News from Patrick Flynn

Ballot measure 8

Editor’s note: As April approaches and the Anchorage municipal election nears I thought I’d share a piece I co-authored with my Assembly colleague, Ernie Hall, for the League of Women Voters’ informational pamphlet regarding a proposed ballot initiative. My understanding is proponents were afforded the same opportunity.

The Taxman Cometh – likely more terrifying than the title of any film or book ever conceived. If you’re like us you’re slowly gathering the dizzying number of documents necessary to prepare your 2015 tax return and, with a little luck, receive a tax refund. Painful though this exercise may be, can you imagine a scenario where you were due a refund but didn’t receive it?

Unfortunately, with respect to your municipal taxes, that scenario would become reality if ballot measure 8 is approved.

Here’s why:

Each year the Municipality of Anchorage approves a budget and each year it is closely monitored. Departments are challenged to beat their budgets by spending less than they’re authorized. For example, given the dearth of snow this winter we expect Street Maintenance to come in under budget. That will allow the Assembly to refund that surplus for the following year’s property tax bill – unless ballot measure 8 passes.

While proponents of ballot measure 8 speak of fiscal discipline there are two ugly side effects upon which they remain silent.

First, should it pass, departments would no longer have an incentive to underspend as that would result in lower tax capacity in future years. Anybody who’s been involved with a bureaucracy, public or private, has seen that sort of behavior. In short, ballot measure 8 incentivizes waste and inefficiency. That’s not good government.

Second, ballot measure 8 eliminates the ability for the municipality to provide one-time tax relief. Here’s a specific example; during the Great Recession the federal government provided money to local governments via state governments. Then-Governor Palin initially resisted accepting those dollars but acquiesced due, in part, to the Assembly’s pledge to use Anchorage’s share for tax relief. Had ballot measure 8 been in place that would not have been possible.

Neither of us are much beloved among municipal agencies. We ask tough questions, we don’t suffer fools gladly and we demand accountability. That’s harder than passing feel-good legislation. We concur you’re better off without this ill-conceived proposal.

This contribution was made on Friday, 11. March 2016 at 09:55 and was published under the category Fiscal matters. You can follow comments on this entry through the RSS-Feed.

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