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Our city is very fortunate in many ways. Unlike other cities, we have little debt, and it will disappear in a few years. We finished our last fiscal year with a $1 million surplus, and we have $4 million in our unrestricted general fund balance. Even though our population has not grown in 20 years, we have added 36 employees since the deep cuts made in 1990, a growth of 24 percent. We are no longer below the national average in police and fire staffing.

All of this has been achieved while operating under the tax cap mandated by voters and placed in our charter. Our annexation petition even states that we can take on new responsibilities without adding more staff.

We have a healthy mix of taxes and fees. Our annual budget is $33 million, with sales taxes contributing 13 percent, property taxes 37 percent, and the balance coming from fees, grants and permanent fund earnings. Most of our property tax is generated from commercial properties.

Propositions 1 and 2 combine to eliminate the tax cap, create a 3 percent sales tax on city goods and services, grow the city’s budget by 25 percent, create a new bureaucracy costing $650,000 to audit and collect the tax, and eliminate the commercial property taxes we have worked so hard to develop. Even revenue from the new military housing project, up to $180 million of taxable property, could be lost.

The sales tax brings with it a host of problems. First, it only applies to city businesses, putting them at a competitive disadvantage to borough businesses and the military base exchanges. This literally creates situations where one business collects the tax while another across the street does not, such as Safeway and Fred Meyer on Airport Way. Already 25 percent of all business takes place outside the city limits; this will guarantee that more business is lost.

Second, it shifts the commercial tax burden onto consumers. This hurts renters and low-income and fixed-income families the most. Residential owners are being given a carrot of a 4.9 mill rate reduction, but this is only a 29 percent property tax reduction out of 17.113 mills we pay (including the borough’s property tax). It is not worth throwing away our tax cap and creating yet another sales tax. A better way to provide homeowner tax relief is to raise the residential exemption, an effort the borough is leading. We can accomplish this without destroying our commercial tax base.

Last winter, the City Council met to explore revenue options and ideas. Many do not have the high overhead costs and collection problems inherent in a general sales tax. Unfortunately, the meetings halted when yet another vote on the sales tax was sought.

I firmly believe that changing our successful tax mix to a sole-source sales tax is the wrong move to make. The regressivity, loss of business, risk of economic downturn and high collection costs make this the least attractive revenue option. Yes, we have infrastructure needs and problems with both expenses and revenues, but they should be tackled one step at a time after thorough deliberation. Throwing money at a problem has never worked in the long run. Please, vote “no” on Propositions 1 and 2. They take a major step backward.

Jerry Cleworth is a longtime Fairbanks City Council member and downtown business owner.