FAIRBANKS (AP) A proposed initiative to substitute sales tax for most city property tax has received the ''unofficial support'' of Mayor Steve Thompson.
Thompson's stance is at odds with several council members who support paying the city's bills by increasing existing taxes.
Thompson said the sales tax proposal, which would implement a 3 percent sales tax and drastically reduce property taxes, has grown on him as a way to help the city overcome looming deficits.
Thompson estimates the city will need $3 million a year in just a few years to counter the loss of all direct state aid and a major hike in how much Fairbanks will have to pay into the state retirement fund. He said the sales tax could raise that much without hurting city businesses or falling heavily on the poor, calling the tax ''the only way the city could be made whole again.''
Thompson said his only direct involvement with the citizens group backing the sales tax has been to answer their questions and give them advice. Council members Donna Gilbert and Jerry Cleworth, who oppose the sales tax, contend Thompson was more deeply involved with the group.
Cleworth has co-founded a group opposing the tax, while Gilbert has publicly derided the proposal. Both argue the tax is regressive and bad for businesses within city limits.
As an alternative to the sales tax, Cleworth and Councilman Jeff Johnson have introduced a pair of ordinances to raise money through other means.
Peninsula Clarion ©2013. All Rights Reserved.