April 11 - 17, 1996 / Volume V, No. 15

The potential for an Anchorage tax has been growing steadily in a time of budget angst, below-the-tax cap spending (i.e. opportunity to use additional funds), and increasing pressure to relieve property taxes.

Over 9,000 signatures accompanied the petition submitted by sponsor and Northwest Strategies consultant Kevin Bruce, who says he is working in partnership with Perry Green to pass the initiative. The clerk declared only 6,290 valid, and 6,911 valid signatures were needed. Bruce filed more signatures the same day, which the clerk refused to accept. Bruce filed for an injunction against the city removing the initiative from the ballot on the grounds that the clerk's signature requirements were too stringent, and the initiative was constitutional. "Using the judge's criteria, we gained 600 signatures," says Bruce, "We turned in enough based on the judge's criteria, but he said he'd like to take a close look at the constitutional question.

The proposal was conceived as an additional impediment to implementation of a sales tax. The potential for an Anchorage tax has been growing steadily in a time of budget angst, below-the-tax cap spending (i.e. opportunity to use additional funds), and increasing pressure to relieve property taxes.

The sales tax is an exciting and controversial issue in Anchorage. Supporters of the initiative believe sales taxes are regressive (affecting the poor disproportionately) and unnecessary.

"The system works much better at the state level - they preapprove the language so there aren't any legal hassles like this; and they give you another window if there aren't enough signatures..."

Others see the potential for a sales tax to generate significant revenues or offset existing funding sources, like property taxes. Many Assembly members and candidates believe that some form of sales tax may be useful if regressivity is controlled, there is a clear need demonstrated, and perhaps some extra burden is placed on nonresidents. Furthermore, opponents of the initiative believe we shouldn't close off our options for the future - winning with a 60% supermajority is much tougher than a simple majority.

This is all largely academic for the time being, however - Anchorage will have at least another year to debate these issues. Due to the string of circumstances that landed the bill in the courts, two interesting legal decisions resulting from the petition could improve the petition process in Anchorage.

The first ruling, governing the gathering of signatures, has already been handed down. Superior Court Judge Rene Gonzalez applied the guidelines set forth by Superior Court Judge Karl Johnstone in his Memorandum Decision and Order dated September 15, 1983, in Greater Anchorage Chamber of Commerce, Inc. et. al. v. Municipality of Anchorage, et. al., which allows the inclusion of people who have moved or used shortened versions of their names, provided they can be proven to be the same person who signed the petition. This, combined with an order establishing the validity of the signatures filed later, gave the initiative enough signatures to go forward.

The clerk's requirements prevented the use of shortened first names and recent changes of address, regardless of whether they could be verified or not. The courts felt this was unconstitutional, preventing legitimate voters from being counted even though their legitimacy could be easily proven. Future petitions will hopefully be interpreted by the clerk through the Johnstone guidelines, giving legitimate voters a chance to express themselves even if they don't remember exactly how they signed their voter registration card.

Due to the string of circumstances that landed the bill in the courts, two interesting legal decisions resulting from the petition could improve the petition process in Anchorage.

The ruling gave the petition enough signatures to go forward, but by the time this was all worked out, it was too late to get the petition on this year's ballot. Furthermore, the Court needs time to review the constitutionality of the 60% provision. The clear problem is found in Article X, Subsection 9 of the Alaska Constitution, which says, "All charters, or parts or amendments of charters, shall be submitted to the qualified voters of the borough or city, and shall become effective if approved by a majority of those who vote on the specific question." Problem is, if a majority approve this initiative, 60% will be required to amend it or to institute a sales tax.

Does the 'majority rule' apply if the voters agree to change it for specific circumstances? Given recent Anchorage history, it would seem so. A provision requiring a 3/5 vote to sell the public telephone utility has proven a successful barrier to the sale of ATU.

If this provision is unconstitutional, says Bruce, how were the voters able to approve a 3/5 requirement before ATU could be sold? "The city claims [the supermajority requirement] is unconstitutional, but if it is, so is the ATU thing," says Bruce, "They can't have it both ways."

Regardless of how it turns out, we're likely to see this initiative on next year's ballot, though perhaps side-by-side with a competing sales tax initiative. If the court strikes any language, the 60% requirement preventing amendments to the initiative is more likely to get the ax than the 60% requirement for approval of a sales tax. Since the court has declared enough signatures valid, even is offending language is stricken, the constitutional portions of the initiative can be presented to voters without another signature-gathering process.

The process of getting this petition on the ballot demonstrates a need for streamlining our local petition process, says Bruce, "The system works much better at the state level - they preapprove the language so there aren't any legal hassles like this; and they give you another window if there aren't enough signatures. The city says, 'After you do all the work, we'll decide if the language is good. And if there aren't enough signatures, go back and do it all over again.'"