Two members of the Anchorage Assembly are proposing a sales tax that could go to voters in April.
The bill would impose a 3% tax on a variety of consumer products at the point of sale, but many Exemptions are provided.
“It’s intended to revitalize Anchorage,” Sarto said of the measure.
The measure, the culmination of more than a year and a half of work by a coalition of business groups, essentially combines two separate tax proposals into one. Two-thirds of the money raised would go toward tax breaks for property owners, diversifying the city’s coffers while canceling a large portion of annual payments to the city.
The remaining one-third of the sales tax goes toward improving the quality of life and amenities for city residents. Sult said elements of the proposal are projects that rolled into Anchorage at the height of the oil boom, with large sums of state money paid for major development projects such as the Alaska Performing Arts Center, Sullivan Arena and the Lussac Library. Compared to the 80s. Prominent citizen investment.
“Our philosophy is we want this to be a place for us and a place we want to live,” he said.
The measure expires after seven years, but may be renewed and continued.
Salto and Rivera are sponsoring the ordinance, a project designed to “grow Anchorage’s economy and make Anchorage a better place to live, work, and play for all of us.”・It was born out of an initiative led by the Anchorage Economic Development Corporation called Anchorage.
The group modeled the quality of life portion of the tax proposal after policies implemented in Oklahoma City in the 1990s. The 1% sales tax has been paid for beautification and amenities such as new canals, waterfront entertainment districts, sports stadiums, and downtown areas. Library and Convention Center.
(LaFrance is proposing to sell unbuilt prefabricated structures once intended for homeless services to the Port of Alaska.)
In Anchorage, as laid out in the current sales tax draft, one-third of the revenue, minus administrative fees, would go to a so-called trust fund dedicated to municipal projects. A group of seven people will be appointed by the mayor to serve as an advisory and oversight committee, which will require council approval. That board would then decide which local projects to fund.
Mayor Suzanne LaFrance said in a statement that the proposal was an “important conversation.”
“We need to talk about how we invest in ourselves as a community and where we can get the best return on investment. Our team has had meaningful meetings with the Project Anchorage Coalition and We look forward to further conversations as the proposal develops.”
Sult rattled off concepts that have come up in previous discussions and calls for ideas, including an indoor market and food hall, a Ship Creek riverwalk and entertainment district, an aquatic center, and a downtown arts development and sports complex. Announced.
“This is not for existing projects, so it’s meant to replace school bonds and road bonds, and it’s meant to be something new,” he said.
Sponsors envision that investment income from the trust fund will be used to “improve the operations, maintenance, and safety” of the new facility. This is very different from how the City has handled Project 80s buildings and similar large investments, which were paid for through capital appropriations, and the City was sometimes left with the burden of paying for the upkeep of major buildings. .
According to AEDC, conservative estimates suggest that a 3% sales tax would generate $180 million in revenue annually. That includes approximately $60 million annually for municipal projects and $120 million for tax relief for property owners.
“People want property tax relief,” Sult said.
For homeowners, this would mean a reduction of $265 per $100,000 of assessed home value, according to the draft ordinance’s projections. If your home is worth $400,000, you’ll pay $1,060 less in property taxes the year after the sales tax goes into effect.
Compared to many other cities, Anchorage’s property taxes are high, even though residents have a relatively low overall tax burden. In the absence of extensive state, local sales, or state income taxes, Anchorage’s municipal services and government are paid for primarily through property taxes. The new sales tax is being pitched in part as a diversification measure, relieving pressure on home and property owners by shifting the tax to a broader group of consumers, including in-state and out-of-state visitors.
“In order to reduce the regressivity of the general retail sales tax, exemptions will be provided for transactions of common and basic necessities,” the order states.
The list of exemptions is long and includes things like gas, most groceries, medical care, childcare, baby essentials like diapers and formula, rent payments, yard sales, and a few more. Certain transactions over $1,000 are not taxed, so whether you buy a new car for $40,000 or a generator for $1,200, neither will have a taxable value of more than $10,000. Taxes will be less than $30.
But many consumer goods, restaurant meals and services will be subject to the tax, as will some products that are already subject to the tax. For example, alcohol and marijuana would be taxed twice under the proposal.
Sult said he wants the measure to include a seven-year expiration clause because he believes residents will need to opt-in if it is reauthorized.
“I don’t trust Congress, I don’t trust bureaucrats, and this is my poison pill…I want to be properly protected,” he said.
The bill is scheduled to be debated in a work session on Thursday before being formally introduced to the full Congress. Public testimony will then take place.
It is not yet clear whether a majority of the chamber’s 12 members will support putting the measure before voters on the April ballot. When early versions of the sales tax proposal were announced over the summer, two former Anchorage mayors expressed skepticism about voters’ willingness to support such a provision.
If the proposal goes to a vote, it would need support from a simple majority of voters to take effect.
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