News from Patrick Flynn

If you’re an Anchorage property owner like me, today your delivery from the US Postal Service likely included your annual municipal tax bill.  Happy Saturday.

Step one: breathe deeply.

Step two: let’s take a closer look at what your bill tells you.

First off, your assessed valuation is likely similar to last year.  Perhaps a little up, perhaps a little down, but we heard from the Property Appraisal department that 2009 property sales in most categories saw pricing relatively consistent with 2008.  Local real estate columnists have echoed that sentiment repeatedly, indicating that municipal assessments accurately reflect market trends.

Second, while the 2010 municipal budget is roughly equal to 2009’s your property taxes possibly went up, even if your mill levy went down.  That’s primarily because the much-discussed drop in other sources of revenue, investment returns in particular, resulted in fewer dollars to off-set property taxes.  Next year may be a bit better.

Third, the “Property Tax Credit” line, which reduced your bill in 2009, is missing this year.  Two reasons for this:

1. Part of last 2009’s credit stemmed from a pass-through of federal stimulus funds from the state to the city.  Those dollars were primarily applied to provide additional property tax relief.
2. As we discussed last fall, the mayor insisted that state municipal assistance be employed as general government revenue, rather than property tax relief.  This has the twin effects of restricting fiscal flexibility in future years and depriving our state legislators of a simple “thank you” for their efforts to provide local revenues.

Finally, future years will very likely see further property tax increases unless we diversify our tax base.  This year’s taxes were reduced by “refunding” a portion of our debt payments but, while we may or may not employ the same technique in 2011, we will make those payments in future years.  In the meantime we can, and likely will, talk about revenue sources other than property taxes but history teaches us that’s a tough sell.

Regards,

Patrick