City of Wasilla leaders oppose Mat-Su Borough areawide sales tax ordinance

On Aug. 3, the Mat-Su Borough Assembly will introduce an ordinance that relates to levying a 1.5% areawide sales tax to pay back the bonds over five years or until $73 million is collected, whichever is earlier, and then expire.

Though the city is not opposed to infrastructure improvements, the 22 projects listed provides for only two projects within the city of Wasilla with a cost of $5.5 million or 7.4% of the total bond package. This areawide sales tax would pay for the issuance of bonds to fund these projects. A 1.5% sales tax would generate approximately $12.5 million per year or $62.5 million over five years, funding 85% of the general obligation bonds issued.

The city has been a good steward of their financial house and we do not see a reason for the MSB to cause a hardship on the city. There are various costs to this initiative beyond the collection of the tax. There is the cost of infrastructure (hiring more people, buying equipment, etc) to set up the systems and process to collect the tax from the businesses areawide.

With the MSB currently collecting revenue from the city of Wasilla in the form of property tax ($11.5 million), cigarette tax ($4 million), bed tax ($150,000) along with alcohol tax and motor vehicle tax, an additional areawide sales tax would be excessive taking $12.5 million out of Wasilla’s economy per year. This could create a hardship on the city causing us to have to reinstitute property taxes.

As mayor I will continue to stand strong and engaged to do what is best for the city short term and long term as we continue to be the fastest growing city in the state of Alaska. At this point we will not support this ordinance and strongly ask our Assembly representatives to do the same.

Glenda Ledford is the mayor of Wasilla.