It’s the time of year when property owners in Anchorage are receiving their tax bills. And this June, those bills were accompanied by a letter — delivered to roughly 92,000 mailboxes — telling residents they would have paid less had members of the Anchorage Assembly acquiesced to Mayor Dave Bronson’s budget proposals.
Assembly members on Friday issued a statement pushing back, calling information in the letter inaccurate and partisan.
The letter, signed by Bronson, said that under the mayor’s initial plan the budget would be been $4.6 million smaller than the proceeding year, achieved through new operational efficiencies and departmental cuts, saving the owner of an average-priced home $560 on their tax bill.
“Unfortunately, the Assembly chose a different path and passed a budget that increases both spending and property taxes. I vetoed many of the Assembly’s increases, but they overrode my vetoes. The Assembly chose to grow government and increase spending by millions of dollars,” Bronson wrote.
The letter encourages residents to contact Assembly members “regarding their decision to to increase the budget and taxes in this time of economic uncertainty.”
According to the Assembly’s legislative liaison, the letter has prompted an influx of emails and messages to lawmakers.
“The mayor’s letter to taxpayers contains inaccurate and misleading information that demonstrates at best a poor misunderstanding of public finances or, at worst, a deliberate strategy to deceive the public for political gain,” said leaders of the Assembly’s Budget Committee in the statement.
“The biggest factors impacting property taxes this year were school bond debt reimbursement from the state and the increase in property values,” said Forrest Dunbar, one of two co-chairs of the committee.
Beginning in 2015, state lawmakers stopped reimbursing school districts around Alaska for debt they took on for school improvements, shifting the repayment burden to local governments. In Anchorage, that meant property owners picking up a bill for tens of millions of dollars a year the state had earlier committed to passing along, incensing local officials trying to balance budgets. This year, lawmakers approved money to reimburse bonded school debt, in a bill that Gov. Mike Dunleavy signed.
Property values increased in 2022 in Anchorage by 8% to 10% in most neighborhoods, part of a national trend of rising real estate prices driven by short supply, cheap borrowing costs and pandemic trends. The average price for a single family home in 2020 was $394,000. In 2021, that average rose to $421,000. With the rise in home values, the average mill rate — the rate applied to a home’s assessed value that’s used to calculate a person’s property tax — declined proportionately to keep the municipal budget in line with the tax cap. The arithmetic in the mayor’s letter assumes home prices stayed flat from one year to the other, in spite of the jump.
Bronson “incorrectly implies that taxes have risen significantly this year, when, for most homeowners, taxes have stayed relatively flat,” the budget committee said.
“The big area in my mind where that letter got it wrong is in how the mill rates were discussed and the reasons for the decrease,” said Jason Bockenstedt, who served as chief of staff under former mayor Ethan Berkowitz and former acting mayor Austin Quinn-Davidson. “The reason for the decrease in the mill rate this year are two things: school bond debt reimbursement was paid, and for the second year in a row we saw increases in the value of people’s properties.”
In recent years, other Anchorage mayors have sent mail to residents alerting them to legislative policies affecting their tax bills and city finances. Those letters were milder and blamed state lawmakers, not a coequal branch of government. The Berkowitz and Quinn-Davidson administrations both sent short notes telling homeowners that a portion of the increase in their tax bills were a result of the state of Alaska failing to fulfill its preexisting obligations to pay school bond debt reimbursements. But there was no call to action against local governing partners.
Dunbar said about three-quarters of the messages from residents were supportive of the Assembly, with the remaining quarter critical of their spending actions, a proportion similar to the one reported by the Assembly legislative liaison.
Some of the feedback received by officials has questioned the legality of the mayor’s office using public funds to send out a letter on official letterhead criticizing political opponents, and asking whether it violates a section of city code barring the use of “municipal resources for political or partisan activity.”
“There is nothing partisan in keeping property owners informed of decisions of why their tax bill has changed,” said Bronson spokesman Corey Allen Young. “It has been historical practice for Mayors to include an insert with the tax bills, this is not new or unique to this Administration. The letter was sent out to inform property owners about the tax bill based on decisions made by the Anchorage Assembly.”
Young rejected that the letter was misrepresentative.
“The Mayor’s numbers are accurate and true,” he said, adding that he believes Dunbar should “focus less on screaming through the media and focus more on helping his constituents and all of Anchorage by being a good steward of public tax dollars.”
According to figures provided by the mayor’s office, the cost of the letters was approximately $12,000, the same amount spent on similar tax mailers in the past.