Letters to the Editor Published August 20, 2007

Buses, land and roads    To the editor:

It took me 20 years to restart full-time public transit, but finally, Fairbanks, Alaska, can join the world’s modern cities. I testified at the Fairbanks North Star Borough, raised the issue in my yearly campaigns for political office, I speak at church on how the poor need a full-time bus just to exist, I pamphlet and write letters.

It is my passion to spend a paltry additional $40,000 more for a full-time bus compared with the $1.2 million for a crappy part-time bus.

Such a small cost to double the bus service for all in our community. Evening bus service will have a huge impact as the arriving university students realize they don’t have to buy a car for evening classes or to go out into the community to spend the equivalent thousands of dollars. What a blessing it will be for workers to be able to shop for groceries after work.

Public transit until 10 p.m. instead of 7 p.m. will mean, for the first time in a generation, that all the citizens of Fairbanks will be able to participate in local government functions like testifying on the need for cost-effective, traffic-reducing, blessed, full-time bus service.

Next we need to talk about the hundreds of millions of dollars of your hard earned money being spent for roads for land speculators (and no money for pot holes).

Finally, the talk is about land for the people. Why, in the biggest richest state, new families cannot get land, except for buying it for thousands of dollars from someone who stole our bus money and put it into new roads to land they were selling (sprawl and bridges to nowhere)?

Dae Miles

Pair of bills would boost tax exemption Published March 21, 2007

JUNEAU — Two Fairbanks lawmakers have put forward bills that would allow municipalities to increase the residential property tax exemption from $20,000 per residence to $100,000.

Rep. Scott Kawasaki and Sen. Joe Thomas, both Democrats from Fairbanks, introduced the bills in the House and Senate last week. Rep. David Guttenberg, D-Fairbanks, is a co-sponsor of the House bill.

“Property taxes are rising at a pretty unbearable rate,” said Kawasaki, who served six years on the Fairbanks City Council before being elected to the Legislature this year.

The bill would enable municipalities to shift the burden on taxpayers. If a city or borough chose to raise its mill rate and offer a higher property tax exemption, businesses would be forced to pick up a greater share of the tax burden relative to homeowners, Kawasaki said. The bill would not force a municipality to increase its exemption but would allow it. Any increase in a local property tax exemption would also require approval by voters in that municipality.

“It’s a local issue,” Kawasaki said Tuesday. “We’re just trying to help it along.”

Thomas said Monday he thought the higher exemption could have helped Fairbanks stay out of the budget pinch it’s in now by allowing the city to provide some relief to homeowners. He added that he thought it could be a tool for the city in crafting a long-term solution.

Rep. John Coghill, a Republican from North Pole, said he liked the idea of local control but would want to study how the higher exemption could affect other taxpayers and the state.

In February, the Fairbanks North Star Borough Assembly passed a resolution calling on the Legislature to increase the exemption to $50,000, citing increased assessed valuations and tax bills, as well as higher heating fuel and gasoline prices.

The Fairbanks City Council asked the Legislature to increase the allowable exemption to $100,000.

The bills are House Bill 199 and Senate Bill 122.

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Do you support a return to Land Grant school funding? ( Federal 1862 Morrill Act )
http://alaskaconstitution.com/morrill/

Under the Morrill Act, the Homestead Act of 1862, Congress set aside Sections 16 and 36 of every township of federal land granted to states and territories. This was to provide income (rents, leases, salesóat market value) with the money going into a trust to provide school funding. In territorial days the Legislature set up a "Permanent School Fund" with the income from those sales and property leases. The same was done for the university and for the Mental Health Trust (one section out of every township). These were congressionally mandated funds.

Much of these landsóespecially in Anchorageówere leased by entrepreneurs at far below market value and subleased to stores, hospitals (Alaska Regional, formerly the Teamsterís Hospital) and all sorts of ventures. After statehood, agencies such as DOT took over the land without paying, arguing that it belonged to the state, so why pay. The Anchorage situation resulted in a lawsuit wherein the decisionówritten by former Chief Justice Jay Rabinowitzódecided that the property leased or sold must be paid for at full market value and that the money must go for public education as directed by Congress.

The Anchorage establishment blew its cork and started a campaign to "put the property on the tax rolls." In 1977 and í78 the Legislature, pushed by Representative Ralph Meekins, Jr., (who in the 1981 session took over the Speakerís chair, thus sparking the "coup" which led to a Republican-led Legislature for more than a decade), reclassified the School, University, and Mental Health Trust lands as general state public lands. It also allowed municipalities to take ownership of 10% of state public lands within municipal boundaries.

Anchorage did so (as did other municipalities) and passed an ordinance "selling" the parcels to the original lessor (not the sublessor who may have built the structure on it!) for the equivalent of two years under the market value rent! The properties were not offered at auction or to any other purchasers! The property did go on the Anchorage tax rolls, but the property taxes were not set aside for school, university, or mental health purposes, but were used for whatever purpose the borough assembly wantedósuch as the Convention Center, etc.

The result in other communities was that state agencies such as DOT, Corrections, and Health and Social Services appropriated the lands, often before the municipalities acted to appropriate their full share. When municipalities did so, they often took the lands for establishing or expanding needed municipal functions, although outlying areas often were made available to private development.

The loss of income from the Mental Health Trust lands led to immediate lawsuits against the state. The University of Alaska first sued to reclaim the lands that the state had specifically transferred from the federally mandated University Land Trust. On February 27, 1981 the Alaska Supreme Court found in favor of the university. Later the university sued for compensation or lands of equal value for other trust lands taken by the stateóincluding university lands given to municipalities. The university also won this suit.

The Mental Health lawsuit was also won and led to considerable political conflict in the Legislature over which agency should be compensated. The Mental Health Trust was established and eventually given lands and funds to create a mental health system statewide. However, since the original congressional actóthe Alaska Mental Health Enabling Act, passed in 1956ógranted one million acres to be held in public trust to help create and operate mental health facilities throughout Alaska, it was felt that this implied regionalization, rather than centralized operation. This led to controversy among the supporters of the Mental Health Trust. The State of Alaska lost both that lawsuit and a less onerous one by the university system. Several school districts considered suing, but, afraid of political repercussions, decided against it.

The initial legislation creating the territory of Alaska did not include any provision for public education; Congress apparently assumed that the U.S. Office of Education would provide what was needed. Large, stable mining and fishing communities, having taxing powers, took it upon themselves to open schools for children of local families. In the next decade, Judge Wickersham, as Alaskaís delegate to Congress, got Congress to amend the Territorial Act to give the responsibility to the Alaska Legislature to oversee the creation and support of public schools; further, Wickersham got federal lands surveyed in settled parts of Alaska and extended the Morrill Act provisions for the funding of public schools from sections 16 and 36 in such surveyed areas as the Tanana Valley (surveyed 1910-1916) and throughout the "Railbelt" slightly later.

Following World War II the influx of population into the Territory created a stressful boom in school attendance. Dr. James Ryan, former head of the teacher education department at the University of Alaska, who had been appointed Commissioner of Education by Governor Ernest Gruening, created the Permanent School Fund with the income from the Morrill Act School Lands. He further lobbied Congress, which created a two-cent-per-package cigarette tax, which went to the Permanent School Fund.

The School Fund still exists, but is far from adequate and local property taxes support a large share of school costs. In territorial days, the territory (and tobacco taxes) paid the largest portion of school costs. Local "Independent School Districts" could tax themselves and did so to improve school quality and for locally needed programs. The state constitution (and federal court decisions in other states) places the responsibility for public education directly on the state. In fact, Alaskaís constitution fixes the responsibility on the Legislatureówith restrictions, stating: "The Legislature shall by general law establish and maintain a system of public schools open to all children of the state, and may provide for other public educational institutions. Schools and institutions so established shall be free from sectarian control. No money shall be paid from public funds for the direct benefit of any religious or other private educational institution." (Article VII, Section 1). We should consider fully funding the school fund by reconstituting the public school land trust as has been done for the Mental Health Trust and/or giving the public school fundóas a trustóincome equal to the income from two sections of every township (including oil, mineral, gravel, and timber lands) of state landsóincluding reimbursement for the funds lost since the legislative action in 1978 before some parents, property owners, or interested folks file a lawsuit that will make the Mental Health suit look like a nickel and dime affair. This would largely alleviate the burden on municipal property taxpayers and help solve the problem of funding schools in unorganized areas (those without municipal or borough infrastructure). In a case in the Lower 48 the U.S. Supreme Court ruled that the state could delegate, but not abrogate its responsibilities for public education. Alaskaís own constitution is even more specific, fixing the responsibility squarely on the Legislature.

The proposal currently mooted by the Administration, to use the Permanent Fund to supplement the School Fund, is yet another raid similar to the Legislatureís 1975 theft of Mental Health Lands. Historically, Congress intended that the income be provided from land income: be it agricultural, commercial, industrial, or mineralóincluding oil. The University of Texas endowment, probably the largest of any public university, is based on the profits of the oil lands that U.T. owns and leases out. Why didnít we do that with Prudhoe Bay for the public schools of Alaska, urban, rural, or suburban? Local taxes will never be sufficient. Children are not born only in wealthy communities (and even in those communities, adults often find other things they want to spend public monies on!). Read Article VII Section One of the Alaska State Constitution again. It is part of the constitutional job description of members of the Alaska Legislature.

             We propose to abolish all taxes save one single tax levied on the value of land, irrespective of the value
             of the improvements in or on it. 

             What we propose is not a tax on real estate, for real estate includes improvements. Nor is it a tax on
             land, for we would not tax all land, but only land having a value irrespective of its improvements, and
             would tax that in proportion to that value. 

             Our plan involves the imposition of no new tax, since we already tax land values in taxing real estate.
             To carry it out we have only to abolish all taxes save the tax on real estate, and abolish all of that
             which now falls on buildings or improvements, leaving only that part of it which now falls on the
             value of the bare land, increasing that so as to take as nearly as may be the whole of economic rent, or
             what is sometimes styled the "unearned increment of land values." 

             That the value of the land alone would suffice to provide all needed public revenues--municipal,
             county, State, and national-- there is no doubt. 

             To show briefly why we urge this change, let me treat (1) of its expediency, and (2) of its justice.

             From the Single Tax we may expect these advantages:

                   1. It would dispense with a whole army of tax gatherers and other officials which
                   present taxes require, and place in the treasury a much larger portion of what is taken
                   from people, while by making government simpler and cheaper, it would tend to make
                   it purer. It would get rid of taxes which necessarily promote fraud, perjury, bribery,
                   and corruption, which lead men into temptation, and which tax what the nation can
                   least afford to spare -- honesty and conscience. Since land lies out-of-doors and cannot
                   be removed, and its value is the most readily ascertained of all values, the tax to which
                   we would resort can be collected with the minimum of cost and the least strain on
                   public morals.

                   2. It would enormously increase the production of wealth -- 

                   (a) By the removal of the burdens that now weigh upon industry and thrift. If we tax
                   houses, there will be fewer and poorer houses; if we tax machinery, there will be less
                   machinery; if we tax trade, there will be less trade; if we tax capital, there will be less
                   capital; if we tax savings, there will be less savings. All the taxes therefore that we
                   would abolish are those that repress industry and lessen wealth. But if we tax land
                   values, there will be no less land.

                   (b) On the contrary, the taxation of land values has the effect of making land more
                   easily available by industry, since it makes it more difficult for owners of valuable
                   land which they themselves do not care to use to hold it idle for a large future price.
                   While the abolition of taxes on labor and the products of labor would free the active
                   element of production, the taking of land values by taxation would free the passive
                   element by destroying speculative land values and preventing the holding out of use of
                   land needed for use. If any one will but look around today and see the unused or but
                   half-used land, the idle labor, the unemployed or poorly employed capital, he will get
                   some idea of how enormous would be the production of wealth were all the forces of
                   production free to engage.

                   (c) The taxation of the processes and products of labor on one hand, and the
                   insufficient taxation of land values on the other, pro- duce an unjust distribution of
                   wealth which is building up in the hands of a few, fortunes more monstrous than the
                   world has ever before seen, while the masses of our people are steadily becoming
                   relatively poorer. These taxes necessarily fall on the poor more heavily than on the rich;
                   by increasing prices, they necessitate a larger capital in all businesses, and
                   consequently give an ad- vantage to large capitals; and they give, and in some cases are
                   designed to give, special advantage and monopolies to combinations and trusts. On the
                   other hand, the insufficient taxation of land values enables men to make large fortunes
                   by land speculation and the increase of ground values -- fortunes which do not
                   represent any addition by them to the general wealth of the community, but merely the
                   appropriation by some of what the labor of others creates.

                   This unjust distribution of wealth develops on the one hand a class idle and wasteful
                   because they are too rich, and on the other hand a class idle and wasteful because they
                   are too poor. It deprives men of capital and opportunities which would make them
                   more efficient producers. It thus greatly diminishes production.

                   (d) The unjust distribution which is giving us the hundred-fold millionaire on the one
                   side and the tramp and pauper on the other, generates thieves, gamblers, and social
                   parasites of all kinds, and requires large expenditure of money and energy in
                   watchmen, policemen, courts, prisons, and other means of defense and repression. It
                   kindles a greed of gain and a worship of wealth, and produces a bitter struggle for
                   existence which fosters drunkenness, increases insanity, and causes men whose energies
                   ought to be devoted to honest production to spend their time and strength in cheating
                   and grabbing from each other. Besides the moral loss, all this involves an enormous
                   economic loss which the Single Tax would save.

                   (e) The taxes we would abolish fall most heavily on the poorer agricultural districts,
                   and tend to drive population and wealth from them to the great cities. The tax we
                   would increase would destroy that monopoly of land which is the great cause of that
                   distribution of population which is crowding the people too closely together in some
                   places and scattering them too far apart in other places. Families live on top of one
                   another in cities because of the enormous speculative prices at which vacant lots are
                   held. In the country they are scattered too far apart for social intercourse and
                   convenience, because, instead of each taking what land he can use, every one who can
                   grabs all he can get, in the hope of profiting by its increase in value, and the next man
                   must pass farther on. Thus we have scores of families living under a single roof, and
                   other families living in dugouts on the prairies afar from neighbors -- some living too
                   close to each other for moral, mental, or physical health, and others too far separated
                   for the stimulating and refining influences of society. The wastes in health, in mental
                   vigor, and in unnecessary transportation result in great economic losses which the
                   Single Tax would save.

             Let us turn to the moral side and consider the question of justice.

             The right of property does not rest upon human laws; they have often ignored and violated it. It rests
             on natural laws -- that is to say, the law of God. It is clear and absolute, and every violation of it,
             whether committed by a man or a nation, is a violation of the command, "Thou shalt not steal." The
             man who catches a fish, grows an apple, raises a calf, builds a house, makes a coat, paints a picture,
             constructs a machine, has, as to any such thing, an exclusive right of ownership which carries with it
             the right to give, to sell or bequeath that thing.

             But who made the earth that any man can claim such ownership of it, or any part of it, or the right to
             give, sell or bequeath it? Since the earth was not made by us, but is only a temporary dwelling place
             on which one generation of men follow another; since we find ourselves here, are manifestly here with
             equal permission of the Creator, it is manifest that no one can have any exclusive right of ownership in
             land, and that the rights of all men to land must be equal and inalienable. There must be exclusive
             right of possession of land, for the man who uses it must have secure possession of land in order to
             reap the products of his labor. But his right of possession must be limited by the equal right of all,
             and should therefore be conditioned upon the payment to the community by the possessor of an
             equivalent for any special valuable privilege thus accorded him. 

             When we tax houses, crops, money, furniture, capital or wealth in any of its forms, we take from
             individuals what rightfully belongs to them. We violate the right of property, and in the name of the
             State commit robbery. But when we tax ground values, we take from individuals what does not belong
             to them, but belongs to the community, and which cannot be left to individuals without robbery of
             other individuals.

             Think about what the value of land is. It has no reference to the cost of production, as has the value of
             houses, horses, ships, clothes, or other things produced by labor, for land is not produced by man, it
             was created by God. The value of land does not come from the exertion of labor on land, for the value
             thus produced is a value of improvement. That value attaches to any piece of land means that that
             piece of land is more desirable than the land which other citizens may obtain, and that they are
             willing to pay a premium for permission to use it. Justice therefore requires that this premium of
             value shall be taken for the benefit of all in order to secure to all their equal rights.

             Consider the difference between the value of a building and the value of land. The value of a building,
             like the value of goods, or of anything properly styled wealth, is produced by individual exertion, and
             therefore properly belongs to the individual; but the value of land only arises with the growth and
             improvement of the community, and therefore properly belongs to the community. It is not because of
             what its owners have done, but because of the presence of the whole great population, that land in New
             York is worth millions an acre. This value therefore is the proper fund for defraying the common
             expenses of the whole population; and it must be taken for public use, under penalty of generating
             land speculation and monopoly which will bring about artificial scarcity where the Creator has
             provided in abundance for all whom His providence has called into existence. It is thus a violation of
             justice to tax labor, or the things produced by labor, and it is also a violation of justice not to tax land
             values.

             These are the fundamental reasons for which we urge the Single Tax, believing it to be the greatest and
             most fundamental of all reforms. We do not think it will change human nature. That, man can never
             do; but it will bring about conditions in which human nature can develop what is best, instead of, as
             now in so many cases, what is worst. It will permit such an enormous production as we can now
             hardly conceive. It will secure an equitable distribution. It will solve the labor problem and dispel the
             darkening clouds which are now gathering over the horizon of our civilization. It will make
             undeserved poverty an unknown thing. It will check the soul-destroying greed of gain. It will enable
             men to be at least as honest, as true, as considerate, and as high-minded as they would like to be. It
             will remove temptation to lying, false, swearing, bribery, and law breaking. It will open to all, even the
             poorest, the comforts and refinements and opportunities of an advancing civilization. It will thus, so
             we reverently believe, clear the way for the coming of that kingdom of right and justice, and
             consequently of abundance and peace and happiness, for which the Master told His disciples to pray
             and work. It is not that it is a promising invention or cunning device that we look for the Single Tax to
             do all this; but it is be- cause it involves a conforming of the most important and fundamental
             adjustments of society to the supreme law of justice, because it involves the basing of the most
             important of our laws on the principle that we should do to others as we would be done by.

             The readers of this article, I may fairly presume, believe, as I believe, that there is a world for us
             beyond this. The limit of space has prevented me from putting before them more than some hints for
             thought. Let me in conclusion present two more:

                   1. What would be the result in heaven itself if those who get there first instituted
                   private property in the surface of heaven, and parceled it out in absolute ownership
                   among themselves, as we parcel out the surface of the earth?