A little pause for history..Alaska as we know has no state income tax which in many states holds down the local mill rates. We did away with that little irritation shortly after oil starting gushing up out of the ground in Prudhoe Bay. Up until that geyser broke Alaskans were paying 14.5% income tax the highest in the nation. Now we are one of only 9 states whose residents pay no income tax. Nothing. Nada. North Dakota that we hear so much about? You know the state we are worried might be ripping the drilling rigs right out from under us? Yeah well they aren't on the list of no pay states. They pay up to nearly 5% in income tax.
But since income tax is off the table lets look into that pesky property tax since were all being told that's the real Darth Vader in the lives of borough residents. It is just making some assembly members "boiling mad" and supposedly driving hard working folks out of their homes in droves. Forcing folks to leave the Mat Su Borough. Didn't see the tango line of packed pick ups and U Hauls? Yeah me either.
Alaska is the only state in the union where a large portion of the state residents that live here are not subjected to property tax at all. Set up that way many years ago with the rationality that there wasn't the tax base in those areas large enough to support a property tax and it is still so today with seemingly little appetite in the political landscape to change things. So of the 18 boroughs only 14 levy a property tax and only 11 cities located outside the borough's levy a additional mill tax. Palmer is one of them and Wasilla since it has become king of the strip malls and big box stores has replaced its small mill rate with a big fat zero counting on sales tax to fill the city coffers. Long and short of it is the "no stinking property tax" part of the state either supplements with sales tax or the state does the heavy lifting.
Another little piece of the factoid pie is deductions. By state mandate homeowners 65 and older or surviving spouses are exempt from property tax on the first $150,000 in assessed value of their property. This also applies to disabled veterans. Reimbursement from the state was supposed to be made up by this wildly politically popular mandate but that's where the bouncing ball stopped many years ago. In just the last assembly meeting approval was given to exempt 28 properties to take about $3,244,577 off the property tax rolls. And that is just the part that was asking for divine intervention from the assembly to include them in a much larger roll of exempt properties for various reasons. Since 1990 when the state decided to offer this tax break they have piled up over 37 million in unfunded mandates on the shoulders of the property tax payers of the borough. The check for reimbursement of this state mandate is not in the mail. But in the list of state legislative priorities just passed by the sitting assembly among the wishes for rail, roads, bridges is there a priority to collect this debt and relieve the burden off local taxpayers? Nope.
Back to our friends in North Dakota where at least one big contractor based in the borough and frequently absent member of the port commission has gotten weary of waiting for the next big Alaska project and moved his toys where the rush is on. According to the Tax Foundation Alaska ranked in comparison to other states in local and state taxes with the highest rate of property tax being number 46 out of 50. Not the bottom of the ladder but just a few rungs up. North Dakotan folks pull number 30 of the 50. They still have property tax, income tax, sin taxes and they don't enjoy that "hey maybe I can afford a big screen tv" permanent dividend fund check every year given to folks for calling Alaska home. Oh but wait there is a gold rush of good paying jobs. That's the good news. The bad news is there is no where to live in North Dakota and rent, food and just about anything else has doubled. Too bad they didn't call the master of gold rush states for some advise. Could have told them to start printing that "please give us another chance to make millions" bumper sticker that they will need when its over and everyone pulls up stakes and leaves for another sucker.
The point is we are being fed this ongoing continuous drivel of "out of control property taxes" in between the rant of "out of control regulation" and we need to put a stop to it. The hand writing is on the wall that in order to set the foundation to lay off a whole host of people at the borough this budget season, this fairy tale must be continued and be repeated and there are plenty of talking heads on the now veto proof assembly that are more than happy to do it. It's not rocket science. No regulation, no workers, no problem.
This is your borough its time to take the dialog back folks.
It seems like to me, a local taxpayer and spectator of governing issues who has no access to property tax whiners, (really, I don’t know a single one) is that the larger question is if property tax is the best way for every resident to share the fiscal burden of maintaining the infrastructure we all benefit from?
ReplyDeleteA basic tenet of property tax is that it’s the only tax not levied on the basis of ability to pay. In reality it’s not even based on what we own, only on the assessed value of what we own or occupy. For most that’s a good thing but a good tax is fair to all. A lofty goal perhaps but can anyone argue for something less? Would that argument be based on “how it’s done elsewhere”?
Property tax is the only user fee collected based on what you occupy, not your real worth. So OK, you’d be smart to consider that annual property taxes are part of your cost of ownership and plan according, right?
Delinquent property tax bills are the only means by which you can lose property you may own free and clear. Unpaid federal income taxes are different as they are levied against gains you had in hand at some point. Year after year your property value goes up but that only puts cash in your pocket if you sell or take out a loan against the value.
Furthermore it seems even more unsavory to consider pushing property owners off their land to recover funds that are by and large overseen by the well to do who casually dismiss the offensive delinquents as leaching miscreants.
We are stuck with what we have for the time being. Time is no friend when it comes to negative trends.