October 4: Anchorage Daily News and Alaska's tax burden:

Posted: Monday, October 16, 2000

How burdensome are taxes in Alaska? Not federal taxes but state and local taxes.

Each and every taxpayer will answer that question differently. It's a matter of how you are doing in the world, how you see the world -- and individual finances. Some people making $40,000 a year think they are overtaxed. Some people making $100,000 don't.

Plus, Alaska communities approach taxes differently. Some have higher property tax rates than others. Some have sales taxes while neighboring towns do not. For that matter, some individuals and businesses use large amounts of products that come with a tax -- gasoline, for instance. And if you live in a cabin on the Kantishna River, you probably are paying few state and local taxes at all -- and getting few services.

Nobody pays a state income tax.

Whatever the differing circumstances of individuals around the state, here in Anchorage there are some basic tax facts that are hard to ignore.

First, property taxes are in the upper 40 percent of what Americans pay in the largest cities in the 50 states and the District of Columbia. Anchorage ranked 19th in tax burden among these 51 cities, immediately behind Boise, Omaha and Atlanta, immediately ahead of Billings, Jackson, Miss., and New Orleans.

This is significant, not to be dismissed -- and the basis for an argument that Anchorage needs to diversify its municipal revenue sources. Although, please remember, that's not easy to do since local law requires 60 percent of the voters to approve new taxes.

At the same time, the total tax burden of folks in Anchorage is lower than in any of those 51 cities. A federal survey, reported in a Sunday Daily News story, demonstrated this.

Jacksonville, Las Vegas, and Cheyenne rank 48th, 49th, and 50th.

Anchorage is 51st.

The survey concluded that a home-owning family with a gross income of $75,000 would pay $2,679 in local taxes in Anchorage. That same family would pay $17,866 in state and local taxes in Bridgeport, Conn., the top-taxing community in the survey.

Beyond that, the family in Bridgeport does not receive an Alaska Permanent Fund dividend check. This year, the dividend is far greater than the local tax burden for that Anchorage family of four.

Daily News editors have heard stories from aggrieved callers about how they or someone they know has been ruined by tax. Undoubtedly, there are stories like this that are true, although the people involved must have had some degree of culpability, too.

But you can't run a city on anecdotes. And you can't build a tax system on anecdotes, either. There always will be a story of somebody who got a raw deal from the government. Or thinks they did.

The fact is: The total tax burden for Anchorage is the lowest among the 51 largest cities in 50 states and D.C. We are in good shape on taxes compared to other Americans -- if we are prepared to believe it.

Sure, inefficiencies exist in government. Money could be more wisely spent. But the tax cap initiative is not the answer. It will lower property taxes, all right -- and push Anchorage in the direction of an ugly, rinky-dink town where the streets are dirty, the libraries closed, and the schools inadequate.

Anchorage is a city of opportunity. People pay taxes, in part, to ensure that the opportunities, economic, social, and cultural, continue.

We trust that most people in Anchorage, after they have compared their situation to that of residents in other cities, will conclude this is a great place to live. And that the tax cap is a draconian, intemperate response posed to whatever legitimate concerns Alaskans have about their taxes and the future of the state.

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