PALMER — With the only comment a ringing endorsement from a local health charity, the Mat-Su Borough Assembly Tuesday voted to let residents decide whether to tax alcohol.
Borrowed almost entirely from the Fairbanks North Star Borough statute, the tax would be spent, according the proposal, on education and emergency services. The question will be on the Oct. 1 ballot.
“Increases in alcoholic beverage taxes do result in decreases in alcohol consumption,” said Elizabeth Ripley, executive director of the Mat-Su Health Foundation in endorsing the tax. “It’s also an effective strategy for improving the health of borough residents.”
The tax would set the levy at 5 percent, which, by a quirk of state law, explained Borough Attorney Nick Spiropoulos at Tuesday’s meeting, is actually the most the borough could tax. Alaska courts have held that a borough can’t tax alcohol if it doesn’t tax anything else and if it taxes something else, the alcohol tax can’t be any higher than the pre-existing tax. In this case, the borough already levies a tax on hotel rooms — the so-called bed tax — at 5 percent.
Assemblyman Steve Colligan, whoproposing the tax, said it is a way to diversify the borough’s taxation portfolio.
“I believe that a consumption tax is the most fair tax that there is — you pay for what you use,” Colligan said. “I wish we had more of that to avoid taxing people out of their house and home.”
In his regular podcast, Mat-Su Borough Mayor Larry DeVilbiss said he thought it was appropriate to spread the cost of emergency response to consumers of alcohol who are often the ones creating the need for it. He also pointed to statistics Ripley provided.
He said the past two times the state has increased alcohol tax, there was a 29 percent and 11 percent decrease in alcohol-related deaths.
Ripley said the tax also most heavily impacts the same group of people whose alcohol consumption tends to burden health care systems — heavy drinkers.
“The tax burden would be directly proportional to the amount of alcohol consumed,” she said.
Assemblyman Ron Arvin solicited information about how the tax would work and was told the tax would be levied on retail sales, not wholesale. So a liquor store selling a case of whiskey to a restaurant wouldn’t encounter the tax, but that restaurant selling a whiskey sour would.
Assemblyman Jim Colver wanted to know how many borough staff members it would take to administer the tax.
“I don’t believe that we have calculated that, but on the books we are looking for an internal auditor and that is something that we may be able to use that position for,” borough manager John Moosey said. “We can report back on what the revenues are and what the added expenses may be to us but we have not done that yet.”
In the end, Colver’s was the lone vote against putting the tax on the ballot.
In explaining the reasoning behind his vote, Darcie Salmon said he wasn’t voting in favor of the tax.
“If I’m correct, this is merely a vote to allow the people to decide,” he said.
Colligan said he is looking forward to the debate that is sure to ensue between now and the election.
“I look forward to an engaging discussion with even some of my closest friends over the next several months,” he said.
Contact Andrew Wellner at 352-2270 or email@example.com.