Fairbanks voters may choose between taxes

FAIRBANKS (AP) Voters in Fairbanks may be choosing between a sales tax and increased property taxes in the fall.

The Fairbanks City Council voted this week to place a pair of measures on the Oct. 7 ballot that would raise property taxes to finance city operations.

If a citizens' initiative to instead lower property taxes and implement a sales tax also makes it on the ballot, voters will get to choose which option they prefer.

''We'll raise our property taxes, we'll lower our property taxes,'' said Fairbanks Mayor Steve Thompson. ''That's basically what they're going to be looking at.''

The tax issue has divided Thompson and some members of the council. The debate began when a citizens' group introduced a proposal to implement a 3 percent citywide sales tax and limit city property taxes to $50 per $100,000 of real property, down from $651.60 today.

The sponsors of that proposal must gather 1,607 signatures by Friday to get the measure on the ballot.

Supporters of the sales tax, including Thompson, argue it would spread the tax burden and raise enough money to help offset the loss of state aid and pay for rising retirement contribution rates and the cost of needed road repairs.

''It's the most equitable, least regressive tax that we have,'' Thompson said Monday. ''It's probably the best way that we can actually look at making our city whole and raising money.''

But sales tax detractors argue it would hit the poor too hard and give an unfair advantage to businesses outside the city limits.

Council members Jerry Cleworth and Jeff Johnson introduced a pair of ordinances to put other revenue measures on the ballot as an alternative to the sales tax.

The first ballot measure proposes raising the city's tax cap by $1 million. If the city applied the entire $1 million increase to property taxes it could be apportioned to other taxes as well the result would be an increase of the city property tax by 0.76 mills, or $76 per $100,000 of assessed property.

The other ordinance proposes raising the city's mill rate by 0.5 mills, or $50 per $100,000, for one year to pay for major road repair equipment and work.