What does the Borough "Tax Cap" Mean?

The following was a paper which was available at our Fair booth in August, 1998. It is our explanation of how the Borough Tap Cap works. We tried to make it as simple and clear as possible. Please let us know if you have any other questions. To look at the actual tax cap initiative, click here.

Borough Tax Cap

The Borough Tax Cap is actually a cap on the total revenue the borough can take into its coffers in any one year. The total is based on the amount of revenue received in the previous year, plus a cost of living increase.

However, the "cap" is not a total cap! To be legal, certain exceptions had to be provided for - things that are allowed to raise the cap. They are as follows:

• New buildings and land coming onto the tax rolls

• New payments on bonds approved by the voters

• Payments for services approved by the voters

• New legal judgments entered against the borough

• Expenses for emergencies

You may have noticed that your property taxes have gone up over the years that the cap has been in place.

Most of the increase is due to voter approved bond issues (new schools, library, etc) and new voter approved services such as the Carlson Center. If we had not had the tax cap in place, you would have seen a much steeper increase in taxes. As it is, if the Assembly decided to start a sales tax without allowing you to vote on it, they would have to lower property taxes in the same amount. In order for the sales tax to be added without decreasing other taxes, they would have to allow you to vote on the sales tax as a new tax, so the tax cap is forcing them to allow you to vote on new taxes.

In the Fairbanks North Star Borough, Alaska, the tax cap is in place right now. There is a similar one in the Fairbanks City Charter, where it cannot be changed without a vote of the people. The borough does not have a charter to protect the cap, but state law says that anything put on by voter initiative is protected from change or elimination for two years. For that reason, we must renew the cap every two years.

What YOU can do

Every two years, please help us get the thousands of signatures we need to get this put on the ballot so the voters can decide if they want to extend the protections of the tax cap for two more years. The petition can be found at the big blue ITA booth in the Borealis Building at the Tanana Valley Fair. Thanks!

The Interior Taxpayers' Association once again, October 2010, sponsored an initiative petition drive to extend the protections of the Borough Tax Cap for two more years. Put into borough ordinance by a petition drive of the people, state law only protects it for two years. In October of this year, it will not go away, but its protection will. We asked borough voters to stop by the ITA booth in the Borealis Building during the fair to sign the petition (Fbks, Ft. WW, Eielson, and North Pole voters, too). Our goal was 3000 signatures at the Fair. The voters turned out in mass and we went over our goal. Now you just need to remember to vote YES, October 5.

In 2011 we will need to do the same, for the 2012 ballot. That will put us back on our schedule of getting the signatures a year early each year, to avoid the rush of having to have the signatures right after the fair, or even, in some years, needing them before the fair is over.

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