Alaska’s largest city could see a sales tax.
Anchorage Assembly member Bill Evans is readying a measure that could bring a four percent tax on goods and services.
“People have been pretty upset about the rising property taxes. There’s a limit to what I think you can bear in property taxes in a municipality this size,” Evans said by phone Tuesday. “So diversifying the revenue stream, I think, makes a lot of sense, and takes in some people that currently aren’t paying taxes in Anchorage, people that are commuting here, tourists, things like that.”
Evans says the sales tax is designed to offset property taxes “dollar for dollar.” By shifting the city’s revenue sources without expanding the size of the budget, the measure is designed to stay below the municipality’s “tax cap.”
“If property taxes in the city start to decline, which is a very real possibility given the state’s situation, the city could be in a huge problem because everything is just so loaded onto those property taxes,” Evans said.
“It would be much more sensible to have at least a couple irons in the fire as far as how you determine your revenues,” he added.
Evans acknowledges that with legislators in Juneau also floating the idea of a state-wide sales tax there’s the possibility of double-burdening Anchorage residents.
In order to “combat the regressive nature of a sales tax” Evans is including provisions to exempt essential goods like “food, prescription medicines, utility payments, gasoline and heating fuels, child and adult care services,” as well as rent payments, according to a draft of materials to be submitted with the ordinance.
“I think one of the hardest hit groups right now are people that are the more or less ‘working poor,’ who have a house but that increasing property tax that they can’t get out from almost threatens their ability to keep their house,” Evans said.
The measure has a long way to go. Evans hopes to file it within a week, bringing it before the Assembly for action in December or January after public testimony. If the 11-member body passes it, the measure would go before Anchorage voters in the April municipal elections — where it would need to get at least 60-percent approval in order to pass.
There has never been a sales tax in the municipality. A 2006 measure to introduce one failed.
Evans, a fiscal conservative from South Anchorage, is not running for re-election once his term ends in 2017.
Zachariah Hughes reports on city & state politics, arts & culture, drugs, and military affairs in Anchorage and South Central Alaska.
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