Proposition A - City Charter Amendment

INFORMATION: City voters amended the City Charter in 1989, adopting a Tax Cap. Under the Tax Cap, the total amount of property and sales taxes the City can levy cannot exceed the prior year's amount by more than the prior year's rate of inflation, new construction, and the limitations contained in Charter Section 6.5B. However, in 2007, City voters approved an amendment to the Charter which limited the property tax mill rate to a maximum of 4.9 mills, before any authorized exemptions, the so-called "cap within the cap." This 4.9 mill base rate has greatly hindered the City's ability to keep up with inflation over the past 14 years. Proposition A seeks to remove the base rate language and return to the original Tax Cap as enacted by City voters in 1989. The effect of the passage of Proposition A would result in minor changes in the mill rate, either up or down, depending on the tax cap computation formula in the City Charter, which takes into consideration the consumer price index, property assessments, and sales tax revenues, Should the Fairbanks City Charter, Section 6.5A, be amended to read as follows? \[text to be deleted shown in ~~strikethrough~~ font\] A. Except as provided in this section, the total amount of municipal tax that can be levied during a fiscal year shall not exceed the total amount approved by the city council for the preceding year by more than a percentage determined by adding the percentage increase in the Federal Consumer Price index for Anchorage from the preceding fiscal year. ~~Of the total amount of taxes that can be collected, property taxes are limited by a maximum mill levy of 4-9 mill subject to Charter Section 6.5(B).~~ Any new or additional sales tax levied, other than hotel/motel, alcohol, and tobacco, must be approved by voters in a general election.