Borough talks new business regulations

PALMER — Though neither measure actually passed, the Mat-Su Borough Assembly gave a pretty strong indication Tuesday of where it’s headed with two business regulations.

The regulations in question are the tax the borough levies on a business’ inventory and the requirement that all businesses get borough business licenses.

An ordinance borough mayor Larry DeVilbiss offered would have repealed the tax entirely.

Assemblyman Jim Colver wasn’t so sure that was a good idea.

“We’ve heard from a lot of the smaller businesses that have been impacted by this, but I haven’t gotten a call from Home Depot, Safeway, Fred Meyer, Target, and I just don’t know how to explain to my constituents, ‘Well, we had to raise your property taxes to pay for the school bonds and general government, but we gave a break to Home Depot out of Georgia,’” he said.

Staunchly pro-business assemblyman Ron Arvin joked that the cognitive dissonance he was feeling almost gave him heart palpitations, but he’d be in favor of retaining the tax if the borough could use the revenue from it to reduce property taxes.

The borough’s new economic development director, Don Dyer, said the idea is that the Valley could lure businesses here by doing away with the tax, perhaps making the area a hub for at least their warehousing operations.

“For a lot of businesses they’re finding that it’s cheaper to inventory their business out here even with the cost of transporting it into Anchorage,” Dyer said.

Borough manager John Moosey noted that a couple dozen jobs already came to Wasilla when one business did just that. To get more of that, though, Dyer said, he needs to be able to make a good pitch to businesses.

“If we want to increase our economy in the Mat-Su Borough we need a unique selling proposition that says it’s better to be here than to be there,” he said.

Colver floated the idea of maybe pegging the exemption for small businesses at a different dollar amount. Right now, businesses with less than $250,000 don’t have to pay the tax. Colver proposed bumping that up to $500,000.

Borough finance director Tammy Clayton said that kind of a move would knock a couple dozen businesses off of the already short list of those that pay. They included a couple of recreational vehicle dealers, a car dealership, a few smaller grocery stores and at least one liquor store.

Assemblyman Steve Colligan said he wanted more data. The tax currently generates about $910,000 per year. Would eliminating it spur enough commercial real estate development to make that up through increased property tax revenue?

Dyer said he’d been told it could easily make up the shortfall, but he needs to look into it further. The assembly tasked Dryer and Moosey with doing that research and bringing the information back to the assembly.

As for the business licenses, Colligan proposed that one. He said that, as-is, the license is nothing more than a tax. The idea behind licensing businesses is to gather data and get a sense of what kind of businesses are in the borough. But, in Colligan’s opinion, the current business license system neglects the data collection and is focused more on gathering revenue.

On a motion from assemblyman Noel Woods, the assembly gave Moosey and Dyer until May 15 to propose an alternative.

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