August 14, 2018
Tuesday PM

Here is my response to Arthur Martin's article No Property Taxes in the City of Craig? A Referendum May Make this a Reality.

At the very outset of the article it should have been made very clear this referendum calls for a gradual elimination of property tax over a six year period. The basic idea is that when we have a balanced budget, revenue windfalls, or reductions in spending be GIVEN BACK TO TAXPAYERS and not simply spent elsewhere as has been done in the past. If this protocol is followed, a six mill reduction over six years is neither excessive nor impractical and gives plenty of time for all necessary discussion and debate. It should be noted that the City of Craig currently has over $10 million dollars in a reserve fund as well as over $3 million dollars in a school reserve fund.

The article failed to mention that our budget proposals were just that - proposals - and would have to be decided ultimately by the people of Craig. Those proposals equaled over a million dollars much more than property tax brings in - and that people could not only pick and choose which they liked and didn't, but that they could come up with their own budgeting ideas as well. And they would have six years to do it. Some of the proposals are no brainers such as eliminating property tax eliminates the need for expensive property assessors as well as significantly reducing administrative costs relating to property tax.

As for police, the City of Craig has 10 full time equivalent positions, 5 of which are full-time patrol officers. My research suggests Craig has the highest per capita number of patrol officers in the State of Alaska, possibly the nation for all we were able to find out. If the ratio of patrol officers to square miles of jurisdiction is considered, the same conclusion is reached only magnified. I am often asked by visitors to Craig "Why on earth are there so many police here?" ! Residents have been asking the same thing for years. In addition to this high number of police, we have full time state troopers as well as forest service police here. Is it really outrageous to consider a reduction? Reducing two patrol officers and bringing Craig more in line with other Alaskan towns would save enough money to eliminate 1/3 of the property tax in Craig. As there is typically a high turnover with patrol officers, this could happen naturally over time through attrition. 911 and dispa
tch service would remain unchanged, as would jail staffing, DMV and DOT services.

All this talk about "saving one child from drowning is worth the cost of the pool" is absurd and demagoguery. The pool closure during summer months is one of many options meant to save taxpayers money, while still having children learn to swim, which they do during winter school months. Local people's use of the pool is also greatest during winter months, when the pool would be open. And remember, if you don't like the idea of closing the pool at all, fine, choose some other options - there are plenty to think about. However, it's worth considering that the pool is costing taxpayers approximately the same as the schools. Depending on what numbers are used for annual pool attendance, each time a patron uses the pool or fitness room he or she is subsidized by taxpayers from $100 to $150 per visit! Is this open for discussion? I would hope so.

The article suggests that we are proposing to cut city council health insurance benefits. This is wrong. City council health insurance benefits have already been cut, adding over $100K annually to the city budget. We are proposing that this windfall be applied to removing 1/6 of the property tax immediately.

Another consideration is that eliminating property taxes in Craig will ease the burden of future taxation from the state. The Alaska State Legislature is contemplating state income tax, sales tax, and permanent fund reduction or elimination.

On the revenue side, there are possibilities of windfalls in the future. A proposed 1% increase in sales tax could bring in approximately $300K annually to an already balanced budget. This money, intended for the aquatic center, would create enough surplus in the budget to eliminate 3 mills of property tax.

Another future possibility for a revenue windfall is internet sales tax. With a recent Supreme Court decision, it may be possible for municipal corporations to receive significant funding from this source.

I am not advocating either of these revenue sources, however if they come to pass I am advocating that the money generated to an already balanced budget be applied to tax relief directly to the people living in the city of Craig in the form of property tax reduction/elimination. This is what the referendum is all about.

Arthur's article was confusing with regard to property tax and mill rates. Here's some clarification:

Property tax in Craig is currently set at six mills. That means if you own a property worth $200K, your annual tax bill would be $1,200. Once again, Craig is the only place on POW with property tax.

The article implies that I am somehow dictating the way the Craig municipal corporation should be run. Exactly how is exercising an Alaska Constitutionally-guaranteed right to referendum - in this case to simply allow people to vote on how they are taxed - "dictating" anything?

Furthermore, the idea that because I don't own property in Craig and pay property taxes somehow makes me less credible is absurd. Would people find my ideas more credible if I was somehow lining my own pockets if the referendum is successful?

I attend council meetings arguably more than any of Craig's general public. I also obtain and study a copy of the city budgets and attend budget meetings, not to mention meeting with city officials and heads of departments, touring city facilities, and generally educating myself on city business. This referendum is the result of that experience in which I see the city municipal corporation as avaricious towards its residents while continually expanding the corporation - even though the city population has been flat, or declining, since the year 2000. It is also the result of seeing profligate and sometimes inappropriate spending such as close to a million dollars spent over the years on council health insurance benefits - the likes of which are virtually unheard of anywhere else in the state.

The signature gathering for the referendum has so far been met with amazing enthusiasm. There have been over 100 signatures gathered in a short amount of time. This is a strong signal that many in Craig are unhappy with the way they are taxed and governed, and that the status quo is no longer acceptable to them. They are willing to allow a vote to consider elimination of property taxes over a 6 year period. Most understand full well that without property tax, spending and revenue issues will have to change, but many believe those changes will be more of a benefit than a hardship. Let s not forget that every single property owner in Craig would benefit directly from elimination of property tax. That s not just a benefit for noisy special interest, like most non-essential city services provide.

If the people of Craig decide to eliminate property tax this October, I don't know for sure how different things will be in six years when it s fully enacted. But I would suggest you might be surprised at the positive effects for the vast majority of the people living here.

Thank You,

Andy Deering
Craig, Alaska

About: I am a resident of Craig, commercial fisherman, mechanic, welder, philosopher, author "The Best Life Money Can't Buy", and have a strong bias towards Liberty.

Editor's Note:

The text of this letter was NOT edited by the SitNews Editor.

Received August 11, 2018 - Published August 14, 2018

Related Article:

No Property Taxes in the City of Craig? A Referendum May Make this a Reality By ARTHUR MARTIN - Andy Deering and Lisa Radke have taken the initiative and went to the City of Craig to create a petition, that with enough signatures, will become a referendum in the upcoming election this year to get rid of property taxes. - More...
SitNews - August 08, 2018

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