The Wasilla City Council unanimously passed Mayor Sarah Palin's operating budget for the 2003 fiscal year without major changes at its May 13 meeting.

This year's operating budget describes $12.3 million in transactions, but some of that is money budgeted for transfers between city funds. Without such transfers, the budget includes approximately $9,385,984 in city spending, according to city finance director Ted Leonard.

The FY03 budget continues the trend of falling property taxes in Wasilla. The council set a property tax rate of 0.5 mills per dollar of value for FY03. The new tax rate will take effect July 1. Palin thanked the council for their action at the end of the meeting, and noted that the city has lowered the property tax six years in a row. Wasilla mayors are limited to two consecutive terms and Palin is in the third and final year of her second term. In an interview Tuesday, Palin said she'd rather not have any property tax, but also discussed reasons for keeping the tax.

"Ideally we wouldn't have property taxes inside the city of Wasilla, but I don't think that would sit very well with the people who are a very big part of our city but live outside of city limits," Palin said.

The falling tax rate is a trend that started in 1993, the year Wasilla's 2 percent retail sales tax went into effect. At that time, the city of Wasilla collected $420 per year on a $100,000 home -- a rate of 4.2 mills. In 2002 the property tax for $100,000 in value was $90, and next year it will be $50. Wasilla's property tax rate has been capped at 2 mills. Property owners inside Wasilla city limits will also pay the Mat-Su Borough's area-wide property tax which was set at a rate of 11.702 mills this week.

In recent years, Wasilla's property tax has been heading toward zero without ever reaching zero in a fashion not unlike Achilles trying to catch a tortoise in the paradox posed by the philosopher Zeno around 480 B.C. If Wasilla politicians continue to reduce the rate by about half each year, the rate will continue to shrink, but it will essentially never bottom out. Of course, the decreases become less meaningful each year, as well.

"At this point it is almost a token measure," Palin said.

Even so, Palin hasn't proposed zeroing out the sales tax -- she said discussions with previous city councils determined that was a bad idea. She described Wasilla's government funding as a three-legged stool. Property taxes, sales taxes and funding from other sources, such as grants from the state and federal governments and fees for services.

"The philosophy has been, if we don't have to take property tax, we don't want to do it," Palin said.