Dear Fellow Taxpayers: Attached is the Taxpayer Protection Act which the Assembly shall soon be voting on for submission to the Anchorage Voters. Although the current language of paragraph (a) logically points to last year's taxes levied serving as this year's calculation base, because of an administration policy shift by Mayor Mark Begich in 2004, it is now necessary to SPELL IT OUT to stop the practice of using the last year's Cap as the ensuing year's base. Failure to correct this misuse of the Tax Limitation Calculation is resulting in the growth of a huge gap between government's taxing authority given the increase factors intended under the Cap, and what it could collect as a maximum by exploiting this dangerous loophole. The unchecked growth of the Cap threatens the very institution of private property ownership within the jurisdiction of this municipal government. The Municipal Taxpayers League strongly supports the Taxpayer Protection Act and expresses our appreciation and gratitude to Assemblyman Chris Birch for his sponsorship of it. Please read it below:
AN ORDINANCE SUBMITTING TO THE QUALIFIED VOTERS OF THE MUNICIPALITY OF ANCHORAGE AT THE REGULAR MUNICIPAL ELECTION ON APRIL 5, 2011, A BALLOT PROPOSITION AMENDING ANCHORAGE MUNICIPAL CHARTER SECTION 14.03 TO ADD A NEW SECTION TO DEFINE ‘BASE AMOUNT’ IN THE CALCULATION FOR THE TAX INCREASE LIMITATION (TAX CAP).
THE ANCHORAGE ASSEMBLY ORDAINS:
Section 1. Pursuant to Anchorage Municipal Charter Article XVIII, a ballot proposition amending the Anchorage Municipal Charter Section 14.03 in substantially the following form and substance shall be submitted to the qualified voters of the Municipality of Anchorage at the next regular Municipal election to be held on April 5, 2011:
PROPOSITION NO. ____
SHALL ANCHORAGE MUNICIPAL CHARTER BE AMENDED TO ADD A NEW SECTION TO DEFINE ‘BASE AMOUNT’ IN THE CALCULATION FOR THE TAX INCREASE LIMITATION (TAX CAP), AS FOLLOWS (a portion of the section is included for context; only underlined language is new):
Section 14.03. Tax increase limitation.
(a) Except as provided in this section, the total amount of municipal tax that can be levied during a fiscal year shall not exceed the total amount approved by the assembly for the preceding year by more than a percentage determined by adding the average percentage increase in the Federal Consumer Price Index for Anchorage from the preceding five fiscal years plus the average percentage growth or loss in the Anchorage municipal population over the preceding five fiscal years …
*** *** ***
(d) The base amount for calculating the next year’s tax increase limit shall be the amount of property taxes to be collected in the current year.
(Initiative, prop. 24, 10-4-83; initiative, prop. 9, 4-7-09)
Section 2. Section 1 of this ordinance shall become effective immediately upon passage if, and only if, said Proposition is passed by a majority of the qualified voters in the Municipality of Anchorage voting on this Proposition on April 5, 2011.
PASSED AND APPROVED by the Anchorage Assembly this _______ day of _______________, 20____.
______________________ _
Chair of the Assembly
ATTEST:
_________________________
Municipal Clerk
__________________________________________________________________________
__________________________________________________________________________
Dear Fellow Taxpayers: October 16, 2010
The Municipality of Anchorage is on the brink of a financial crisis like we have never faced before. October 25th marks the deadline for a decision that could hit local government with a $90 million judgment that could pass straight through to property tax payers blowing the top off the Tax Cap!
For the average homeowner, this could bump taxes up next year by more than $1,000.00. Didn’t need that winter trip out of state to see family, right? Braces for your kid? Or replace your old tires? Instead you’ll be sending an extra fat check in to your mortgage company for another tax escrow shortage, bye-bye one grand.
So what is so messed up down at City Hall that they can’t run their program without always needing to hit us up for more than we ever shake hands on with these people? And more importantly, what about the protections afforded us by the @%!# Tax Cap?!
There are two smoking guns on the ground next to our sprawled-out taxpayer bodies: one is AO-2003-160, and the other is the December 2008 ratification of the five major Muni labor union contracts. First, AO-2003-160. This ordinance was passed by the Assembly on a dark and stormy night in December of 2003, altering the Tax Cap to produce the most massive tax hike in our city’s 35 year history. Although we repaired the Tax Cap last year with Prop 9, undoing AO-2003-160 by returning MUSA and MESA under the Cap, there is a massive bar tab yet unpaid as a result of the property tax changes made under the Begich administration.
Once the MUSA was taken out of the Cap in 2003, terrible things began to happen; the utilities were transformed into cash cows for the Municipal Government. For one, the monies taken from the AWWU water utility each year shot up 300%! The State Regulatory Commission (RCA) disallowed the Muni to raise AWWU water service rates to derive the higher revenues and now may require them to refund the money to AWWU customers. Muni CFO Lucinda Mahoney has said that such a charge would be treated as a judgment thereby allowing local government to pass the cost directly to property taxpayers outside the Tax Cap limitation.
Secondly, the pay and benefit raises that Muni employee’s got from the Assembly in December 2008, some labor groups getting 15% raises, have piled more cost on top of our already burdened city. These were the checks they were told couldn’t be cashed, unless they come knocking for your vacation, orthodontics, or tires money.
September 17, 2010
Muni’s Dirtiest Deeds at the Dump
What do we do when we discover that our Municipal Government has been breaking the law to illegally take millions of dollars from the public? And what do we do with the responsible Municipal executives who have devised clever schemes to circumvent the Law? Page 26, “Solid Waste Services” of the Assembly’s audit of the Muni’s 2008 finances is like that grainy, black and white security camera footage that shows a crime in progress.
The date stamp is August 07, 2008, the subjects are Sharon Weddleton and Mark Madden, CFO for Anchorage Government and the Director of Solid Waste Services, respectively. In emails Madden basically says his garbage collecting utility can’t pay the Muni a “revenue distribution” for the year because it made no surplus revenues. Madden, in quoting Municipal Code, was covering his rear because he knew what the law says: no surplus, no payments.
Break the Law then; Weddleton’s response to Madden is as firm as a hickory bat. To quote from her email: “However, let me gently point out that you should not bother to come back with counter arguments, as excepting a 6.4+ earthquake (or sale of SWS), the likelihood of Refuse or SWS avoiding paying their property taxes is basically nil. This is the same message I deliver to all of the enterprise funds that pose this question.” She chose the word “taxes” in her response, when the monies in question were obviously “revenue distributions,” as addressed by AMC 21.10.06, and not to be confused with the MUSA and MESA PILT monies also paid to the Muni.
It was after the Begich Administration took over in 2003 that SWS began distributing money to the General Government like this. In 2004, $750,000 was paid, in 2008, $825,946, and in 2009 $909,010. But the Law (AMC 21.10.06 & .065) clearly states that the Muni may only take from the utilities if there is a “revenue surplus” at the utility. But the Administration stated projected annual losses of $2,500,000 in January of 2008 when asking the Assembly to approve collection rate hikes, and yet dividends were taken anyway. On this discrepancy, the Administration stated, “as the owner of SWS, it (the Muni) should receive a reasonable rate of return on its investment as represented by this dividend.” Wait! What about what the Law says?
Since 2004 the taxes, losses, dividends and collection rates at Solid Waste Services have soared. And the payments that the Anchorage Municipal Government demands from this public enterprise, like other Municipal enterprises and utilities, have been used to justify rate increase after rate increase.
It gets even dirtier at the Dump. After the Anchorage Regional Landfill on Highland Road fills up by 2043, it’s going to take an estimated $83 million to close and care for it. SWS has a liability for its ultimate Care and Closure. Statements made in the original Comprehensive Plan and all subsequent Permit Applications submitted for the continued operation of the Facility since have detailed the payment of monies paid by the SWS Ratepayers for this defined purpose. Also that the monies collected for Care and Closure by the MOA would be set aside “… in a closure reserve fund within its general fund using standards provided by the Governmental Accounting Standards Board …” By Fall 2008, about $17 million had been saved for Closure. But at the end of 2008, as Begich’s administration drew to a close, this money was swept into the Muni’s General Fund and used for “other purposes.” This precipitated AO 2008-46 which then created a “restricted account” for Care and Closure, and AMC 26.80.060C establishing that future “invasions” may only be done with Assembly approval. Where $17 million had been saved and then taken, this new account was opened with a negative $700,000 approximately. The drastically underfunded Closure account is now held as the basis for requiring additional SWS rate hikes!
The Law is broken. The Law is not working and the reason that the Law is not working is because it is Anchorage Municipal Government itself who is breaking the Law. So now what? Regarding SWS, we should demand that the General Fund of Anchorage Municipal Government return to SWS all the money that was illegally taken since 2004. Secondly, the money that had been collected for Care and Closure up to the end of 2008 should not have been exploited on some accounting technicality. It was collected for a specified purpose, so it needs to be returned to the new “restricted account” for Care and Closure. Rate Base charges would then need to be recomputed on the basis of SWS’s finances after reimbursements.
The Municipal Taxpayers League of Anchorage will continue to study relevant Sections of Anchorage Municipal Code and if deemed necessary, we will once again raise our Banner.
As with the passage of Proposition Nine which repaired our Tax Cap on the April 2009 Ballot with a 62% vote of the people, we believe that if we work together and remain alert we can instill an attitude of fiscal integrity and fiscal responsibility in Anchorage Municipal Government.
