Borough sales tax does not add up

My wife, Linda, recently retired from her job as a full-charge bookkeeper. She is meticulous about keeping track of the sales tax on items we purchase and reports the totals each year on our 1040 to the IRS for a deduction credit. The past three years, our annual sales tax expense has been consistently between $1,100 and $1,200. At a 3 percent sales tax rate, this computes to $39,600 in taxable items purchased by the two of us.

Our shopping habits are pretty straight forward: If Palmer has what we need, we buy it in Palmer. If not, we buy it in Wasilla. If neither area has what we need, Anchorage is our last option. In the past three years, we have only purchased one item costing $1,000 or more. Remember, this is just for two people who live in an average home close to the range of the borough’s average valuation of $209,000.

The most recent figures we have from the U.S. Census Bureau (2007) state that the median household income in the Mat-Su Valley is $64,969. There are two things to remember here: This is before tax gross income and 50 percent of the households earn less than $64,969. Now comes the borough assembly telling us that by reducing the mill rate to 7.3 mills, and if you only spend $23,533 on taxable items, this program will be “revenue neutral.”

There are two fundamental problems with this scenario. The $209,000 figure the borough puts out is on an average home, not the median home. They simply took the total valuation of all properties and divided that figure by the number of properties. It could very well be that 30 percent of the households are so highly valued that they bring the other 70 percent up to the $209,000 figure. Secondly, how many households pay just $23,533 on taxable items? Nearly all goods and services are taxable. This proposed borough sales tax is going to give a nice break to the absentee and part-time property owners while adding an onerous burden to everyone else.

Linda and I do not relish the idea of what amounts to signing over one of our Permanent Fund checks to the borough on top of what we already pay. What about the young families with children? They will pay more having homes lower than $209,000 and paying much more than $23,533 in sales tax. Both parents are usually working their tails off to make ends meet. It just is not fair to slowly bleed them into poverty.

Do not be fooled by the assembly members who say they are only doing this so the voters have an opportunity to say “Yes or No.” This is nothing but a side-step to minimize their responsibility for backing the borough sales tax. It would be similar to the Palmer City Council passing a ballot measure to tear down our library and allow a big-box store to take its place; just so the residents of Palmer have a right to say, “Yes or No.”

The Mayor for the city of Palmer sides with Borough Mayor Colberg, Assembly Member Mark Ewing, Wasilla Mayor Verne Rupright and Houston Mayor Roger Purcell on this matter.

John Combs is mayor of Palmer.