Borough tax proposal brings up questions

Complaints from Wasilla City Council members about the Mat-Su Borough's proposed 1-percent sales tax have prompted the borough assembly to schedule a series of meetings with Valley city officials even as the public comment process continues.

After the assembly heard the concerns from some Wasilla council members at last week's borough assembly meeting, borough director of finance Tammy Clayton met with representatives from Wasilla, Palmer and Houston Thursday, the first in a series of planned monthly work meetings to discuss concerns from the cities.

"What we tried to do is take the sales tax ordinances from Palmer, Wasilla and Houston and mirror them," Clayton said. "Unfortunately, Palmer and Wasilla do not match. That's why the exemptions aren't exactly the same."

Wasilla City Council has been vocal in its complaints with the process the assembly has taken with the sales tax so far. Wasilla director of finance and administrative services Ted Leonard said the city's main concerns are three-fold: Differences in tax exemptions, the timeframe the borough has set forth to switch collections from the city to a central borough collection, and a loss of vital statistics the city computes through its own tax collection system.

"We'd lose information on our businesses," explained Leonard. "We'd be entering a whole new world."

Clayton said steps are being taken now to ensure that if the borough starts collecting both borough and city sales tax on Jan. 1, 2005, the collection process will be seamless with the collection process already used in the borough's three taxed communities.

The borough already has tax form designs from 2001, when voters eventually voted down an assembly-requested boroughwide sales tax.

If the assembly passes the most recent resolution to implement a sales tax, Clayton said the borough will start working on updating those forms with hopes that voters will approve the tax in the November election.

"We are not going to spend money to get stuff printed. We will wait to do that until after it passes," Clayton explained. "Right now the primary thing is to get past the hearings."

Clayton said that if the tax is approved, she plans to send out packages of information to vendors throughout the borough immediately.

"It's my intent to have those sent out between late October and the first of November," Clayton said. "That allows them to come back with questions, and gives plenty of time for them to gear up for this."

Clayton said the borough lawyer is busy putting together information for the cities on how its own sales tax exemptions can still be used in computing the city's tax portions. As for Wasilla's concerns on losing statistical information, Clayton said the borough is looking at all possibilities for tax collection.

"We do not want to do anything that would impair them financially," Clayton said.

If the borough does end up collecting city tax as well as borough tax, the process used to pay the cities would be similar to the borough's collection of property tax, with a check cut each month for each city's sales tax portion.

The introduction of the sales tax resolution comes as a result of public testimony earlier this year, according to Clayton.

The assembly's decision not to give the school district the full $2.7 million in added funding requests and to institute a new transfer fee ordinance for real estate sales brought out many Valley residents who asked the assembly for a more diverse tax base.

"Most definitely," answered Clayton, when asked if this would diversify the tax base. "Right now all our revenues are based on property taxes."

Contact Jen Ransom at jen.ransom@frontiersman.com.