Assembly ponders sales tax

At its Tuesday night meeting, the Borough Assembly introduced an ordinance that would initiate a sales tax of up to 3 percent across the borough, coupled with a 7.8 mill rate cap on property taxes. Interestingly, the ordinance was introduced by Cindy Bettine who represents the western end of the borough — Big Lake to Knik — where a lot of businesses would be affected that currently don’t have to collect taxes. Probably better she did it than one of the assembly members who represent areas that have cities in them where sales taxes are already imposed. That might seem like piling on from the municipal taxpayers’ perspective.

That brings up the larger question. After perusing some 40 pages of whereases and wherefores, there doesn’t seem to be any mention of how this proposed tax would affect those towns where taxes are already in place.

Take Palmer for instance. The city has a 3 percent sales tax. Does that mean if the voters OK the new tax then people who buy a tire in Palmer will have to pay 6 percent?

If that’s the case, this ordinance is dead in the water long before the June 2 special election comes around. Not that it’s likely to be well-received in any instance.

If, however, the tax is levied only on unincorporated areas, then it might level the playing field a little for those cities. Not that there are a ton of businesses out there in the unincorporated areas. But there might be some places where buying that tire could attract shoppers away from Palmer because right now, Monster Tire Company in Sutton doesn’t have to include a tax on the all-weather Michelin.

The other way of collecting the taxes might be for the borough to collect all the taxes — from cities and outlanders — and then redistribute the $20 million it thinks it will generate and send back to the cities their rightful share.

The tax will be imposed only on goods and services of less than $500, so people who want the latest laptop or four-wheeler won’t be affected. There are many other exemptions as well. Food stamps and school lunches escape.

Of course, this new tax would also require more employees to collect and distribute the money and others to enforce the ordinance. That figure has been estimated at between $250,000 to $400,000, resulting in a nice net gain.

In the end, if voters OK the tax, it has to be fair. Adding additional taxes on municipalities that have been trying to pay their own way with their own taxes would not be fair.