SB 77 Undermines Principle of Property Right Protection
Ours is a nation where property ownership is sought out as part of the American dream. Under communism, socialism, under the oppression of a dictator, that possibility is squelched. The fundamental right we have in Alaska to own property is one to be cherished and protected. Owning property is a game-changer for people. Putting property owners at risk of eventually losing their property is the opposite of what we should be doing.
Although the intention of SB 77 regarding establishing the ability for a local government to impose a tax on blighted properties may be to solve the problem of derelict or dilapidated buildings or residences, the stick approach rather than the carrot approach puts property owners at risk.
It is especially a risk when there is no floor or guardrails as to the definition of blighted property. Although most states have not passed a law such as SB77, of those that have, a couple have had attempts by municipalities to misuse the law and abuse homeowners within their state borders. In Michigan, it involved gaudy Halloween decorations locals didn’t like. In Ohio, it involved homes designated as blighted that weren’t big enough or high-class enough – although they were decent homes – in an attempt to make way for a wealthy developer’s project.
When SB 77 came to the floor, I offered an amendment to set a baseline for a definition that to be considered blighted, the condition of the property would have to endanger public health or safety. The amendment unfortunately failed with only two of the majority members (Senators Kaufman and Wilson) willing to join the minority in a sensible improvement to protect property owners.
Two other amendments I offered passed unanimously. They helped a bad bill be not quite so bad. One lifted the blighted tax once remedial and repair work on the property was underway. This would obviously free up funds for the owner to put into property renovations. The second amendment ensured a primary residence would not be designated as blighted while the owner was living in it. This would help keep the value of the home from declining any further and give the owner or the next buyer an opportunity to take care of needed repairs absent of a penalty tax. When a primary residence is in bad condition, it is often because the owner is strapped financially. Penalizing them further risks putting them in worse shape, increasing the chance of them eventually losing their property and needing government assistance.
SB 77 has a good “carrot” section – allowing a municipality to give a tax break or abatement as an incentive for economic development and improvements – but with the stick section, especially allowing a 50% tax of the normal property tax added to a person’s property tax bill – I could not support the bill.
The bill, however, ultimately passed the Senate but along with Senate Minority members joining me in opposition to the bill were three Majority members: Senators Bjorkman, Stedman, and Wilson. The bill has been transmitted to the House. You are welcome to let the House members know what you think about SB 77 and its companion HB 84. You can find the email addresses for House members here.
One more note in closing, it is interested to note that a national watchdog, Americans for Tax Reform (ATR), took the time to weigh in to oppose this bill, The organization works to protect Americans from egregious, high, hidden and complicated taxes. It considers the government’s power to control one’s life as being derived from its power to tax and that this power should be minimized. I happen to agree with this. (Your trivia for the day? ATR was founded in 1985 by Grover Norquist at the request of President Reagan.)
