The proposed 2017 Anchorage municipal budget from Mayor Berkowitz exceeds the amount allowed under the Spending Increase Limitation (commonly known as the “Spending Cap”). This has caused the introduction of a new ordinance (2016 AO-130) to the Anchorage Assembly to repeal the 33 year-old Spending Cap. The Municipal Spending Cap is the lesser known cousin to the Municipal Tax Cap and has been in municipal code since 1983. The Spending Cap is rarely used provision in budgeting for local government but is nonetheless, an important taxpayer protection that back-stops the many loopholes in the Tax Cap.
So just what are the justification from Mayor’s Office to repeal the Spending Cap? Here they are and they include several rationalizations that are fairly easy to see through:
- The Mayor contends that the Anchorage Assembly never intended to have a Tax Cap and Spending Cap in force at the same time and the Assembly has somehow forgotten to repeal the Spending Cap after the Tax Cap was adopted by a vote of the people in 1983. There is scant evidence that this is true. In fact, there is no known discussion in Assembly minutes over the last 33 years for repealing the Spending Cap.
- The Mayor also contends that it’s just too difficult and confusing for the Municipal Office of Management and Budget (OMB) to keep track of both the Spending Cap and the Tax Cap at the same time. In fact, the Spending Cap calculation is a fairly simple annual one-page worksheet very similar to a taxpayer filling out a 1040EZ tax return. It’s hard to imagine that could be an unreasonable burden for an organization that manages a budget in excess of a half a billion dollars per year.
- The Mayor also points to the fact that the other previous administrations and Assemblies have not fully complied with the Spending Cap. This is the same rationalization that we often hear from small children: Bad behavior by other people in the past is justification for my bad behavior now. The fact that other administrations have not been caught breaking a law, is not justification for eliminating that law.
- The strangest argument from the Berkowitz Administration to eliminate the Spending Cap is that our saving accounts could become excessively large. Now that’s a problem we could all live with. If limited by the Spending Cap and not the Tax Cap, the municipality could tax more than they can spend. In this case, the municipal fund balances (savings) would become unreasonably large. Apparently it never occurred to the Mayor that the alternative to building up unreasonably large savings accounts of taxpayer money is returning some of the money to the people it belongs to.
It may be time for minor modifications to the Spending Cap to align it more closely with the Tax Cap calculation and simplify the OMB calculations. That can easily be achieved but without repealing the Spending Cap law. The goal of the Spending Cap and the Tax Cap was to place limits on the growth of the cost of government. Without these important safeguards in place local government would tend to grow much faster than the wages of the people who are paying the bills.
Bottom line: We can wear both the Tax Cap and the Spending Cap at the same time. Mayor Berkowitz, stop trying to take more wealth from citizens to grow government. Call or email your Assembly person and tell them “hands off my wealth, leave the Spending Cap alone!”