Sales tax should replace property tax

July 3, 2005

Spectrum\Larry Wood

The Mat-Su Borough now wants a sales tax to "relieve the burden of property tax owners." Read, to fill the coffers of the never-satisfied bureaucracy that ignore the concept of the government that governs least, governs best. At least a vote is proposed on the matter.

The reality of the state of property ownership in Alaska is something that is puzzling to me. Here we are, literally the richest state in the Union, and we have property taxes. Landowners must rent their property in perpetuity from a municipality or borough, or forfeit that property to unpaid property taxes.

In the face of this resource largesse, why has Alaska not been able to shed the burden of government from the shoulders of the property owner, and, thereby, partially restore ownership of real property back to the owner?

The evidence of the foolishness in hoping that government itself will provide a solution is demonstrated in the $5.5-billion debt to the state's Public Employees' Retirement System (PERS). Government anymore exists to benefit government.

When revenues decline, the state clamps down on revenue sharing with the cities and boroughs. The shortfalls -- imagined or real, depending upon how you perceive our relationship with government at any level -- are made up by the property owner.

What do we do to reduce the burden to the property owner and convince ourselves we can eliminate property taxes without putting all of those bureaucrats and political appointees on welfare?

A first step would be to require our Legislature and state administration to live up to their oaths of office. That means state resource development policy would be based upon best use or greatest benefit to Alaska and Alaskans.

This radical policy would require development of our resources to be made on the basis of requiring infrastructure investment beyond a pipeline to include investing in refining, petrochemicals, and in industries that use hydrocarbons as building blocks. Same for mining. Mine it here, refine and use it here. Export finished products and end the colonial economy of Alaska.

This expanding industrial infrastructure would then provide another source of revenue to government that would sufficiently offset property taxes to allow their replacement by a reasonable sales tax system.

The second step would be to replace property taxes, both real and personal, with a reasonable sales tax. Tie that sales tax to legislation requiring a simple majority of the registered voters to approve any increase in the affected district. Note that I stated simple majority of the registered voters, not a majority of the voters voting in that election. Leave the assemblies and councils to decide regulatory and budgetary issues, but require the approval of the majority of registered voters for any revenue increase.

The third step is to hold only one election per election cycle. All municipal and borough elections would be tied to the state elections, thereby reducing and eliminating duplication and unnecessary costs to our election process.

The primary benefit would be to mitigate the poor municipal/borough election voter turnout that causes the most increase in cost to the property owner. And, yes, I realize that voting is one's responsibility. There is no perfect solution to voter turnout. However, sooner or later we have to stop arguing about what does not work and try something.

A sales tax is only a good idea if it eliminates and completely replaces the property tax system currently in place. Then, and only then, should any sales tax be allowed.

Let's take Alaska beyond colonialism, big government, and into a rational and prosperous 21st century by eliminating property taxes by implementing a rational resource development policy that makes Alaska and Alaskans the priority. A trans-Canada gas pipeline is certainly contrary to this concept.

And, please, no whining about the impact of a sale tax upon the "poor." After all, it was the liberal wing of the U.S. Supreme Court that decided that eminent domain now encompasses private-property seizure for commercial development!

Larry Wood is a Palmer resident.