By AARON LOJEWSKI
After a series of special meetings of the Fairbanks North Star Borough Assembly seeking to break the decades-popular “tax cap” via a special election proposition, the Assembly voted 7-2 to advance the $10 million tax increase question to the voters in a special election on May 7, 2024.
Voters will need to vote “No” to protect the tax cap and prevent a large $10 million tax hike.
The Assembly chose to put it to a special election in May rather than the October election, even though they just “found” an extra $13 million over the last couple of weeks that one Assembly member referred to as “magic money.” They know local voters have overwhelmingly renewed the tax cap for decades. They are hoping to suppress the voice of the voters who typically participate in the regular October local election and skew the electorate in favor of special interest groups by spending $125,000 to hold this special election in May.
If the grassroots turnout at the meeting is any indication, it won’t work.
Scores of citizens turned out to testify against the special election to break the Tax Cap. Based on the looks of contempt on many of the assembly members’ faces during the meeting, which started at 5:30 p.m. and lasted beyond midnight, the assembly had little respect for the will of the voters. They appeared to be caught completely off guard. Still, they pressed on with their plan even though testimony was about 3 to 1 against the proposal.
The ordinance claims the proposed increase in taxes is for education. In Alaska, it is unconstitutional for funds to be dedicated and bind future elected bodies. The state has a constitutional duty to fund education to the basic need. This means that even if all of the proposed $10 million in new borough taxes went to education this coming year, the extra $10 million in subsequent years can and will be spent on any valid expense, such as labor agreements, at the whims of future assemblies.
At the same time as politicians on the Assembly are trying to trick local voters into raising taxes on themselves, the borough is in labor negotiations with three bargaining units. Negotiations typically wrap up in the fall of a mayoral election year, as this year is, and the contracts are valid for three years. There is no question that a large influx of new tax dollars in the middle of negotiations will invigorate the unions to successfully negotiate better compensation packages for themselves, helping themselves to the new influx of cash.
For this reason, massively increasing taxes in the middle of labor negotiations would put the borough at a strategic disadvantage at the negotiation table and in the end would unnecessarily drive up long-term labor costs. This also means that in the long run, much of these new tax dollars wouldn’t make it to fund education but rather drive up labor costs.
The tax cap has worked well over time by keeping government growth in check. It limits the total tax revenue the borough can raise but it also allows the revenue to grow with inflation and population growth. This lets the government maintain its scale over time even as the borough changes. It has frequently gained the ire of those who want to raise taxes and waste public resources.
Official special election information is available here.
Business owner Aaron Lojewski served on the Fairbanks North Star Borough Assembly and was term-limited from serving after October, 2023. He is a candidate for borough mayor.
