SitNews - Stories in the News - Ketchikan, Alaska


Ketchikan's Tax Burden
By Rodney Dial


June 06, 2011

It’s been a while since I last wrote a letter… in part because my wife and I have worked two jobs, seven days a week for the last three years.  The time I have off is very precious to me.

I was optimistically hopeful that Ketchikan government spending was leveling off, and our elected officials were going to cool it on the insane spending over the last few years.  I truly thought… what else can they spend money on?... just about every group has received something, lately, and government spending has been increasing by millions per year even though our population has been declining.

As you may have recalled our Governments promised us… repeatedly…that support of projects such as the new pool would not result in our taxes going up.  They often said this with a straight face knowing that moving around pots of money would make their statement technically true.   However when the entire expenditures are compared to total revenue the money just isn’t there.  Anyone with a moderate level of intelligence knew that local government was playing a shell game that would, and has resulted in higher taxes.

The following is a short recap on money spent on your behalf over the last few years:

  • New Pool 23.5 Million
  • Library plans…not used and now obsolete 1.3 million.
  • New Library (millions and counting) cost overruns have already started even though construction has not.  600 thousand increase due to poor soil conditions, hundreds of thousands for an upgraded heating system, and an estimated 150 thousand dollar yearly operating increase over the existing library, etc.  Keep in mind that we still have to heat and maintain the Centennial building after the existing library shuts down, and the new one is opened.
  • Schoenbar remodel… 3 times original estimate…. millions.
  • Million to replace a 12 year old roof on the recreational center that should have lasted 20 years.
  • Half Million given to First City Players, plus tax exempt status and yearly grants.
  • Yearly grants to the Arts council and tax exempt status.
  • Hundreds of thousands for statues that were 100% over budget.
  • Stain glass art for the harbors (seriously) some of which I believe has been broken by vandals.
  • Coast Guard Beach Purchase
  • Berth III 30+ Million
  • Millions for a new Fire Station, because in part, we were told that the old one was not up to code (FYI, code changes all the time).  Removed valuable property from the tax roles.
  • Millions for new borough offices, when they could have rented offices for a fraction of the cost.
  • 100 thousand to pay a company to tell local government how tourists should walk down the street.
  • Insane amounts of money for the visually challenged galvanized pole signs down town, some of which were printed backwards and had to be replaced (more money).  On a side note here I find it interesting that the galvanized pole signs are ok, but the fiddler-on-the-roof art on one of the buildings on Creek Street, was not allowed because it did not fit with the theme of the area…go figure.
  • 100 thousand for an employee wage survey that was going stale the moment it was finished… that the University of Alaska would have probably done for free.
  • Guaranteed taxpayer support for the Aquarium.  Even thought is amounts to taxpayer funding of an entity that will directly compete with our local businesses.
  • And on… and on…

Regardless of if you feel some, or all of these purchases are appropriate keep in mind that both Governments are, and have been operating on reserves, and can’t maintain the infrastructure we already have.

  • Remember the bridge repair in town that “Karl the-no-other-idea-to-any-problem-but-raise-taxes Amylon” said would require a sales tax increase to fund?
  • Remember the 27 million that is needed to repair Berths I and II that the City says “Are exhibiting advanced stages of structural deterioration”
  • Remember the 100 million dollar contract for Berth IV?  After the first voter rejection of the Berth III bonds, City officials knew the voters would not approve about 30 million in bonds for Berth IV… so they just entered into a contract to avoid a vote.  To put this in perspective… this is approximately 8 thousand in liability for every man, woman and child in Ketchikan.  Although CST revenue is supposed to pay for this, the tax payers are ultimately responsible.  If we have a double dip recession we are screwed.   Further, by the time this contract is finished the useful life of the structure will be over, requiring replacement.
  • How about the fact that the borough will soon, lose over 1.2 million per year in US Forest Service Receipts?  My understanding was that large areas of land were incorporated into the borough years ago to capture these funds and that we will soon have the responsibility of providing services to these remote areas, but without the funding to support those services.
  • Millions needed for port and harbor improvements, and on.. and on.  Expect the City Manager and leaders like Mr. Shay to request voter approval for bonds for this soon.

If the things mentioned so far in this letter bother you, don’t hate the messenger.  They come from the City’s and Borough’s annual legislative funding requests.  Their words, not mine.

I know that the moment our financial situation is really examined, supporters of excessive spending turn to emotional arguments, because really the facts are… what they are.  I would like to respond to the boilerplate arguments that we always hear for why we should spend ourselves into oblivion:

  • Rationalization #1…. “I don’t mind paying more taxes for “x”.  This group realizes that current funding can’t support their project so they rationalize it with an emotional argument to justify the increased tax burden.  This emotional card has been used many times.  Remember being told that if we didn’t approve the biggest, and most expensive of the pool projects (vs. renovation) “kids would drown” (Mayor Kiffer), or how about the yearly plea to fund the “Arts Community” saying people will not want to live here if we don’t fund “x” art project, PAC, etc.  This seems to fly in the face of logic considering that as art and non-profit funding has gone from “0” in the past to large amounts now (500k just for First City Players new building) that our population has DECREASED SIGNIFICANTLY.  Is it really too much to ask for “Performance Measures” of the non profits receiving public funding?
  • Rationalization #2… “We are under-taxed and get a PFD, so we should raise taxes for “x”.  This is a blatantly untrue statement in many ways.  As reported by local Governments, your local tax burden is now $11,826 per family (FY2010).  Most people do not think they are taxed at any where near that amount, because they simply don’t see it.  In addition to the direct sales and property taxes you pay, every business passes on their taxes to you.  You also pay KPU’s Payment in Lieu of Taxes passed on in your utility bills, and for a myriad of other things.  Do you realize that sales taxes are passed on to you when you buy gas?  Gas that a retailer sells for $4 a gallon, costs you $4.24 a gallon when sales taxes are factored in, and the higher gas goes, the higher your taxes go.  We are all taxed in a thousand ways and do not even realize it.

The Tax burden for Ketchikan City residents is the HIGHEST in the entire region.  City residents pay 100% more in property taxes then residents in Sitka…. DOUBLE! Sitka also has a lower overall sales tax rate.  So for all you people who feel we are under-taxed please have the courage to tell us what you feel would be the “do not cross” limit on taxes?  If double the amount of other locations is not enough… then what is?

Our future will certainly contain massive federal tax increases.  Only foolish leaders would raise our local taxes now.

  • Rationalization #3… “Local Government has cut to the bone and without tax increases bad things will happen”.  I could write a book with all the waste of local government (will save that for another day) and will simply prove this wrong with a picture… worth a thousand words.

I took the following pictures at this year’s annual legislative party in Juneau, a few months back.   Each year our local governments fly numerous local officials and city/borough employees to two days of meetings, dinners, and partying in Juneau.  Your tax dollars RENT the entire Prospector Restaurant and Bar in downtown Juneau and thrown a custom catered event with FREE food and alcohol for anyone in JUNEAU.  This yearly event attracts hundreds of people, many of them young adults who come to get drunk at your expense.  This year in addition to the free bar and catered food, they also had smoked brie, various sea foods, gourmet desserts, and hundreds of door prizes.

jpg Free catered dinner for anyone in Juneau.

Free catered dinner for anyone in Juneau.

jpg Juneau Residents and Ketchikan City Leaders / Employees in the Prospector bar drinking free Alcohol all night, at Ketchikan Taxpayer expense.

Juneau Residents and Ketchikan City Leaders / Employees in the Prospector bar drinking free Alcohol all night, at Ketchikan Taxpayer expense.


This insane waste happens every year!  Other Southeast Communities do not spend tax payer money throwing a city wide party in Juneau each year, and guess what… THEIR TAXES ARE SIGNIFICANTLY LOWER!

How have your taxes been raised lately?

• KPU TAX….How many caught the “in the dead of the night” actions of the City leaders regarding your utility bills a few months back?  How many of you know that the City transferred responsibility for funding the non-profits to KPU?  That’s right, the entity that has a monopoly and provides your electricity, water, sewer, and for some of you telecommunication services, now funds various non-profits and uses part of your utility payments to “give away money” to various groups like the arts council. 

Had KPU not been made into a social engineering experiment they could have used their revenue to reduce or eliminate the “diesel surcharge” we are all burdened with, or to improve the water treatment situation to keep our water from containing cancer causing elements.  The City made this change because they can’t fund the non profits with existing revenue, and lack the courage to reduce spending.

• KPU TAX #2…. Your water rates have increased over the last few years at rates SEVERAL times that of inflation.

• PROPERTY TAX INCREASE… Even though City residents now pay on average DOUBLE the tax of other SE Communities, and have the Highest property tax in the region, On 6/2/11 City Government increased the mill rate EVEN HIGHER.  The owner of an average home in the City received a $250 increase on 6/2, which just increased your monthly tax payment by over $20 dollars.   This tax increase will also be passed on to you by all the merchants in town, so get ready for higher food and good costs. 

• Numerous fee increases

What really gets my blood boiling regarding all these taxes is that many of our local officials that support tax increases DON’T PAY THEM and are EXEMPT.  City council member Jack Shay is a prime example.  Shay, the architect of the property tax increase is eligible for a 150 thousand dollar property tax exemption, and 100% Sales Tax Exemption!  What does he care if taxes are raised?

Please Mr. Shay do tell us how you “paid your fair share” back in the days Ketchikan had a 1 mill property tax rate (has increased over 1200%, even higher if property assessments are considered) or when sales taxes were a third of what they are now.   If you truly represented ALL the people you would not claim ANY tax exemptions, or not vote on any motion to increase taxes.

It's well past time the citizens of this community exercise a little control of those that claim they are leading us.  Educate yourself on your family’s finances, and the direction our nation is heading regarding taxes.  We all face a reduced standard of living, longer working careers before retirement (if possible) the inability to support our children through college, the “pricing out” of our community to the point our kids can not afford to live here, and the inability to do the fun things in life because we simply can’t afford them.

If you think $11,826.00 is not too much of a tax burden for your family (more now that taxes were just increased) and that it is ok for your governments to spend tens of thousands of dollars throwing parties in Juneau… then there is simply nothing I can say except…  you’re a sheep…good luck, and may the government provide for all your needs.

Rodney Dial
Ketchikan, AK

Received June 03, 2011 - Published June 06, 2011



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Ketchikan, Alaska