Mayor, Councilman Differ on ‘Belt-tightening’ Need After Tax-Hike Ballot Measure Defeat

Oct 4, 2017

Fairbanks city voters turned down a ballot proposition Tuesday that would’ve authorized property tax increases to make up for reduced state funding.

Fairbanks Mayor Jim Matherly says voter’s rejection of the measure means the City Council must make cuts to cover a $1.7 million decrease in state revenue sharing.

“I’ve got to meet with all the department heads, meet with my city staff,” Matherly said Tuesday evening. “And we (will) look at tightening the belt – things to cut, things to consolidate. Who knows?”

Matherly says he intends to present some recommendations to the City Council on services that could be cut to save money.

“I’ve thought of everything from how often do we pick up garbage to how often we plow snow,” he said. “But, see, for a lot of taxpayers, that’s where the rubber meets the road. They don’t look at all the administrative work that we do. They look at the roads that have snow, and the garbage that’s piling up!”
Councilman David Pruhs, has a less dire take on the city finances.   

“We do not need a tax increase,” he said. “We have other revenue streams that will be increasing.”

Pruhs says that includes an expected rebound in property tax revenue.

“Our real estate taxes (revenues) were down one-and-a-half million (dollars) last year,” he said. “They’ll be up this year, no matter what. I’d say between two- and four-hundred thousand dollars.”

Secondly, Pruhs expects the burgeoning marijuana industry to yield more tax revenue.

“We budgeted $30,000 last year” in marijuana tax proceeds, he said. “In actuality, the revenue will be $300,000  this years.”

Pruhs also anticipates a windfall from several federally funded road-construction projects the city will head up.

“We have more than $75 million over the next five years of road improvements through the Department of Transportation that are federally funded. And the city of Fairbanks will be the lead engineer on this.”

The mayor says he and councilmembers will look for other ways to counter the decline in state support.

“The council has got to bear some responsibility for this,” he said, “and I want to hear their input. And they’re going to work.”

The mayor says he’ll only consider personnel cuts as a last resort.