Borough takes stock on tax

PALMER — Around the Mat-Su Borough Assembly, debate over a certain tax has dissolved into one about how government should relate to business.

The tax in question is the business inventory tax. In May, the assembly decided to change the tax so that businesses with less than $1 million in inventory were exempt. That bar had previously been set at $250,000.

Borough staff had hoped to eliminate the inventory tax altogether, the idea being that with no tax on inventory Mat-Su would be more enticing for warehousing than a place like Anchorage.

“One of the questions to think of is for the type of business that we’re trying to attract here is a million dollars big inventory or small inventory?” the borough’s economic development director Don Dyer told the Assembly at its Tuesday meeting. “For that type of business, a million dollars is small inventory.”

To attract large inventories, then, the tax should be eliminated. If enough warehouses relocate here, the borough could recoup the lost tax revenue through property taxes on those new warehouses and the homes of people who work in them.

Assemblyman Steve Colligan said he’d like to either see the borough enforce the rules — very few businesses file inventory tax reports, even if that report would show they had no taxes to pay — or repeal them.

“I’d also like to make sure that we are meeting our goals of attracting new warehouse space,” he said.

But Assemblyman Ron Arvin, generally a pretty consistently pro-business, anti-tax assemblyman, didn’t like the idea philosophically.

“It’s not government’s role to identify what businesses will succeed or fail; rather, it’s government’s role to be responsive to business,” Arvin said. “We should be sitting at that table listening to the economic development department telling us what businesses want to come, that are interested and what they require to locate in the borough.”

Assemblyman Darcie Salmon didn’t like the tax repeal ordinance because he thought it was badly formed and not ready to be brought to the assembly.

Reacting to calls for workshop meetings on the issue, he said, essentially, that such a move would put the cart before the horse.

“I’m not in favor of having workshops after public hearings on issues that I’ve heard the maker of this motion twice declare that he didn’t think it was the time to have brought the issue forward,” Salmon said.

Assemblyman Warren Keogh agreed that the ordinance wasn’t well-crafted.

“This is an ill-conceived ordinance. I support the motion to postpone indefinitely and kill this ordinance that ultimately will shift the burden to the homeowners,” Keogh said.

For his part, the sponsor of the legislation, Colligan, said that he had hoped to have a longer discussion about it at a planning session the assembly had been putting off all summer.

“I am totally disgusted with our inability to have a twice-yearly meeting,” he said.

Eventually, the ordinance survived defeat and was instead pushed off until November to give borough staff time to gather some better figures.

Contact reporter Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.