Borough budget short $11.9M

PALMER — The proposed borough budget shows a limited property tax increase for 2016, but more substantial changes could loom in the future, Mat-Su Borough officials said.

The local property tax rate has hovered around the 10-mill mark since about 2009, according to budget figures presented to the borough assembly Thursday morning.

But according to borough manager John Moosey, the status quo won’t cover the borough’s costs this year. His proposed budget calls for an increase from 9.662 to 9.815 mills to offset increased costs and revenue reductions.

That means the owner of a property assessed at $200,000 would pay $1,963 in area-wide taxes for 2016. Plus non-area-wide taxes such as fire or road service assessments.

The $11.9 million deficit is the difference between budgeted revenue, estimated at $131.8 million, and general fund expenditures, estimated at $143.7 million, according to documents from an assembly member listening session held Wednesday.

Moosey said new tax exemptions for disabled veterans and seniors and new infrastructure resulted in the increase.

“We have six new buildings that we have to maintain,” he said. “The assembly has done two additional exemptions for senior citizens and disabled veterans.”

Borough assembly member Jim Sykes says repealing a registration exemption for vehicles older than eight years could net the borough an additional $2.2 million in revenue. Sykes also suggested a 2 percent summer sales tax, which could generate as much as $1.4 million in revenue.

He offered the proposals among a list of potential revenue diversification measures at a local listening session, alongside a gravel extraction tax, re-instating airplane registration, and a marijuana excise tax, which would net about $500,000 for the borough, Sykes estimated.

The borough also faces risks of dated infrastructure, costs associated with the F/V Susitna ferry and future school construction, as well as a looming series of lawsuits over the Public Employees’ Retirement System, which could ultimately represent a multimillion-dollar liability for the borough.

“This is the document we need to make changes off of,” Moosey said. “I know there’s going to be a lot of changes.”

The total assessed value of the borough grew about 3 percent last year, to about $9.3 billion, according to budget figures. That represents property tax revenues of $93 million, which is the largest share of borough revenue, budget figures show.

The first public hearing on the borough budget is at 6 p.m., Monday.

Contact Brian O’Connor at 352-2269, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.