Tax cap bill OK'd

Assembly vote nixes initiative

Aug. 5, 2005

DARRELL L. BREESE\Frontiersman reporter

PALMER - It was a split decision Tuesday when the Mat-Su Borough Assembly voted to approve a version of the tax-cap ordinance written by Assembly Member Jim Colver. The 4-3 vote served as a knockout blow to a voter initiative slated for the Oct. 4 ballot.

Votes from Colver, Betty Vehrs, Mary Kvalheim and Lynne Woods were enough to pass the assembly's version of the cap, which included one change to the original tax-cap initiative. Inclusion of an exemption for service areas to set their own mill rates with the approval of service area voters is where the two cap proposals differed.

Adoption of the measure makes a ballot measure unnecessary. The tax cap will go into effect with the 2007 borough budget, which will be adopted in May or June 2006.

"This is an enormous victory for the people of the borough," said Penny Nixon, one of the sponsors of the initiative calling for the tax cap. "I am not disappointed. I've advocated for 14 months and am happy that there is finally resolution to the debate."

"With the rapid growth the Valley is experiencing, many residents have felt the pinch of rising assessed values and growing school enrollments," Colver said of the need for a tax cap. "The assembly listened to the public. They asked for a tax cap and we delivered."

Colver added that under the original tax-cap initiative, all borough revenues, including service areas, would be subject to the cap.

"It was important that we made sure that service areas retained their ability to provide essential services like public safety and road maintenance," Colver said.

If a service area needed to increase its funding - for instance, to purchase a new fire truck or deal with an excessive amount of snow (as in 1989-90) - under the original initiative, the tax rate could be raised only with a corresponding cut in the borough or school district budgets.

"Service areas shouldn't have to compete with schools, the borough, or each other for funding to provide services that area residents want," Colver said.

"The service-area model that we use in the borough is effective," Vehrs said. "If we didn't pass this ordinance we might as well trash that model because the service areas would be forced to fight with each other for funds."

Borough Attorney Teresa Williams said the ordinance approved Tuesday makes the citizen initiative's appearance on the ballot unnecessary.

Anne Kilkenny expressed concerns that the tax cap would create a freeze on assessments similar to the one enacted by California's Proposition 13, and thus create a long-term financial problem for the borough.

"She's right to raise the question, but that is not what is being proposed," Colver said. "What the ordinance does is tie revenue from property taxes in Mat-Su to growth in the federal cost-of-living index. The value of property will change as the real estate market in the Valley continues to boom, but the tax cap will insure that the rate of taxes levied will only increase according to the cost of living."

Borough officials estimate the cost-of-living rate for this year will result in a 6.5-percent increase in the tax mill rate.

Nixon questioned the motivation of the assembly members supporting the ordinance.

"I believe the actions taken have nothing to do with a tax cap and a lot to do with politics," Nixon said.

Some of those who opposed the ordinance were not as gracious as Nixon during the public testimony, turning portions of the public-comment period into an assault on Colver and his character, calling him a "grandstander" and "hijacker" of the citizens' ideas, and accusing him of using the issue for personal political gain.

"It's a shame they got personal," Vehrs said. "They wanted their name on the tax cap, and once they realized that wasn't going to happen they turned things into a personal attack."

Colver said it was never his intention to take the decision away from the voters; he intended to prevent any budget issues that would have come forward if he didn't act.

"The big issue is our (the borough's) ability to deliver essential services to the residents," Colver said. "It may not be the same favor they wanted, but it is the tax cap they wanted. It's not always popular to take a stand, but sometimes you have to decide what is best for the borough and make that stand."

Contact Darrell Breese at

352-2267 or darrell.breese@

frontiersman.com.