It's time to revise our tax structure in the Mat-Su Valley

March 29, 2005

Spectrum/Pat Marley

March 30 is the last day to appeal your 2005 borough property assessment. Mine went up a whopping 63 percent with no improvements. I've heard claims that the new assessments reflect some partisan favoritism at the borough.

In addition to my tax assessment, I also received notice this week of the borough tax and LID foreclosure sale. You thought you owned your land! With property taxes we're all reduced to serfs, slaves to government. Is it right to force people off their land for taxes? That's what we're doing when we allow governments to tax our real property.

Government types claim that the $150,000 exemption given to the elderly and the disabled causes the burden to be greater on the rest of us. That may be true, but I doubt that exemption is significant at all compared to the exemption given land held by borough, state or federal governments and Native corporations, none of whom are taxed.

Where's the real burden coming from? I suppose that when this senior exemption was instituted it seemed like a big deal, because the value of most people's homes didn't exceed the exemption amount. Unfortunately, as some are finding out, the exemption isn't inflation-proofed, and unless that changes, it could become insignificant as property values increase.

Our tax structure should somewhat reflect the common values of society. Certainly there are some conflicts about those values. Our current tax structure seems to indicate that we value government and Native corporation holdings higher than our senior citizens or private open areas.

That assessment is based on which will disappear more quickly and which will likely grow. The current system is great if you feel that government should have ownership and control of everything.

It probably makes sense to allow exemptions and go easy on the things we value most, at the expense of those we value least, lest they become extinct, but we should be making those value judgments directly, not allowing government to do it for us.

As I see it, the main failure of our forms of government, from the federal level down to the city level, is the inability to control its appetite. Representative governments seem unable to control their wish lists, their own growth and the temptation to dig deeper into someone else's pockets.

There are some valid reasons for taxes. Providing a way for each beneficiary to pay for common services is something that comes to mind. Too often, taxes end up being just a way to get someone else to pay for services he neither wants nor uses, or at best, his cost is disproportionate to his usage.

This basically reduces the cost for those who are the primary beneficiaries. Most often, the lesser beneficiary is disenfranchised in one way or another so that he has little say in the matter. I consider this to be immoral; it's just shifting the burden of one's benefits to someone else's shoulders. The best uses of taxation powers are those that come closest to 100-percent approval of the taxed, while the worst ones are farthest from that.

With that in mind, there are some alternatives to what we currently have: Rescind or severely curtail borough government's power to levy taxes and fund schools completely with state oil revenues.

You might say this is the ultimate transfer of burden to someone else, but it seems to me that we are an owner state and, as owners, should we not all be treated equally with respect to the benefits of our resources? What's good for Bush school districts ought to be good for our own. At least that's the way the courts seem to view things, in reverse.

My guess is that if we all received our share of oil revenues directly, before the state got them, and then pay taxes, we'd have a smaller and more responsive state government because we would see how much money they're really wasting from our pockets.

Require voter approval and a higher percentage on all tax issues, including the mill rate. All new taxes and increases should be ballot measures requiring 60-percent majority to pass.

Replace property tax with sales tax. There have been numerous attempts to initiate a borough sales tax, for dubious reasons. At least with a sales tax, people are taxed by rate of consumption and true ownership would be restored.

The critical issues with this are first, ensure the property tax is completely eliminated, and second, ensure the tax rate is controlled by ballot measures, not by politicians.

If the property tax is not eliminated, then you just end up with another tax and have to pay more. If we cannot control the tax amount directly, then we'll still be at the mercy of our elected officials - the same boat we're in now. Flaws of sales taxes are that they prey on people who don't get to vote on them (taxation without representation). Examples of this include rental car taxes, bed taxes, convention center taxes, etc. Proponents of these taxes claim that the disenfranchised were not forced to come here or shop here, it was their choice, so they should pay.

Proposition 13 (my favorite) as in California. Tax appraisals are based on the last sale price of the specific parcel, not the sale price of any other comparable land.

Annual assessment increases are limited to 2 percent unless the property is sold and the tax rate is limited to 1 percent of assessed value. The beauty of this is that no matter how long you've owned your land, or what its potential sale price, you won't be taxed off it by unexpected tax increases.

Opponents claim that this forces newcomers and developers to bear a heavier tax burden. Where's the downside in that? I suppose it's a value issue. At least it's one way to show that we value open spaces, farmland and senior citizens. This approach should appeal to environmentalists as well as farmers and anyone on a fixed income.

The inherent weakness is that it's still a property tax and your property can still be foreclosed for taxes, meaning you still don't really own it. This list is by no means conclusive; there may be other great options that I haven't listed. In any case, it seems apparent that we need a change in tax structure. The tail should not be wagging the dog.

Pat Marley is a Wasilla resident.