On Monday night, the Fairbanks City Council approved an ordinance that puts a proposed property tax increase to public vote this fall. The hike is aimed at compensating for lost state revenue to due to low oil prices. During public hearing, former state revenue commissioner Mary Nordale of Fairbanks, told the council she served during the last major oil price slump recession in the 1980’s, which lasted two years.
“We’re not going to be rescued this time,” Nordale said. “The world is awash in oil and gas.”
City voters will be asked to approve raising property taxes by about $63 per $100,000 of assessed value, to cover for $1.7 million in lost state revenue sharing. Nordale described the property tax vote as a first step toward re-thinking how local government is financed.
“We’ll need to think seriously about the service that are rendered, what services we want, how intensively we need those services, how we’re going to finance them, and how the citizens are going to react within the confines that the financial strictures pose,” Nordale said.
Nordale advised the council to establish a committee, to examine city services and how to pay for them.
Council member Jerry Cleworth agreed, saying city codes guide spending, and how contracts must be negotiated have not been followed in some cases, making it tough to ask property owners to accept a tax increase.
“Before we ask people for money, I really think we need to get our house in order and do our jobs,” Cleworth said. “And then we show that we’ve been prudent, that we’ve saved some money, we’ve actually made some hard choices. Then we take it to them.”
The ordinance putting the tax hike question to voters was approved four to two, with Cleworth and council member David Pruhs voting no. The municipal election is October 3rd.