Tax-cap plan introduced

Proposal includes exemptions for borough's service areas

July 22, 2005

DARRELL L. BREESE\Frontiersman reporter

PALMER - A group of determined Mat-Su Borough residents fought for four years to get a tax-cap initiative on the ballot for voter approval.

After fighting in court and collecting nearly 4,500 signatures, its efforts finally succeeded this year.

A measure introduced Tuesday by a borough assembly member, however, appears poised to nullify the measure that the Mat-Su Taxpayers Association introduced.

Assembly Member Jim Colver introduced an ordinance to create a tax cap for property owners, a measure similar to one the taxpayers' association introduced, with one key difference.

Colver said that rather than committing a "wholesale hijacking" of the initiative, as members of the taxpayers association accused him of doing Tuesday, he took their proposed tax cap and added a clarification for taxing in the various service areas around the borough.

"The proposed tax-cap initiative includes service areas in the calculation of the mill rate toward the cap," Colver said. "The borough attorney indicated that without an exception for the service areas, that the borough would be facing a serious crisis."

That attorney, Teresa Williams, told the assembly during the meeting that if something is not listed specifically as an exemption to the tax cap, that it would be considered a part of the overall title.

She added in her opinion, in response to Colver's inquiry, that "if the ordinance is adopted as currently proposed, it is similar enough to the initiative to void it and remove it from the ballot."

"It appears by his question to the attorney that the main interest in the introduction of the ordinance Tuesday was simply to get the initiative off the ballot," said Penny Nixon, the driving force behind the Mat-Su Taxpayers Association. "It's a political maneuver geared toward blocking the public's right to vote."

Both tax-cap proposals would guarantee that, if approved, property taxes would usually not increase by more than 3 percent annually.

Colver seemed confused by the taxpayers' association's opposition.

"They don't get what they want and they complain," Colver said of the years of debate and court cases that have taken place so far. "Then when you give them what they want, they complain again."

The addition of the exception for the service areas allows for voter-approved expenditures -one of the key points set forth by the taxpayers' association, calling for the voters to have a right to limit their taxes.

Without the exception, the whole budget, including service areas, will be considered as one under the cap and service areas may lose their autonomy and their ability to provide services at levels the voters of the service areas desire.

Colver offered the following example. If a fire service area wanted to purchase a new fire engine, requiring a temporary increase in its mill rate, a corresponding cut in the borough or school district budget would have to occur unless the change he put forward for the tax-cap proposal is made.

"We have maintained from the beginning that anything the voters approve in special services is acceptable under our initiative," Nixon explained.

He went on to point out that, as stated in chapter 2 of the initiative, "Taxes required to fund additional services mandated by voter approved ballot issues," are exceptions to the tax cap.

"There was no need for the addition of the amendment to include service areas," Nixon said, "other than to keep the initiative brought forward by the people off the ballot."

If the tax cap is approved, homeowners won't see large increases in their tax bills, unless they approve bonds for schools or roads.

"What it's going to do is force government to look very carefully at every expenditure," Colver said. "We may have to have longer useful life for computer systems, perhaps. Maybe the new upgrade that we might want for office equipment, we'd have to stretch that out longer and budget longer.

"More things would probably be on the ballot, like bonds."

Colver concluded that residents can expect more bond issues to fund capital improvements, similar to what is done in Anchorage, which served as the model for the tax-cap proposal.

Nixon was pleased the assembly was taking action, but questioned its motivation and timing.

"We've advocated the assembly adoption of the petition over 14 months ago and have run into nothing but challenges all along the way," Nixon said. "Had they acted on it then I would have seen it as responsible governing."

Contact Darrell Breese at

352-2267 or darrell.breese@

frontiersman.com.