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A new task force created by the Kenai Peninsula Borough Assembly will examine alternative methods of property tax assessment.

Despite a 1-mill cut in the boroughwide levy last year and a recommendation to cut it even further in the FY 2009 budget, property values are skyrocketing, and homeowners are demanding relief.

At its April 15 meeting, the assembly voted unanimously in favor of a resolution establishing a new task force to consider optional approaches to assessing real property and make recommendations to the Alaska Legislature.

"It is our conviction that some type of alleviation from the current statutory requirement to assess property at full and true market value is past due," assembly members Milli Martin, of Diamond Ridge, and Gary Superman, of Nikiski, wrote in a memo to their colleagues on April 14.

State law requires municipal assessors to use a specific standard called "full and true" market value. The borough uses sophisticated software into which goes data such as recent sale prices of homes and properties. Comparisons are made between similar properties, and values are assessed. A problem with that method, however, is that owners are not legally bound to report property sales to municipal assessing departments.

Furthermore, because the assessing staff is limited, actual on-site inspections of homes may only occur in a location every few years. Thus, in most years during the inspection cycle, assessment adjustments are not based on visual data. Meanwhile, growing demand has caused property values on the peninsula to escalate rapidly in recent years.

The "full and true" market value standard needs a revamp, Martin and Superman say.

"As many of you are aware," they told the assembly, "past and current efforts to afford some type of relief and assessment change have not taken hold in the Legislature."

Martin and Superman noted that the borough was in "a comparatively unique position" because of its healthy sales tax revenue stream, and said now was the time to make recommendations through the Alaska Municipal League that might get the attention of state lawmakers.

Absent legislative action soon, tax protest might take the form of citizen initiatives, the effects of which are hard to predict, Martin suggested. In an interview Wednesday, she said that California's famous and controversial Proposition 13, passed by voters in the 1978, changed the state's constitution and radically revamped property tax revenue streams in that state, with both negative and positive results.

The new borough task force, called the Equitable Assessment Methodology Task Force, will be charged with reviewing the current market-driven assessment system and its effects, and with reviewing options employed by other states.

The task force will include two assembly members, a member of Borough Mayor John Williams' staff, two members of the Assessing Department, and one member each from the Finance and Legal Departments, as well as four members of the general public, one each from the north, south, east and central regions of the peninsula.

Martin said she hopes Assembly President Grace Merkes will appoint her and Superman to the new panel.

The task force is scheduled to meet for the first time on May 7 at the borough building in Soldotna at 6 p.m. Borough Clerk Sherry Biggs is working to establish a teleconference line for Homer and Seward, she said.

Whatever solution is found to provide some relief for property owners must be applicable statewide, Martin said. It also has to be done in a way that won't cripple local governments as Prop 13 initially did in some parts of California.

The Alaska Legislature had considered a bill proposed allowing local municipalities to provide a property tax assessment exemption of up to $100,000 ? it's currently $20,000 ? but Senate Bill 122 died with the end of the 25th Legislature.

Hal Spence can be reached at hspence@ptialaska.net.