Proposition 1 gives relief to homeowners

Finally a borough sales tax option that lowers property taxes. I have opposed a borough-wide sales tax in the past. Why? Because it did not guarantee lower property taxes. This one is different.

This time Proposition 1 requires that the area-wide mill rate be capped at a maximum of 7.3, a reduction of 27 percent from the current 9.98. A 3 percent sales tax will be established specifically to lower property taxes. It also grants each primary residence a $20,000 exemption (without removing other exemptions, such as for seniors), and it is a temporary measure. Yes, a tax that could actually go away. The ordinance will sunset on June 30, 2014. This means it must be put back on the ballot the previous October, or it will automatically expire.

Private property owners bear the biggest burden of the cost of government and schools. I agree that our borough government could curb costs and improve its work toward more economic development, but that is not what the Oct. 6 vote is about. Those are battles to be fought another day. Unfortunately, it is the collective responsibility of all citizens to fund government. This tax will strengthen and diversify the revenue stream by getting 1/3 of the income for the borough budget from residents, non-residents and tourists. Even with the sales tax, property owners will continue to bear 2/3 of the cost of general government.

State law will not allow our assembly to raise the sales tax above 3 percent without a new vote of the people. Proposition 1 ordinance will not allow the assembly to raise the mill rate above 7.3, and a further ordinance requires that our assembly use any money collected above the estimate of $23 million be applied directly to reduction of property taxes the next year. This means the mill rate can go down, but cannot go up.

If values decline, the assembly cannot raise the mill rate in compensation, like in Alaska’s depression of 1986 through 1990. They will be forced to cut government spending according to the economy. The current assembly has total control over what you pay in property tax because there is no maximum mill rate.

Three percent is not an onerous amount, and it is paid only on the first $1,000 of a purchase. Therefore, you cannot pay more than $30 at any given time. And there are many items exempt from the tax, including all purchases made using food stamps and all medical.

We have a huge borough. Many properties along the less populated parts of the Parks and Glenn highways will collect sales taxes from tourists to contribute to future new schools and roads.

Lower property tax lowers your monthly home expense. Eventually, the typical renter hopes to become a homeowner. Lower monthly cost makes it easier to quality for a new home, or allows you to buy a more expensive home. The average home value in 2009 is $209,000. This results in a savings of $708 the first year, and possibly more each additional year of the four-year sales tax.

At the end of the day, we are all borough residents who pay property tax. I do most of my shopping in Wasilla and I am sure those Wasilla residents are happy that I help pay their police force, subsidize their water and sewer, and provide for their lack of tax for RSA (road service area) and NAR (non-area wide items). Wasilla history shows that the sales tax lowered property taxes. They have the lowest taxes in the borough. If you are outside the city, look on your tax bill and see what you pay for RSA and NAR. This ordinance gives those of us outside the cities a break, and increases the break for city residents too.

Proposition 1 is a package deal that reduces the burden on homeowners and diversifies the sources of income. I urge everyone to vote yes.

Patricia Check was a residential property appraiser for 25 years in the Valley and is now retired She also served five years on the Board of Equalization (which hears appeals to the tax assessed values).