July 26, 2012 | Volume 42, No.30

Editorial

In recent years, as the word “taxes” became lethal to political careers, savvy politicians turned to user fees to raise revenues. They hiked fees for items like car registration and university classes, all the while claiming they weren’t “raising taxes.”

It was a clever dodge that helped win elections. In an interesting way, Haines Borough Assembly members have flipped this equation around.

The costs of harbor trash removal and water and sewer service have risen, but instead of raising the fees that pay for those services, the assembly has held off, effectively transferring those costs to savings accounts generated by the public at large.

It works because the borough has cushion enough in general accounts to cover increased costs, so taxes don’t go up, either.

The problem with this arrangement is taxpayers who don’t use services like harbors or sewer systems are subsidizing the operational costs of a service provided through user fees. Ports and harbors and water and sewer services are managed under “enterprise funds” intended to pay for themselves.

Critics say such funds don’t pencil out in small towns like Haines because users are too small of a pool to raise all the money needed, and the larger community has to subsidize them.

That may be true. If it is, it’s incumbent on assembly members to determine what percentage of costs for services like water or sewer should be borne by users, and what should be paid by the rest of the community. Then etch those numbers into stone.

Otherwise, leaders are on a slippery slope, subsidizing services that directly benefit a sub-set of residents, while shifting their cost to others who receive only a tangential benefit. The math of enterprise funds might need tweaking, but the logic behind them is sound.

-- Tom Morphet