Borough proposes tax hike

PALMER -- The Mat-Su Borough Assembly has begun consideration of its 2005 budget, and it could be a double whammy for property owners.

Coming on the heels of a more than 13 percent rise in property tax assessments, the proposed budget would hike the mill rate from 11.48 to 12.95 mills. According to estimates from borough administration, for a home valued at the borough average of $160,000, that would ring up to $2,070.

That's not including an added $2.7 million the Mat-Su Borough School District has requested, in anticipation of increases to the state's foundation funding formula. If that funding were added in, the areawide mill levy would be 13.75 mills, or about $112 more for the average homeowner.

Kim Floyd, the school district's public information specialist, said the added funding will allow the district to increase class offerings at area schools. A group of Valley principals, she said, is working to draw up a specific list of what would be done with the added money, and they plan to present that information when the district presents its budget to the assembly April 29.

"We're going to try to demonstrate what the importance of having those funds available is," Floyd said.

Although the numbers have been released, the budget hasn't passed yet, and two borough assembly members, Deputy Mayor Jim Colver and Assembly Member Mary Kvalheim, held a press conference Wednesday to ask for direction from taxpayers.

"I simply want to see [education] supported to the maximum," Kvalheim said. "We want to hear from the public and see how they want us to do it."

Borough Manager John Duffy said the increase in funding can be attributed to several factors, but perhaps the largest increase is due to cuts from the state. Unfunded state mandates, such as property tax exemptions for senior citizens and disabled veterans, have risen sharply in the last year, Duffy said, up as much as $2 million. Cuts to state revenue sharing with Alaska communities has taken a toll, too -- nearly $850,000 of the borough's budget is attributed to lost revenue-sharing dollars. But the state isn't solely to blame. A 25-percent rise in workers' compensation, in addition to rising costs of health care and unemployment costs increased the mill levy by about .35 mills, according to borough figures. Another significant change from last year's budget is that several one-time sources of funds, such as money from lawsuit settlements, is not available this year. Those one-time revenues added up to more than $4.7 million, or nearly 1.2 mills.

And there are increases to the budget as well. Citing growth as a driving factor, 17.5 new borough positions are being requested through the budget. Duffy said most of those positions will be paid for from federal grant funds, user fees and other outside sources of income. The total increase to the budget from the added positions, Duffy said, is about $350,000. Some are already saying more new positions should have been created, but Colver said other revenue sources must be in place before that time.

"Some people want increased police protection -- can we afford that on property taxes alone? It all comes back to, we have one funding mechanism," Colver said.

The assembly will be meeting Tuesdays and Thursdays over the next month, with a meeting to adopt the budget scheduled for May 13. Next week, the assembly will hear from the departments of administration and law about their budget proposal, as well as from the clerk's office and the mayor's office at its Tuesday, 6 p.m. meeting. The school district and departments of community development, finance and planning will present their budget proposals at 6 p.m. Thursday.

Contact Rindi White at rindi.white@frontiersman.com.