Viewpoints: Letters / Opinions
RE: Taxes & Local Government
By Rodney Dial
June 03, 2013
Monday PM
Thank you Mr. Harrington for the kind words about me. I too appreciate most of your past efforts on the Assembly as one of the more moderate members…. however, regarding your statement about my letters:
“However sometimes he neglects to provide all the information. That is, of course, a strategy that is useful when trying to make a point emphatically”.
The point you try to convey is by not mentioning the mill rate decreases in prior years I was not providing the proper context for the recent mill rate increases. I actually did mention in my letter that the borough mill rate was lower in the past. The difference is you somehow feel that because you lowered rates in the past you are justified to raise them now, on top of two years of rate increases by the city.
I wonder if upon reflection you realize that the author failing to provide all the information is actually you? The information in my letter was accurate and taken from the borough and city documents.
I accept your challenge and will provide the information you failed to disclose to the public in your letter.
First, you mention a few years of mill rate decreases in the past, but fail to mention that our mill rate has been on a constant upward trend since the 80’s when the mill rate was “1” (now over 12 in the city).
You also fail to mention (and this is a big one) that in the years the mill rate was lowered, property assessments increased at rates far exceeding inflation. As you know, when property values rise, taxes rise, and that the only way to prevent a tax increase is with a mill rate decrease.
You list the years 2006-2012 as your examples. I am fine with that…let’s look at the full picture during that time frame.
In 2006 the area-wide assessed property value was just slightly over 1 billion dollars. By 2012, it had increased by 40% to 1.4 billion. During that same time inflation increased by 14% (source http://www.bls.gov/data/inflation_calculator.htm). This means that even if the mill rate remained the same, property tax collections increased by 26% above the rate of inflation. Some of that increase was due to new property being built /annexed by the borough; however most of it was due to property assessment increases by as much as 25% per year!
Yes, the assembly reduced the mill rate between the years of 2008-2012, however rising property assessments, growing at rates far greater than inflation, AND recent mill rate INCREASES have given all of us SEVERAL PROPERTY TAX INCREASES over the last few years.
The boroughs own documents point this out. For example in your letter you state that property taxes decreased from 6.0 to 5.8 mills between 2010 and 2011, however property tax revenue between these years actually increased by 10% (up 704,200 to 8,109,522). The net effect was that property tax revenue exceeded inflation by 7% in just one year. This has happened repeatedly over the years you claim to have “cut taxes”. In truth, you simply reduced the mill rate to limit the INCREASE in taxes the public was experiencing from double digit property assessment increases.
However, I don’t expect anyone to take my word regarding the ASSESSMENT INCREASES, that translated into PROPERTY TAX INCREASES Mr. Harrington, let’s take a look at what the Ketchikan Daily news reported during the years you mention:
KETCHIKAN DAILY NEWS ARTICLES 2006 to 2012
1/9/2006, Ketchikan Daily News… “Assembly Member Glen Thompson is correct when he says the borough must be "very judicious" when spending the public’s money. A large chunk of that public money comes from property owners, many of whom have seen increases recently in the assessed value of their homes, land and commercial property -- and faced higher tax bills as a result”.
2/1/2006, Ketchikan Daily news…”Ketchikan Gateway Borough property tax assessments are going up from 10 to 25 percent”.
4/24/2006, Ketchikan Daily News…”The property tax rate of 7.5 mills would stay the same under the proposed budget, according to borough Finance Director Michael Houts. The budget reflects a $609,000 increase in property tax revenue for 2007. Houts said Friday the increase is derived from a 5-10 percent increase in property values. Property tax revenue is estimated at $7.6 million in 2007”.
9/27/06, Ketchikan Daily News, Letter to the Editor (Mossburg Earl) Time for a new mayor! Mr. Weinstein's campaign promise for his first term election was "no new taxes." The reality is that under the Weinstein regime everything has increased. Look at your property tax (mill rate down/assessments up), sales tax, water, sewer, garbage, KPU rates up. Then there are the fees in lieu of taxes. Boat launching fees, harbor fees, landfill fees all increasing…
1/18/2007 By ANDREW DAMSTEDT Daily News Staff Writer Ketchikan Gateway Borough property tax assessments are going up again this year, with many residential assessments increasing up to 15 percent and commercial, land and condominiums going from 20 to 35 percent. The boroughs tax rate is $7.20 per $1,000 of assessed value. For instance, property assessed at $200,000 last year would have yielded a base borough property tax of $1,440 in borough property tax, not including any service area fees or the 0.9 mill for library services for out of city property. With a 15 percent hike in the assessment, even though the tax rate does not go up, tax bills are 15 percent higher. The home that was assessed at $200,000 a year ago is assessed at $230,000 if it has a 15 percent hike. The base borough property tax becomes $1,656.
4/25/2007 By ANDREW DAMSTEDT Daily News Staff Writer…”even though assessments have increased. The Assembly reduced the mill rate from 7.5 mills to 7.2 mills in 2006. Property tax assessments went up an average of 15 percent in January, so even if the mill rate remained the same, property taxes would increase by 15 percent”
6/5/2007 Ketchikan Daily News…”Thompson said he wanted to reduce the mill rate from the current 7.2 mill level to maintain revenue generated by property taxes. Property assessments increased this year by an average of 15 percent”.
2/9/2008 By ANDREW DAMSTEDT Daily News Staff Writer Ketchikan Gateway Borough residents should receive assessment notices this week -- and for virtually all that means an increased assessment. A spot check of assessments by the Daily News showed increases up to 15 percent. While not giving any specifics, Borough Director of Assessment Dennis Finegan told the Daily News Wednesday that he is seeing assessed values increasing for various property types reflecting market activity. The department mailed out assessment notices Monday. The boroughs tax rate is $6.80 per $1,000 of assessed value. The Assembly decreased the mill rate last year because of increased assessments. "The department is seeing assessed values increasing for various property types and property classes which reflect observed market activity," he said. Finegan said he didn’t know of any that decreased, but there could be a circumstance such as structural damage or removal of a building that would lower an assessment. Finegan did not give an average of how much property assessments went up this year because, he said, there is no "standard" increase for assessments. Last year, assessments went up by as much as 15 percent.
6/4/2009, By LEILA KHEIRY Daily News Staff Writer The Ketchikan City Council on Thursday will consider keeping the city’s property tax rate at 6.1 mills, the level on which the city’s 2009 budget was based. However, because property assessments announced in May were higher than the city anticipated when the budget was approved in December, 6.1 mills would bring about $177,000 more than budgeted, according to a memo from City Finance Director Bob Newell. The total 2009 assessed value of city property, personal and business, is $797,761,800, Newell reported. That is 3.65 percent higher than the 2008 assessment of $768,741,400
6/7/2012 By HEIDI EKSTRAND For the Daily News “The city of Ketchikan’s current 6.2 mill levy will be discussed at tonight’s Ketchikan City Council meeting. The decision will be based on a seesaw of numbers, with the most recent actual assessed property values within the city limits coming in higher in 2012 than in 2011 -- $808 million compared to $801 million.
So who is withholding information Mr. Harrington? No mention at all in your letter that property assessments have vastly outpaced inflation by an average of 26% during the years you tout being on the assembly reducing the mill rate. And…of course…as we all know now, assessments AND the MILL RATE are increasing….AGAIN… which equates to THREE PROPERTY TAX INCREASES this year (assessment increase, City and Borough Mill rate increase).
Let’s look at the second part of your letter where you try to claim that our mill rate compared to other boroughs is low and I have not put it in the proper context. Your list omitted critical information and was intentionally crafted to be misleading. The information you left out I am including for your edification:
HARRINGTON’S CLAIM
North Slope Borough 18.500 mills |
DIAL’S Response
Truth: first 50,000 of home property value is exempt in this borough. This makes the effective mill rate around 9 mills for a comparable home (Ketchikan City is nearly 30% higher) The high mill rate is designed to tax the oil industry on the N. Slope. Most homes in this borough pay NO PROPERTY taxes since they are owned by a native or governmental organization (nice try Mr. Harrington but you are completely wrong on this) |
| Fairbanks N. Star Borough 12.999 mills |
Truth: 20% of home property value is EXEMPT from all taxes in this borough. This makes the effective mill rate approximately 10 Mills (Ketchikan City is over 20% higher) |
Note: Many Boroughs exempt part of a home’s value from taxes. There is no exemption in the Ketchikan Gateway borough.
All the rest of the boroughs you listed are irrelevant as they all have “effective lower mill rates” due to a number of exemptions that reduce the amount subject to tax and/or are combined borough/city taxing units like Juneau and Sitka. I stand by my statement that Ketchikan (City) has the highest effective property tax rate in the State.
Another interesting tidbit you left out is that many of the boroughs you listed as examples have NO SALES TAX. I’m sure that was just an oversight on your part.
WHITE CLIFF
Things you didn’t say in your letter…
1. Why the assembly didn’t present the idea to the public to bond renovation of White Cliff and instead went around the voters. Owned the building…sold the building…bough it back. That doesn’t sound fishy to you? Really? I think you know better.
2. You also didn’t mention that White Cliff was the most expensive of all the options considered.
3. In your defense of the Borough Mayor and his impeccable ethics, you failed to mention how he has done things such as funnel half a million dollars of tax money to First City Players to construct “bathrooms” for tourists in the performing arts center (how’s that project working out?), how he supported consolidation (would have cost us millions), etc.
I think the Mayor is a nice guy and I have nothing personally against him…just don’t like his leadership and politics. I’m sure he realizes that public officials need to have thick skin and understand that public scrutiny comes with the job.
I stand by my belief that the reason the Borough Assembly did not ask the voters about White Cliff was because they already knew the answer. Mr. Harrington, people like you and the Mayor are elected to represent us…because we can’t each have a voice. If you know the answer is no…it doesn’t mean do it anyway. That is what gets you in hot water with the public and results in overspending, which has now lead to a tax increases.
We have a right to be upset with the three consecutive property tax increases and a right to be critical of the decisions the assembly made that led to them. Here is what I would ask of the borough assembly that just raised our taxes. At the yearly Juneau Legislative party, where you will spend 13,000 tax payer dollars on food and alcohol to wine and dine each other, have the courage to post a sign saying “Alcohol and Food Courtesy of the Ketchikan Taxpayer, some of which will lose their homes next year for failure to pay their property taxes – enjoy”.
Go back and read your letter Mr. Harrington. You are the one trying to mislead and withhold information. A politician indeed!
Rodney Dial
Ketchikan, Alaska
Received June 01, 2013
- Published June 03, 2013
Related Viewpoint:
 RE: Taxes & the Local Government By John Harrington
RE: Taxes & Local Government By Suzan Thompson
Re: Taxes & Local Government by Ken Bylund
Taxes & the Local Government By Rodney Dial
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