‘Yes’ and ‘no’: Tax measures: vote ‘yes’ in the city ‘no’ in borough

Fairbanks-area voters will address two tax proposals in Tuesday’s municipal election.

People outside the Fairbanks city limits will have a single sales tax question on the ballot, and it should be voted down. Vote “no” on the borough-wide sales tax Tuesday.

People inside the city will have a second ballot question, Proposition A, that would set a property tax cap of 4.9 mills and put to rest some uncertainty about the future funding of the city. Vote “yes” on the city property tax cap measure.

A recap of our positions on these measures follows.

The borough tax

Dumping the property tax system that has served the Fairbanks North Star Borough well for so many years would be a mistake for several reasons.

  • It is a relatively simple system and the cost to administer the tax program is minimal compared to other tax systems.
  • It is predictable, so homeowners can budget for their annual tax bill, and most homeowners include the payment as part of their monthly mortgage.
  • The great majority of property tax revenue is generated by large property-owning businesses, who would receive a substantial tax break. Unlike homeowners, however, businesses wouldn’t see nearly the amount of increase in sales tax outlays as a homeowner would.
  • It’s doubtful that many property owners have been able to figure out how much they will save, if any at all, under the sales tax proposal.
  • Implementing a sales tax now will could hinder efforts on a statewide level to convince legislators that increasing the homeowner exemption for Fairbanks is what our area really needs.

Vote “no” on the borough sales tax ballot measure on Tuesday.

City property tax cap

A city property tax cap is a fair compromise that should ease some of the burden on homeowners while putting an end to city financing uncertainty.

It is an acceptable compromise for several reasons:

  • A failed effort to force replacement of property taxes, with unknown solutions, in 2006 potentially left the city without an acceptable funding option. It’s a situation that could arise again in 2008 if voters don’t approve the tax cap.
  • Property taxes are the best base funding option for the city because the money costs essentially nothing to collect. The borough administers property taxes borough-wide and gives the city its share.
  • The cap of 4.9 mills will cut homeowners’ city property tax bills by about 20 percent and will keep them at that level or lower in the future.
  • With both a broad-based tax revenue cap and a mill rate cap on property taxes, those who insist the city is “fat” can be assured their government will continue to operate under orders to remain as lean as possible.

Vote “yes” on city Proposition A, the property tax cap, on Tuesday.

By Fairbanks Daily News-Miner

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