Fate of Fairbanks North Star Borough tax cap rests with voters
Published Wednesday, September 17, 2008
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Stumble It!FAIRBANKS — Organizers behind a pair of voter initiatives offer competing critiques of the two-decade-old tax cap at the Fairbanks North Star Borough.
The philosophical divide between those groups is broad. The difference between their measures amounts to a single line in the borough’s lawbooks, and voters next month may need more than a quick look to tell them apart.
The two groups agree that issues surrounding the tax cap — a legal ceiling applied automatically to annual taxes from local sources — can be complicated but agree on little else.
One proposal, Proposition B, would trim the Fairbanks North Star Borough’s allowance, referred to as the cap. The other, Proposition A, gives the existing tax laws a thumbs-up and aims to protect them from change for two years.
Borough Mayor Jim Whitaker has said he would follow Proposition A, and choose to leave the tax cap unchanged, if voters somehow approve both at the polls — an option he said borough attorneys say legally exists. More recently, his administration has gone to court to try and decertify the measure before Oct. 7, an effort that could be resolved as early as this week.
Donna Gilbert, a former elected official who organized the first measure, said the borough’s 370-person workforce has grown faster than the public’s demand for bus service, support for schools, park maintenance and other government services. She based her argument not on numbers generated by supporters but on an anecdotal look at services at the borough, which she suggested has spent money at a rate that has increased beyond any collective improvement to services.
The borough’s budget has, in fact, grown faster than the rate of inflation in the past two decades, and Gilbert said public officials haven’t added enough services to justify the millions of extra dollars being collected beyond inflationary adjustments.
“What are we getting today that we didn’t get then?” Gilbert asked, referring to public services and to 1988, when tax cap laws approved the previous fall first began to impact government budget deliberations.
Supporters of the other initiative, Proposition A, organized in direct response to Gilbert’s measure, according to their Web site, protectthetaxcap.org. One organizer, former Fairbanks school board president Bart LeBon, noted education funding constitutes one-third of the borough’s budget and said Proposition B constitutes a long-term threat to the community’s ability to pay for schools and hire enough teachers.
LeBon and other organizers say the same change 10 years ago would have, by now, choked public spending, a theory they base partly on projections compiled with help from borough officials. LeBon worries Proposition B would leave public officials with little choice but to cut essential services within 10 or 20 years.
“Over time, we’ll be left between a rock and a hard spot,” LeBon said.
Jay Quakenbush, a labor leader working with LeBon to leave the cap unchanged, said existing tax laws protect Fairbanks’ ability to respond to “booms” in its economic boom-and-bust cycle with increased services.
Quakenbush said a revised tax cap would create an imbalance between demand and supply for new services if, for example, construction of a proposed natural gas pipeline began. The existing trans-Alaska oil pipeline is the largest contributor to the borough’s tax rolls, generating more than $5 million in property taxes last year in Fairbanks.
“We just have to be prepared as a borough to respond to demand in road districts, schools, ambulance services, things that people need to be reminded don’t happen overnight,” Quakenbush said.
Budget history
Gilbert suggested a look at historic budget figures would show public spending has grown well beyond inflation.
It has. The tax cap, however, was designed that way. Under current laws, the cap can grow for three things — to keep up with inflation, to account for more people and businesses (a trend tracked by the combined value of new homes and buildings built from one year to the next), and to account for voter-approved bonds.
That second condition — the “growth” factor — works under the assumption that a growing community needs more librarians, teachers, park employees and other public services.
Proposition B would eliminate the growth factor. Proposition A would leave it in place. State laws regarding public initiatives would protect whichever proposal survives the Oct. 7 municipal election by placing it beyond the reach of elected members of the Borough Assembly for two years.
A stripped-down model shows the borough government’s annual budgets, adjusted to reflect inflation-adjusted dollars, grew 14.5 percent between the fiscal years 1988 and 2008.
That budget growth looks to have lagged behind population growth in Fairbanks, although the questions of by how much is debatable. The Alaska Department of Labor and Workforce Development estimates the population inside the Fairbanks borough grew by 25.6 percent over those calendar years.
The borough and the federal Census Bureau, however, believe the state Labor Department’s figures underestimate the number of people in Fairbanks by roughly 7 percent, which indicates the growth of adjusted government budgets has lagged well behind population growth.
A look at another basic model indicates the increase in government employment at the borough since the mid-1980s falls between the two population estimates. Specifically, the number of full-time, benefit-eligible employees on the borough’s payroll — 376 as of last year — is up 28 percent from the payroll in the 1988 fiscal year. That rate outpaces the population increase estimated by the state Labor Department but trails increase when the Census Bureau’s revised population estimates are counted.
Recent scrutiny
A look at the relationship between government and population conditions grows more complicated with the inclusion of other recent signals. The Greater Fairbanks Board of Realtors had reported a 74 percent increase in inventory — homes on the market — between the spring of 2006 and early 2008. School enrollment has fallen across the board — in elementary, middle and high schools — by 11 percent since 1999.
Mike Fisher, the school district’s chief financial officer, said enrollment is impacted by an ever-changing population in Fairbanks — one that swings due to construction trends, military activity and other factors — and probably does little to provide an indication of long-term population changes. He said there seems to be a weaker correlation between birth rates and school enrollment in Fairbanks than elsewhere.
“We kind of buck the trend a bit,” Fisher said.
Borough officials this summer raised concern over rising energy costs before cutting four positions from the budget and holding budget growth below the rate of inflation. The borough’s annual budget had risen, prior to this summer’s action by the assembly, from $107 million in fiscal year 2005, the first full year of Whitaker’s administration, to $127 million three years later, according to year-end, revised budget figures.
That growth is due largely to the receipt of grants that Whitaker said have not impacted property owners’ tax bills — grants that have sent money toward public safety communications technology, funded road service area projects, assisted Salcha homeowners who lived in floodplains and helped contractors cut fire breaks through a national Firewise program.
“We could say no to millions in grants,” Whitaker said. “But why would we do that?”
Whitaker also pointed to that upward trend as a healthy response to growth in the community. He noted rising property values in Fairbanks have led the state of Alaska, through a funding formula, to reduce the level of state assistance for education, a shift that leaves public officials on the hook to cover an increasing responsibility for public schools. He estimated the shift has left the borough paying an extra $2 million a year for education.
Argument broadens
LeBon’s group has pointed to its own graphs, which he said were generated with the help of Whitaker’s office, that indicate the borough would be running on one-third less money today had Gilbert’s proposed change been put in place 10 years ago.
LeBon said those estimates leave him worried a tighter tax cap would reduce the public’s ability, in the long run, to support schools, park services, public transportation and other services.
“There’s no compelling reason to make a change to the original cap,” he said.
Borough officials said they did not calculate how much property taxes may have fallen over that same stretch of time.
Gilbert brushed off concerns that her proposed change would have a negative impact on public services over time. She compared the statements from LeBon and Quakenbush to those made by opponents her original effort in the late 1980s to establish the tax cap.
“Lo and behold, every little bit of it was nonsense,” Gilbert said of the original concerns.
The borough is the community’s major local contributor to public schools, supplying money for roughly one-quarter of the school district’s budget. The borough government also operates the bus system, maintains parks and the Big Dipper, supports volunteer fire departments and road service area management and manages planning, zoning and subdivision functions.
Gilbert argued those services are less essential than those at Fairbanks City Hall, where the community’s other major local government operates police and fire headquarters and maintains city streets.
“We would never do this at the city,” Gilbert said of her measure.
LeBon said the increase in public spending at the borough is reasonable and that the tax cap has worked as it was intended. He said his group’s effort to protect the tax cap is a direct response to Proposition B. Other groups have responded in kind, including fire-protection officials, who believe the proposed change could reverse advances made in rural fire-protection.
“It’s a very large threat to public safety in the borough,” Ester Volunteer Fire Department president Mark Simpson said of Proposition B.
Supporters of both measures said they sense the public supports their respective efforts. Neither said they have engaged directly in discussions with the other side.
“I fear the proposed language change would, in the long-term, seriously damage our ability as a community to deliver essential public services such as education, road maintenance, parks and recreation,” LeBon said.
But Gilbert said it won’t hurt to try the change out for a couple of years. Because statewide public-initiative statutes ensure the tax cap — whichever version passes — will stay outside of elected officials’ reach for two years, she said voters, if they don’t like the change, can just switch back to the old tax cap laws in 2010.
“We’ve never sought to be destructive toward government,” Gilbert said. She noted borough assemblies have routinely stayed below their annual tax allowances and, in the process, saved taxpayers millions. “And yet government has functioned perfectly. And has grown.”
A copy of both Proposition A and Proposition B can be found on the borough’s Web site (www.co.fairbanks.ak.us).
Contact staff writer Christopher Eshleman at 459-7582.
Community Discussion
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Proposition B: A great way to make sure government is held in check.
It's sad the Borough just wants to keep spending. It's so easy to spend other people's money, even with as little service as the FNSB provides.
Since the city is annexing Fred's, maybe the Borough can annex Anchorage....
Then they will get more money and we can keep the tax cap in place!
You want to implement a tax cap yet there are students at North Pole High School who don't have math books to take home at night because it's "not in the budget." Don't complain when your kids can't finish their homework because they don't have a book....and I highly doubt coping the entire book chapter by chapter on the xerox machine for a couple hundred kiddos is easy on the budget either.
And just remember, just a few years ago there was no borough, how did we ever get along without spending 127 million bucks...
firefighterwife, the majority of money for the schools comes from the State and is spent on salaries and retirement. Increases are not geared towards students. Do your homework on what is spent in this borough. Don't cry "it's for the children." This is one case where a B is better than an A.
Learn the facts about the borough budget and why people are so dissatisfied. I am sure FEDCO is looking for a big increase, since it brought in all those thousands of jobs it said it would.
What Whitaker is probably afraid to say is that real estate values have really dropped in this borough and assessments are going down, thus property taxes will decrease. Your home is no longer worth what it was, but he wants you to pay taxes as if it were. Whitaker has never been able to address the problems in this community, only create jobs for the good old boy club and pie in the sky ideas. By the way what happen to his and the assembly's promise to end the IM program this year?
I challenge Donna Gilbert and her pals at the ITA to volunteer in any of the borough facilities--the schools, the library, the animal shelter, parks & rec, public works, volunteer fire depts--then they'd see that "govt" is not too big. But it's easier to talk just to like-minded people and rail on during radio talk shows than actually roll up your sleeves and make the community a better place. Instead, these folks are responsible for costing the borough money through endless litigation and voter initiatives. Please be part of the solution-not part of the problem.
As things stand we often don't receive the level of service we expect. We see frequent complaints about animal control unable or unwilling to capture stray animals, and there is no question that the animal shelter is woefully inadequate to meet the need. Meanwhile, the only emergency services agency that offers paramedic level care 24/7/365 is the city's fire department - all others rely on EMTs who receive much less education and training.
Given the allocation of funding, it would seem like the Borough Assembly considers a big sign at Alaskaland and flowers on airport way a lot more important than caring for the animated inhabitants of the borough.
Perhaps if we got the services we deserve and pay for we'd be less inclined to close the purse strings.
wife-
That's because the school and district don't spend money wisely.
I have, unfortunately, at various times had four kids in that school.
Boy, they, and I, and lots of kids I talk to, can tell stories across the board on its failings.
What really infuriates me is the teachers always whining in class about their "poor pay." How they don't get paid enough to spend any time outside of class to assist with any difficulties a kid might have in, say algebra, for example.
Further, the enrollment has been dropping for years--even though all the oh-so-needed school bonds, several manipulated into special elections because they wouldn't pass with the voters at regular elections--and even though the District's figures with Shefcheck (sp?) at the helm, predicted rises year after year.
Bob Schefchek (sp?!) was working directly for Whitaker after he retired from the school district. Don't know if he still is.
-Community is growing
Not really, school attendance has been on the decline for nearly a decade.
-Property values have been increasing
That should read the borough assessments have been increasing.
I'm voting for Prop B because I want to see a responsible local government.
yep i am voting for b also, i live south of north pole outside of city limits and caan give one illistration of why we need the plan. in the past i have seen north pole police as well as fairbanks city police car come to our culdesac and turn around, with no emergency happening why are they not patroling where they are supposed to. also if you go to school you will find all kinds of people in offices working on paper work, i am not talking about classrooms with teachers looks like to me to much fat in offices at schools also.
By the way, we owe ITA & Ms.Gilbert a vote of thanks for the Great Job
they've done over the years and they continue to do for all the Tax
Payers in this borough!
Firefightterw, They still use books in school?I thought if you couln`t afford a computer tuff luck. Stay after school to get your projects done.HA HA You say north pole dosen`t have money for books? I noticed they had enough money for their new front yard!That probably costed several MILLION$.You know it! I think it was more for tourist than the school.
I have to wonder why there was a growth factor in the first place. If the borough is growing, it is reflected by additional businesses and homes. That, by its very nature, will increase the tax base for the borough simply through added property value. In that sense, growth should take care of itself. If existing property values are depressed due to economic slowdown, increasing the tax burden on property owners to offset the otherwise drop in revenue certainly is not going to help the situation any: Outside of the borough budget, that is.
If you want responsible government you need to elect responsible leaders not tie their hands. There seems to be a lack of tolerance and understanding of the needs of others here. The "I don't use it so why should I pay for it" mentality doesn't benefit a community. Sure I don't use a lot of resources provided to tourism but I do use the public schools but I can't pick what I want to pay for or tourism goes away and so do jobs, families etc. creating a heavier burden on those left. These tax cap efforts are self serving and short sighted.
Anything that would restrict the amount of money going to the school district is a winner for me. Both my mother and Brother are teachers and they are way overpaid for what they do. If the kids were coming out smarter, that would be one thing, but to have 60% of my property taxes go to the schools is ridiculous. When I went to school, we had no computers, very old textbooks, and (gasp) chalkboards instead of dry erase or powerpoint slides. I'm doing just fine in my life from that educational environment.
An informative article Chris, but missing is a discussion of the incredible benefits paid to FNSB employees. Two months of paid time off, and one million dollars in health care coverage for a greatly subsidized amount, as well as a generous retirement package.
Who pays the costs of things like two months of paid time off? Property owners.
The improved revenue cap that ITA is pushing still allows the borough to grow their budget at the rate of inflation. The unions do not like that, they are so greedy that they want to keep increasing the cost of FNSB government BEYOND the rate of inflation even if that growth destroys the economy here.
Homeowners here are paying almost $1,000 dollars more in taxes EACH year (based on the value of a $150,000 home) because FNSB spending has GROWN faster that the rate of inflation for almost two decades.
Having the highest property taxes in Alaska AND the highest heating costs of any large community is destructive in the extreme. Modest measure like the ITA's revised revenue cap is clearly a step in the right direction.
My husband is a volunteer firefighter. He spends a lot of his time away from family and in training so that he will be prepared in the event that any of your ignorant butts need saving.
The volunteer firefighters are all against proposition B and for good reason - they hate it when a house burns down because it is out of district. Maybe it'll be your house. No matter, it will be the home of a family. It will be a home full of cherished mementos, pets, kids, a mom and dad, and it will burn to the ground. Hopefully, everyone will get out safely. There are enumerable houses being built our here in Goldstream Valley that are out of district. This is only one reason to support Proposition A and refute Proposition B. After you vote, maybe you could get off your butt and volunteer to improve the borough services you decry.
Limiting Government spending is one way to limit governmental growth, but public safety funding is not something we should be sacrificing. 4 of the volunteer fire departments have gone through ISO testing in the last couple of years, Steese, Northstar, Chena Goldstream and Ester. All of them received lower ISO ratings, which directly correlates to lower insurance rates for homeowners.
If their funding is capped and the departments can no longer afford their paid staff ISO could step in and raise their rates back up. Any money people saved on their taxes by implementing the cap is going to be lost when their homeowner's insurance goes up.
If people really want to limit spending, don't institute a tax cap, institute a limit on how much of an increase is allowed a year.
I'm voting B. I trust Donna Gilbert.
Whitaker is a zero. Anything that comes out of his mouth, I'm doing the opposite.
My daughter attended NP High School. She received an exceptional education that opened many doors for her in college, particularly scholarships.
Although I'm not too familiar with the school, their "mantra" seemed to be attendance. Teachers thanked us for raising a daughter who never missed a day of school.
Apparently about half skip classes on a daily basis. Not sure if it's still true...this was a couple years ago.
If it were me and my child didn't have the book, I'd buy it. While on order, I'd be xeroxing everything she needed until it came in. Some things are just too important to wait on government to provide.
PROPOSITION B!!
Donna Gilbert will be the death of Fairbanks. That woman cares about nothing but keeping her business taxes low. She doesn't care how bad the rest of the borough/city suffers as long as she is keeping her money in her pocket.
akjak-
If that were the case I would have fire protection at my home. The existing cap has in no way helped us get a fire dpartment. The borough has been the problem.
The propositions have nothing to do with it.
Marie, a tax cap already exists, and it works something like you said.
Therefore, the ISO ratings improved under the cap, and I bet they'll be just fine under a slightly tightened, and needed, one.
Oh -
I forgot to thank Donna for her hard work on the tax cap effort~
Thanks!
I thought a major part of the money for fire service areas come from the service are they serve. The extras generally come from the State. Why don't these service areas ask the voters in their service area to increase the mil for volunteer service. Don't make it look like this is a borough wide service.
There you go, it works because it allows room for inflation and expansion. the existing tax cap may not have helped anyone get a fire department, but it also hasn't HURT any of the fire departments either, which is what prop B would do.
Gilbert has admitted that prop B is based on anecdotal observations and not an analysis of the numbers. If people really want to implement a tax cap vote down both prop A and prop B and get a citizen review committee in place that can run an analysis of the numbers and determine if taxes have been increased more than inflation and area growth has allowed for. Once thats done a new prop can be introduced next year based on actual numbers and not one person's observations.
corrine, if you live outside of the fire district, then no, you don't have fire protection at this time. But, our fire department sent out surveys to those of us who live in the district asking if we would like people like you included and to be provided fire protection. We answered "yes", of course, we want you to be protected. This requires more money, not less. It also requires more volunteers. Yes on Proposition A, no on Proposition B
I agree with deadmoo. It is better to control government spending by being involved and watching (and sometimes speaking out about) what the government is spending your money on than to pass some tax cap and not be involved.
A tax cap is a lazy and potentially inefficient way to control spending. Sometimes a more flexible tax rate would give a better result. Nor does a tax cap guarantee that the money will be spent wisely.
Okay people, quit complaining about the amount of taxes you pay and move to California, please! Fairbanksans pay pennies in taxes compared to the rest of the country. With those pennies, the Borough provides libraries, schools, public transportation, landfill, transfer sites, road service areas, fire service, animal control plus maintenance on these facilities. And you people STILL are satisfied! MOVE! LEAVE ALASKA PLEASE! Quit your bellyaching and remember, nothing in this life is free, get over it!
akjak, I never received a survey, and I live too far out to be included in any existing fire district.
We tried back in the early/mid 90's to get coverage, working with IREMS and the borough. It wasn't an increase of tax issue--we were ready to pay--it was that the borough wanted no other entity involved, although it would have been a better deal for us.
The borough's refusal to work with us killed the deal.
Marie,
back in the day, it was claimed that the then new tax cap would kill or harm the fire departments also.
The problem is getting money for the equipment needed to begin a brand new department.
FreeDarfur is correct mostly. What went on 15 years ago may not be what is going on now, though.
Once a dept. is established, it is mostly, (if not exclusively), an added mil rate that supports it.
But Marie, you keep speaking as if a tax cap doesn't already exist.
"If people really want to implement a tax cap vote down both prop A and prop B..."
Whatever comes of the props, I think that this is an off year for the existing cap, and it will remain in place for now. I might be wrong there.
AKpatriot,
the only thing I can see that will help guarantee wiser money spending, is to tighten the tax cap. The existing one still allows for too much waste.
akguy,
Me too. Thanks to Donna, and the behind-the-scenes very hard worker Ann Roberts.
Thanks, I'm sure, would be appreciated in the form of donations to ITA so that the real info about this can be bought through advertising.
"The volunteer firefighters are all against proposition B and for good reason - they hate it when a house burns down because it is out of district."
Prop B has absolutely nothing to do with an area being in or out of a fire district.
"We just have to be prepared as a borough to respond to demand in road districts, schools, ambulance services, things that people need to be reminded don’t happen overnight..."
Quakenbush's comment doesn't pass the logic test. Is he saying we need to beef up services in anticipation of more demand or we need to increase the amount of funds available to support an anticipated demand for these services? As a taxpayer, I only want to pay for services that are needed right now, not some as yet to materialize requirement that may or may not happen. If he thinks we need to start collecting taxes now to pay for services needed in the future, what is he going to do with those funds from the time the borough starts to collect them until the time comes when the services are actually needed? Does he really think I'm dumb enough to believe the borough will save them for a rainy day?
I'm waiting for someone from the borough to answers Donna's "What are we getting today that we didn’t get then?" question.
"...as long as she is keeping her money in her pocket."
While Donna Gilbert may be keeping more of her money, she's helping me keep more of mine too.
Imagine that, a former president of the school board in cahoots with labor and the borough mayor to keep taxes high. Who do I trust? Hmmm, let me see.. Donna and the ITA have my support on Prop B.
Irusuallyright, imitating another user is against the DNM policies and really undermines any credibility you may have had.
As a taxpayer I want to know that the services I rely on will not only be funded this year, but also next year, and the years after that. Anticipating growth is a necessary part of running the Borough services. I would much rather pay a few dollars extra a year to make sure we are prepared rather than risk not being able to provide the services we need in the future.
Anticipating growth and actually having growth are two different things. Years ago when the borough forecast increased student numbers, we heard the same thing. Turns out the numbers went down. So what you're saying Marie is we should grow government whether or not there is a real and existing requirement for said government and services?
BTW - who do you THINK I'm "imitating"?
That is not at all what I'm saying. I'm saying that the government needs to have the ability to expand if needed, the current system allows that, prop B doesn't. You can't base a new policy off of one set of numbers, like projected students. Just because the number of students hasn't grown as projected doesn't mean there is no growth period.
And I'm SURE it's a TOTAL SHOCK to you that your user name is very similar to "Imusuallyright" *rolls eyes*
Prop B doesn't prevent that. Have you read the proposition or are you taking at face value what you've read here? Section C of the proposition says "EXCEPT THAT THE BOROUGH CAN INCREASE THE AMOUNT OF TAXES LEVIED OR IMPOSED...PAY FOR SERVICES APPROVED BY VOTERS". Looks to me like it puts the power back into the hands of the citizens (who have to pay for it) and removes it from the politicians (who want to confiscate your money to pay for it). I like that idea.
The way the tax cap is currently written allows the borough to increase revenue at their whim, within the limits of the cap, "when new buildings or land come onto the tax rolls". Prop A maintains the status quo. Prop B forces the politicians to come to the people. What's wrong with that? I think the Prop A supporters are being disingenuous
Here's the link to Prop B:
http://www.co.fairbanks.ak.us/ClerksOffi...
Here's the link to Prop A:
http://www.co.fairbanks.ak.us/ClerksOffi...
I think its interesting to note that the borough web page has the proposition commonly called "B" listed first and the propostion commonly called "A" listed second. The order is reversed on the actual ballot, hence the "A" and "B" designation. Might that have been intentional to mislead and cause confusion?
Who? Never heard of 'em. *rolls eyes back at you*
When Jim Whitaker was running for re-election, he ran campaign ads stating that the mil-rates were at the lowest levels in a very long time, yet when I look at my tax bill, the actual amount was ever-increasing. Even this year when property values have taken a big hit, most people that I have talked to have said that their actual taxes have increased again.
Ask not what your country can do for you. Ask not what you can do for your country. Ask what you can do for yourself if the government would just get the heck out of the way.
Limit government in any way we can. Prop B is a start. Thomas Jefferson was an advocate for the smallest amount of government possible and even considered that a necessary evil.
So we should limit government at the expense of our children's education and the safety of our neighbors?
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