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Wednesday, August 15, 2018
HomeColumnsFellow conservatives: Let’s refocus, return to advocating for fiscal responsibility

Fellow conservatives: Let’s refocus, return to advocating for fiscal responsibility

 By PETER J. CALTAGIRONE
GUEST COLUMNIST

I respectfully submit that conservative voices in Anchorage should consider refocusing their priorities. In the months preceding Anchorage’s recent election and voluminous debate over the 2018 Anchorage municipal ballot measures, I grew frustrated by the myopic focus of my fellow conservatives advocating for Proposition 1, the “bathroom bill,” while speaking out very little, if not remaining completely silent, about the fiscally irresponsible ballot measures voters were asked to approve.

I don’t stand in judgment of anyone who voted for Proposition 1; rather I suggest that we re-focus our advocacy efforts toward issues of broader consequence.

Hawkins

Seemingly absent from debate was the $98 million in new bond debt Mayor Berkowitz and the Assembly asked Anchorage voters to approve. The voters showed up in record numbers this year and passed all bonds, many by large margins. The left, which currently controls the Mayor’s office, Anchorage School District and Assembly, are passing larger and larger budgets while pushing routine obligations that should be budgeted for, like maintenance, into bonds. Voters are then told that if they don’t approve the bonds, they don’t support schools and parks.

Where are the conservative voices to counter this narrative?

To review, seven propositions sought voter approval for new general obligation and school bonds. This new debt doesn’t exist in a vacuum; it further burdens an already heavily-leveraged tax base. Here are some numbers to consider as this plays out in the coming years:

Despite a continued net decrease in Anchorage’s population the last five years, the budget for the Municipality increased over $11.5 million from 2017 – 2018 to $520.5 million, the highest in Anchorage’s history. Annual debt service on currently outstanding general obligation bonds makes up 11.4% of the 2018 Municipal budget, or approximately $59.3 million.

In addition, the Anchorage School District’s 2017-2018 budget burdens Anchorage taxpayers with annual debt service of approximately $39.2 million. (This number doesn’t include the $43.4 million in annual debt service payments paid from state sources.) Because voters approved Proposition 2, the ASD now adds $50.7 million in new debt to its current debt obligations. This new debt is solely borne by Anchorage taxpayers. Most of Proposition 2 involved roof repairs to Anchorage schools. Although I’m a strong supporter of education, I question why these items are being separately bonded instead of included in the annual maintenance budget for ASD.

Propositions 3 through 8 involved new bond debt for Municipality projects totaling $47.3 million. The bulk of this new debt approved by voters was in Proposition 3, which sought approximately $33.9 million for capital improvements. The other propositions were for bonds between $1 – 4 million for parks and public safety-related projects.

However, the new debt obligations now facing Anchorage taxpayers are not limited to $98 million. Recall that in December, the Assembly approved Mayor Berkowitz’s plan to incur an additional $68 million in new pension-related debt, creating a $6.4 million dollar annual debt-service liability for the next 15 years. Now that voters passed Propositions 2 through 8, these bonds will add an annual debt-service liability of approximately $8.52 million. These payments can last up to 20 years.

In sum, the cumulative, annual debt service liability to Anchorage taxpayers will increase from approximately $98.5 million to $113.42 million. Further, our individual share of these obligations is growing because the Anchorage tax base is shrinking when you take into account the net migration of people and businesses out of Anchorage.

Exacerbating the problem, Proposition 11 sought to lure homeowners into paying lower property taxes, at least temporarily, through a higher property tax exemption. Not surprisingly, it passed overwhelmingly because voters were not given the full story. Since the Municipality’s budget and debt burden is increasing, Newton’s Third Law applies; every action has an equal and opposite reaction. Proposition 11’s reduction in tax revenue has to be reconciled somewhere.  One possibility is future adjustments to the mill rate that would effectively eliminate the reductions to a homeowners’ tax liability.

A more immediate possibility is the tax burden may simply get shifted to commercial properties, including rental properties. If you rent an apartment or own a business in Anchorage, you will pay materially higher rent or taxes, respectively. Our business community is already stretched thin by a recession, high costs and a declining population. Goods and services, already at a premium in Anchorage, will only get more expensive as these increases get passed through to consumers. This may ultimately affect jobs as well.

Anchorage taxpayers already pay a high amount in property tax as a percentage of home value compared to national averages. Property taxes can only match the climb of our ever-increasing budget and debt burdens to an extent. As a tax base, we are rapidly approaching the point where continued increases in property taxes are no longer sustainable.

Other taxes will soon become necessary; we have already seen this with the new Anchorage gas tax implemented in March. If other debt-laden cities are an indication of things to come, we risk implementation of a sales tax and/or a municipal income tax. These new taxes will burden everyone.

Many Anchorage voters are simply unaware of the significant, long-term implications our increasing debt load has for them. Additionally, in the context of bond measures, the average voter fails to question why these maintenance items are being bonded for when the time for repairs and maintenance is nigh, not planned for in budgets. It is our job to educate voters in a persuasive, non-polarizing manner. As conservatives, we are supposed to be the bulwark against reckless borrowing and spending; we should spend our political capital accordingly.

We need to be better advocates for sound fiscal policy. We need to be the leaders who demonstrate that support of schools and responsible budgets are not mutually-exclusive. People can relate to these basic concepts from their own personal budgets.

It’s time to run a cost-benefit analysis in how we choose to brand ourselves as conservatives. Let’s not use up our political capital pushing measures like Proposition 1. If it passed, Proposition 1 would not have advanced public safety in any measurable amount. Transgendered individuals make up only 0.6% of the national population and the behavior most conservatives were worried would occur is already, has always been, and will always be illegal.

On the contrary, refocusing our efforts on issues of broader consequence will pay dividends. We should market our fiscally conservative principles so voters better understand the real consequences of irresponsible budgets and debt burdens. These issues affect everyone. A return to responsible budgets will have real, measureable results for Anchorage’s economy and allow for investments in public safety that can help arrest our rising crime rates.

Let’s keep our eye on the ball. Together, let’s refocus our advocacy toward the benefits fiscal conservatism brings the everyday voter.

Peter J. Caltagirone is an Anchorage resident, property owner and trial lawyer licensed in five states, specializing in Oil & Gas-related litigation. 

 

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • A woman’s safety is less important than $? I agree that we need to fight for fiscal priorities, but if you don’t fight for moral ones, then you end up with a city that will just become immoral and crime-infested. Oh yeh, that’s where we are. What’s really sad is his lie at the end that the behavior is already illegal; I guess he doesn’t read much news and see where it has already become an issue where men are using the transgender ruse to enter women’s locker rooms. It’s not a fantasy, it’s already happened. Remember the one in Congress who stood against bad fiscal policies, and stood their ground, also happen to be the social conservatives. They are the consistent ones out there, because they know foundationally what is right and wrong in social and fiscal issues.

    • ya men are flocking to women’s restrooms in droves now right? nope…..
      And the ever increasing debt load and taxes are going to do far more harm then a gu who chops off his penis using a girls restroom will.

  • Oh, it’s also helpful to get real conservatives to vote because they recognize the danger. Too bad Anchorage has so few left.

  • Thank you Peter. This is spot-on.

  • Good points, all.
    Problem is Anchorage’s new vote-by-mail system, inadvertently or otherwise, assures conservative ideology stays dead.
    Maybe it’s time for a sales tax, municipal income tax, and for reviving the personal-property tax.
    Then productive citizens might vote with their feet like they did in the 80’s, crashing the economy and causing government to starve itself into a reasonable size.
    Now there’s a ball you can keep your eye on!

  • Sounds like we have new, and electable voice in Anchorage for conservatives.

  • Thank you for taking the time to write about the recent election. A couple of thoughts come to mind. First, people tend to get behind issues that grab them emotionally. That was certainly true for Prop 1. People of both sides of the argument were charged up. What I find strange is that as a city, state and country we have come to the point where our leaders are more concerned about 0.6% of the population than the other 99.4%. But the other takeaway on this point is that while your outline of the fiscal measures voted on in the election is spot on, it does not stir any emotion in me. When dealing with numbers it’s often helpful to put them in some context that folks can wrap their minds around. Something to raise the emotional reaction to the numbers. Secondly, and perhaps more importantly, it seems fairly obvious that Anchorage with a left wing Mayor, Assembly and School Board, is in fact now just North Seattle. I see no signs of this trend changing so until the pain threshold on taxpayers is reached we can expect more of the same.

  • Well said Peter. The $1 million spent by opponents of Prop One certainly turned out voters who weren’t fiscal conservatives.

  • There is nothing illegal about a grown man entering a girls locker room at one of our pools or rec centers and staring at kids undressing. We changed the law on behalf of an incredibly small percentage of people who are suffering from a psychological condition, gender dysphoria. My brother has a psychological condition too, acrophobia. Shouldn’t he be able to demand that no buildings can be over one story high so his condition doesn’t limit his access to various services? Sound outrageous? Welcome to the brave new world.
    As for bonds, the city is violating the policy my administration implemented that we would only issue bonds in an amount less than what we are retiring. To the school districts credit, they are still following that policy. Policies like this are one of the reasons we achieved a AAA bond rating.

    • To the school district’s “credit”, Anchorage seems to be burdened with one of the most unjustifiably expensive, least productive education industries in the country, but the thing does seem to have an enviable skill when it comes to fulfilling its Prime Directive, which is Get More Money.

  • Excellent points by a finely dressed writer; agreed to almost all! Fiscal conservatism does indeed benefit the average voter. Annual debt service liability to the Anchorage tax payer is nauseatingly growing and was fed by this last election. Sound fiscal policy is decidedly lacking by the current administration. Were the fiscal conservatives not energized? Are there no longer enough of us? Peter seems to suggest that somehow Prop 1 sucked all the juice out of the election that could have been directed elsewhere. Others have suggested Prop 1 contributed to the mayoral challenger’s defeat. It is laughable to suggest that Prop 1 was somehow a “drag” on fiscal issues or the conservative mayoral candidate’s campaign. Here’s why:

    Prop 1 polling in February showed Republicans SUPPORTED Prop 1 by an overwhelming majority, 74% to 20%; that was on an “uniformed” ballot test. On the “informed” ballot test, the lead broadened to 80% to 17%. Mayor Dan Sullivan in 2012, unified the electorate by simply saying, “It’s appropriate for the voters to decide what policy they want.” He didn’t campaign loudly against Prop 5, but he unified the base. That’s what a smart politician does. Don’t alienate your base and you come across as reasonable to both sides. Rebecca Logan came out against Prop 1.
    Prop 1 simply gave the people a voice to return to the centuries old tradition of honoring biological differences in private places.
    The last count I checked Prop 1 had 36,234 YES votes compared to 28,020 votes for Rebecca Logan. It defies common sense that a better-performing issue on the ballot somehow is to blame for the fiscal conservative candidate’s loss, or diverted energy from other fiscal issues.

    The harsh reality is this: Prop 1 received at least 8214 MORE votes than Rebecca Logan.

    Prop 1 was outspent by about 7 to 1, and achieved 47.3 percent of the vote. Logan was outspent “only” by a factor of 2.3 to 1 and she achieved 37.1 percent of the vote. Logan misjudged her base. In 2012, Dan Sullivan was re-elected by a wide margin and Prop 5 was crushed by a wide margin. This is what happens when there is synergy — rather than dissonance — between a candidate’s campaign and a high profile ballot issue campaign. Conservatives achieve victory when we work together.

  • Well said Kim!

  • Don’t call yourself a conservative Peter. You are a liberal Republican and not representative of the party. Reagan knew the three legged stool of real conservatism revolves around fiscal, social and national defense policies. As Logan just adequately demonstrated, true conservatives have very little patience for candidates weak on moral/cultural issues who align themselves with left leaning ideas. Liberty, according to our Founders, has to be undergirded by virtue. Samuel Adams said “virtue is the surest means of securing the public liberty” and virtue always is centered on truths established by the Almighty. Hearing yet another liberal Republican talk about separating the moral foundation from the party and platform is nauseatingly predictable and will get our shared interests of fiscal constraint absolutely nowhere.

    • not biased at all right? oh wait, you led and failed the charge for prop 1… Maybe trying to legislate your morals onto everyone else instead of letting business decide wasn’t a smart idea. and you’ll continue to fail because you’ll focus more on moral issues then fiscal ones, giving the liberals more power in Anchorage.

  • Instead of rhetoric, let’s put together a plan:
    1. Stop Raiding the CBR. It has to be paid back! When? How?
    2. End the Dividend with a final $3000 this year. (one time expense)
    3. Draw no more than 4% of PF Value from the PF Earnings ($2.6 billion this year) to help pay for the annual cost of State government.
    4. Pay off the oil tax credits 100% asap. (one-time expense)
    5. Re-fund the CBR with $5 billion from the Earnings Reserve.
    6. Re-instate the former income and head tax but at very low rates (5% of fedtax, $100/yr).
    NOW let’s see how the books balance!

    • Makes perfect sense…

      Reward the lobbyist-legislator team who has spent us into oblivion by stiffing productive Alaskans with a damned income tax and confiscating their dividends.

    • Taxation is theft.

  • Alaska was run off the fiscal cliff by so-called ‘conservatives’.

    It might be a good idea for ‘conservatives’ to address that reality.

    • Respectfully disagree…

      Alaska was spent into oblivion by a self-serving lobbyist-legislator team, including people who may have -masqueraded- themselves as conservatives.

  • “a self-serving lobbyist-legislator team, including people who may have -masqueraded- themselves as conservatives”,

    You just described the Republican majority legislatures from the last several years..