The Fairbanks City Council last night gave initial approval to a measure that would ask Fairbanks voters to consider an increase in property taxes to fill a gap in the city’s budget caused by a cutback in state funding.
Fairbanks City Council members on Monday advanced a property tax ordinance for a public hearing and possible final consideration during the July 24th meeting. If approved, the ordinance would place a question on the Oct. 3 municipal election ballot asking voters to allow the city to increase property taxes by about $63 per $100,000 of assessed valuation.
Mayor Jim Matherly, who introduced the ordinance, says if approved the property-tax-hike revenue would raise about $1.7 million to replace cuts in state revenue sharing for such essential services as police, fire and public works. But only if voters approve.
“All this ordinance (does) is to put it to the voters in the fall,” Matherly said in an interview before the meeting.
The mayor says the council will ask for less of a property-tax increase if the state comes through with more revenue sharing than the half-million dollars the city estimates it’ll get this fiscal year.
“That is worst-case scenario, because we don’t have exact number from the state yet for our revenue sharing,” he said.
Councilman Jerry Cleworth opposes the ordinance and says it should be delayed. He says city officials have known for years now that revenue sharing would be cut as the state’s income from oil plummets. And he says unlike previous council attempts to gain voter approval of a property-tax hike, this one is being requested after the city’s budget has already been set.
“Usually we do it before an expense is incurred – that we know we’re going to have a problem in the future,” Cleworth said in an interview before the meeting. “This is the reverse of that.”
The council voted 3-2 to advance the measure, with Cleworth and Councilman David Pruhs dissenting. Councilman Jerry Norum was not present – because, Matherly says, Norum has resigned from the council.
Also Monday, council members agreed to delay consideration of an application for a retail marijuana shop in downtown Fairbanks.
The council was scheduled to consider whether to protest an application to open a pot shop at 503 Seventh Ave., at the intersection of Lacey Street. But Fairbanks North Star Borough School District Assistant Superintendent Sandra Kowalski asked the council to delay its vote to allow borough planners more time for ensure the shop is located far enough away from district facilities where students often are present.