residential property tax deduction would be a much more efficient way to give relief to homeowners.
A “Foot in the Door”
History has shown that if the city has a sales tax, the borough will soon follow suit, imposing their own borough sales tax. A 3% tax in the city, plus a 3% tax in the borough, equals a 6% sales tax – assuming it stays at that rate.
Sales Taxes Tend to Rise Once Started:
Studies show that sales taxes nationwide tend to rise over time. North Pole is a local example. Their sales tax started at 2, quickly rose to 3% until 2004, when it was raised to 4%, and the cap on it raised as well. We’ve been told that the 2004 increase was supposed to sunset within two years but it never did. Of course, their property tax mil rate was rising at the same time.
Taxes Cannot be Dedicated:
The ballot proposition proposes to dedicate $8 million of new tax monies to Public Safety (police and fire) and to Public Works. By state law, the city cannot dedicate funds. They could in fact use the whole $8 million to increase wages and benefits! As mentioned before, by the city’s own study, the first $650,000 will go to the finance Department for additional staff to administer the tax!
Loss of property tax base:
Approximately 70 percent of the property tax is now paid for by outside entities such as Fred Meyers, Safeway, Lowes, Home Depot, Wal-Mart, Westmark, etc. This sales tax proposal would essentially eliminate this tax base, and shift the burden to consumers who will now be paying the property taxes for ALL businesses. Absentee landowners and large national corporations presently pay a significant amount of city property taxes that would stop under this sales tax proposal. While the city says they want “to grow the tax base” by annexing and providing services to Fred Meyers and the surrounding area, the ballot propositions, if passed, would ensure that they get a free ride and pay no city property taxes at all, but city residents would have to pick up the tab for the new services being provided!
Problems with exemptions:
Unfortunately, this sales tax proposal taxes the net proceeds from gaming, hurting nonprofits that rely on this income. Gasoline is also taxable, putting city gas stations at a serious disadvantage to stations outside city limits.
Deductibility:
Property taxes are fully deductible by businesses and homeowners. This is basically direct revenue sharing from the federal government to our community in the millions of dollars.
Taxpayer Awareness:
The sales tax is a "nickel/dime" tax that masks the true cost of government. That is why many communities want them. The average taxpayer does not have any idea of what they spent at the end of the year and few save receipts for all their purchases, making people less aware of the total cost of government.
Eliminates current tax cap and grows city budget:
The current tax cap on sales and property taxes will be eliminated so that $8 million more in taxes can be raised, and a new tax cap created at that higher level. This will be a windfall for the City and grow the overall City budget by about 25% in one year!
We urge you to vote NO on City Proposition 2.
City Proposition # 3:
Shall the City of Fairbanks exercise the option to withdraw municipal public officials from the State of Alaska Public Official Financial Disclosure Law (AS. 39.50) and instead adopt local ordinances that were similar to the requirements prior to the 2007 amendments starting January 1, 2010? (Endorsed and Passed)
Borough Proposition A: School bond issue
The school district has in excess of $4 million in their saving account, plus over $8 million in stimulus funds. With the Fairbanks economy experiencing such a downturn, why is the School District once again asking for millions of dollars in bond issues? They know that there is every chance that the state will NOT be reimbursing 70%, as they stated in the ordinance authorizing the bond issue:
…if payment of that principal and interest is not made from areawide revenues or other legally available revenues, the Borough will levy ad valorem taxes upon all taxable property in the Borough without limitation as to rate or amount to pay the principal of and interest on the Bonds when due.
The School District, like us, has got to learn to tighten their belts and spend their money in a way that all of us can afford.
We urge you to vote NO on Borough Proposition A.
Borough Proposition B:
An Advisory Question of Whether the Fairbanks North Star Borough Should Locally Administer the PM2.5 Air Quality Program
We urge you to vote NO on Borough Proposition B.
Borough Proposition C:
Placing The Question Of Exemption From The State Of Alaska’s Municipal Official Financial Disclosure Law (AS 39.50) On The Ballot And Adopting, Contingent Upon The Exemption, A Borough Municipal Official Financial Disclosure Requirement
We urge you to vote YES on Borough Proposition C.
Finally, for those of you interested, here are the candidates we endorsed, whom we feel will be fiscally responsible with your tax money.
Borough Mayor
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Borough Mayor, Tamara Wilson (in runoff with Luke Hopkins Nov. 3)
Borough Assembly
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Borough Assembly Seat A , Matthew Want (won)
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Borough Assembly Seat F, Joshua Lott
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Borough Assembly Seat G, Philip Newton
City Council
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City Council Seat A, Vivian Stiver (won)
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City Council Seat B, Frank Turney
For more information on the issues, see our double page ad in the Fairbanks Daily News-Miner Sunday, October 4, 2009.
Paid for by The Interior Taxpayers' Association, Donna Gilbert, President, Box 71892, Fairbanks, AK 99707 (907) 452-4783.
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