KTUU.com | Alaska's news and information source | Mayor vetoes resolution to send revenue share money to tax relief

Mayor vetoes resolution to send revenue share money to tax relief

by Jason Lamb
Monday, November 2, 2009

ANCHORAGE, Alaska -- For the second time in just more than four months, Anchorage Mayor Dan Sullivan has struck down an Assembly vote.

Monday afternoon Sullivan vetoed an Assembly resolution that asked that state oil revenue sharing money be used to lower Anchorage property taxes.

It's the latest tussle between five Assembly members and the mayor-- and the six-member majority on how to deal with a cash-strapped city budget.

The news came at a quickly called press conference Monday afternoon.

"I have decided to veto AR 2009-270," Sullivan announced.

The move strikes down the Anchorage Assembly's approved resolution that would take an estimated $15 million in state oil revenue sharing funds and give it to taxpayers in the form of lowered property taxes.

"Our $10, almost $11 million under the tax cap is savings every single year going forward, every year," Sullivan said.

The mayor says that giving back revenue sharing money to taxpayers next year would force him to make up that money by taxing the most he possibly could next year, which would raise how much the city could collect in 2011 and 2012.

"The cap raises, and stays raised through perpetuity, so that does not really create tax relief," he said.    

A five-member minority on the Assembly agrees with Sullivan, saying the tax cap needs to stay low.

"It's probably time to stop running it up, and if it means that there's reductions in some services, well, then that's probably what it ought to be," says Assemblyman Dan Coffey, who represents Midtown.

"I think it's a lot of kind of tricky business," says Sheila Selkregg, who is part of the six-member majority on the Assembly who voted to give revenue sharing money back to taxpayers this year.

"By doing it the way the mayor's proposing, it will result in lower taxes right now, but it's lower taxes dependent on the state money we're getting," she said.

She says it's not smart to include revenue sharing money in city services because it might dry up later on.

"We're really making ourselves, for next year, dependent on that same amount of money, in order to provide the (same) sorts of services that we're doing right now, and we have historically seen that at a state level, we don't always get that money," Selkregg said.

And if we don't, she says, by Sullivan forcing down the tax cap, it would hamstring the city by not being able to pay for services that citizens want in the future.

"I think our community has to take responsibility for coming to the table and saying these are the things that we think matter, and we're willing to pay for it or we're not willing to pay for it, and if we want to cut services it's OK with me, but I don't think we should force ourselves into a tax structure that forces us to cut services without that conversation, and I think that's where we're moving with this kind of approach to the revenue sharing," Selkregg said.

With a 6-5 Assembly split, and the mayor on the minority's side, it could continue to be a very contentious budget battle going forward, and this might not be the end of this particular controversy.

The Assembly could still approve a different budget than the mayor wants and direct state revenue sharing money to taxpayers this year.

But Sullivan could veto that approved budget.

In his six year fiscal plan, Sullivan does address the concern that revenue sharing funds might disappear in the future if oil prices get too low.

In each year for the next six years, he projects half of what the city got in state revenue sharing the year before.

That's $8 million in 2011, $4 million in 2012 and so on.

He says in the plan that in those later years if revenue sharing is more than what's budgeted, then that money can be used to reduce property taxes.

Contact Jason Lamb at jlamb@ktuu.com