Assembly rejects sending sales tax proposal to voters

ANCHORAGE — The Anchorage Assembly last week voted against sending a proposed sales tax to voters this April.

Assembly member Bill Evan said his proposed sales tax ordinance intended to reduce property taxes and, with the voter approval of a four percent sales tax, spread the tax burden more evenly across the municipality.

“Everybody knows who’s been in government for any length of time here, probably the number one complaint you get is that my property taxes are too high,” Evans said. “In order to have any significant impact on property taxes you do have to have another revenue source because there are aspects of government that have to be funded.”

Evan highlighted several features of his proposed ordinance, one of which would allow, again pending voter approval, the increase of the sales tax for a given length of time to pay for capital projects.

“Instead of bonding for big capital projects you create these added one cent on the sales tax, if approved by the voters, that allows you to raise that money without borrowing it and thus saving on the interest and thus being more efficient, generally,” Evans said.

Evans also said he’s concerned about the legislature enacting a statewide sales tax and that Anchorage voters should have the chance to approve one and keep potential tax revenues in the municipality.

Assembly member Eric Croft said he doesn’t like the regressive nature of a sales tax, but he does like the idea of enacting a tax for a limited time to pay for specific projects that people can see and touch. He said he’s concerned the voters wouldn’t approve a sales tax, like Anchorage voters have done at least three times in recent memory.

“The fiscal threats that we face compel me to at least let the voters view this one more time but I would prefer and will be working on a version of a sales tax proposal that says, ‘Do you want to build things with it?’ and I think that has a better chance both in this body and before public,” Croft said.

Assembly Member Amy Demboski, from Eagle River, also said she likely wouldn’t vote for a sales tax, but also thought the ordinance was well thought out and provided exemptions that lessened the burden on low-income residents.

“As a voter, I’m not there yet,” Demboski said. “But as an assembly member representing over 50,000 people I have heard a lot of people say they want the option. To me, my decision tonight to vote to put this on the ballot is a decision to put the people in charge.”

The proposed ordinance included a long list of sales tax exempt goods and services such as food, fuel, prescription medications, legal services and medical care. It also capped the tax on a single good or service to $200.

Other assembly members, including Forrest Dunbar, voted against sending the proposal to voters because of the regressive nature of a sales tax.

“I also represent part of the community that is less affluent and for whom a sales tax is perhaps particularly worrisome,” Dunbar said. “But I do want to commend Mr. Evans for getting this conversation started. I intend to vote against this particular proposal, but I do believe there is a way to craft a proposal in such a way that perhaps we can continue to move this forward at another time.

Assembly chair Elvi Gray-Jackson also agreed the municipality needs to find additional sources of revenue but that the community needed to have a broader discussion on the issue of a sales tax and wanted to see Croft’s proposal.

The ordinance needed 8 votes to pass.