A borough alcohol sales tax and increased marijuana tax proposed before Mat-Su’s assembly meeting June 2

Mat-Su Borough assemblyman Ron Bernier is proposing new “sin” taxes, on marijuana and alcohol, to bring additional revenue to the borough reduce the pressure on property taxes to fund municipal services.

Bernier would raise the marijuana tax from 5 percent to 10 percent and also impose a new 10 percent sales tax on alcohol sold in the borough. The assembly approved putting the proposals up for public hearings at its May 19 meeting.

Hearings on both taxes will be held on June 2. If approved by the assembly the tax questions would go before voters in the Nov. 3 municipal election.

Bernier argues that property taxes in Mat-Su have increased dramatically because of rising property valuations even through the assembly has worked to keep the mill rate on the property tax low. Anything that can diversify the borough’s sources of revenue will take the pressure off homeowners and other property owners and boost the local economy, he says.

The borough has one other “targeted” sale taxes now, the hotel-motel “bed” tax which brings in revenue to help support regional tourism marketing.

Bernier has one other proposal up for a public hearing in June that is likely to be more controversial. It is to do away with property taxes entirely and substitute an areawide sales tax. Like his marijuana and alcohol taxes, this is being proposed to shift the burden of supporting public services away from property owners and to a more diverse set of taxpayers including visitors from outside Mat-Su who come to the region for recreation.

The city of Palmer has weighed in with strong opposition to this, arguing that an area-wide sales tax on top of Palmer’s existing 4% city sales tax would create a combined 10% sales tax in the city. This is enough to discourage local shopping, harming merchants in Palmer.

There would be similar effects in Wasilla, Houston and Talkeetna, which also have city sales taxes. Assembly member Stephanie Nowers is proposing a variation of this with a lower rate of area-wide sales tax and exemptions for sales within the three cities.