The tax cap was passed by voters in 1983 in order to mitigate large swings in property tax changes and curb overspending; current school board member Don Smith is considered the "father of the tax cap" since as an Assemblyman at the time, he was instrumental in making it happen. The cap limits how much taxes can increase from year to year by using a "base" to calculate the next year's tax cap. For the first 23 years, the "base" was calculated to be the amount of property taxes actually collected the prior year, rather than how much government could have collected.
However, in 2006, the tax-hungry Begich Administration changed how the tax cap was calculated by using the higher number for the base -- the amount of property taxes that could have been collected instead of the amount actually collected. Using this higher number guaranteed a higher tax cap and exposed taxpayers to the potential of dramatic increases in property taxes, contrary to the cap's intent. The Begich Administration further inflated the base calculation by including in its higher number money received from state revenue sharing, which is money not even collected from taxpayers. Birch notes that since 2006, the tax cap was artificially inflated by $76 million because of the baseline change, and taxpayers would have been stuck with the bill if city officials had decided to spend it
AO 2010-92 would simply restore the old way of calculating the cap by inserting the following subparagraph in AMC Section 14.03:
"The base amount for calculating the next year’s tax increase limit shall be the amount of property taxes to be collected in the current year".
Back on November 6th, 2009, Assemblyman Patrick Flynn published an excellent primer on the tax cap; definitely recommended reading.
While the Municipal Taxpayers League has been an early supporter of tax cap reform, Birch already has picked up a key ally in Anchorage Mayor Dan Sullivan, who expressed his support for the change on January 12th. Other expected Assembly supporters include Jennifer Johnston, Bill Starr, Debbie Ossiander, and Dick Traini. On the other hand, Mike Gutierrez seems likely to vote No at this point.
Update February 2nd: Proposed Taxpayers Protection Act fails; rejected by a 6-5 vote. Voting against it was Patrick Flynn, Mike Gutierrez, Elvi Gray-Jackson, Harriet Drummond, Dick Traini, and Paul Honeman. An 8-3 Yes vote was needed to put it on the ballot.
Chris Birch, who has served two terms, is one of the two Assembly Members representing South Anchorage (Section 6), and is up for re-election this year. He filed a letter of intent on November 30th, 2010 (click HERE, type in 2011 in the box labeled "Candidate For", then click Search - you'll see the whole list of municipal candidates). A presumptive opponent is former Teamsters official Michael Kenny, who filed a letter of intent on November 16th. Kenny ran unsuccessfully against Birch in 2008.
This is a great opportunity to undo the damage inflicted by former mayor Mark Begich to the integrity of the tax cap in 2006. It is particularly inappropriate to include non-taxpayer revenues in the baseline to deliberately inflate the tax cap. Contact information for all Assembly Members available HERE.