Déjà vu: Sales tax hike back on agenda

WASILLA — One mechanism for funding the city’s share — about $6 million — of the price of a new 23,500-square-foot public library is a familiar refrain heard around the City Council table late 2012.

Mayor Verne Rupright will introduce a sales tax increase that would raise funds for the nearly $16 million project at Monday’s regular city council meeting, which may seem like déjà vu for much of the council and community.

Rupright proposes a special election in May asking residents to chime in on a plan to raise the city’s sales tax rate by 50 percent, from 2 percent to 3 percent. Of that increase, .5 percent would be dedicated toward capital projects beginning with the library and the other .5 percent would become part of the city’s general fund.

“It’s the same,” he said. “All we’re asking for is the advisory vote. The council by code can move (the sales tax rate) to 3 percent anyway. Let’s see what the public thinks, just like we did with the sports center.”

Any hike in the city’s sales tax rate would be the first for Wasilla since March 2002, when voters approved a half-cent increase to fund construction of the Curtis D. Menard Memorial Sports Center. That tax had a 10-year limit and ended early in 2010.

Rupright said his proposal addresses multiple financial needs for the city. First, it secures money for the library. Second, it also provides a revenue source for future capital improvements the city may need. It also bolsters the general fund and budget, which is becoming tighter as sales tax collections have leveled off while inflation and expenses continue to rise.

“As you continue to build new infrastructure to replace old infrastructure, with inflation costs year after year, you need that other half a percent to go into the kitty,” Rupright said. “Revenues are flat. It’s not really keeping pace.”

Another benefit of a sales tax increase is it pays for projects without the city incurring debt through bonding, the mayor said.

“Instead of cutting back on city services and quality of life and be put in the untenable position of laying off people, forward-fund the city and not get bonded debt,” he said.

It’s an argument Wasilla City Council had trouble approving it when Rupright’s proposal first came up last year. While the council was unanimous in its support for building a new library, many members expressed uneasy with continuing to collect taxes for unknown and unidentified future capital projects the community may or may not support.

That was one reason councilwoman Colleen Sullivan-Leonard said she was hesitant to move forward last year.

“Quite honestly, I’m a little surprised to see it coming before us again,” she said. “The bottom line is, I support a new library and I think we can come to a conclusion that a new library is necessary and the community wants it. The funding mechanism to do that is something we’re going to figure out.”

That said, she said she thinks if the council were to go with a tax hike specifically for the library with a sunset clause, the city has already demonstrated it can be trusted because it stuck to its promise to sunset the sports center sales tax.

"I would support a 1 cent increase in sales tax if there was a sunset clause," she said. "Much like we did for the sports complex, which I believe showed true accountability to our residents."

Councilwoman Dianne Woodruff also expressed apprehension the first time the tax hike was proposed and said she has the same questions this time at bat.

“If it’s 1 percent and just for the capital budget, I’m all for it,” she said. “If it’s 1 percent and for anything else, I’m not for it. I’m not so OK with that part. I think the 1 percent will be just fine for the library. Then, if we need another one, we go back to the public for another project.”

Sullivan-Leonard said she also could see a compromise at some point where the council could implement a sales tax increase for the library only.

“I think that’s a win for the library and for us as well,” she said.

Sales tax is the city’s main source of revenue. In fiscal year 2011, Wasilla collected about $11.6 million in sales taxes and about $11.9 million in fiscal year 2012. Based on those collections, a 1 percent increase would generate nearly $6 million a year.

House Bill 69

Along with the introduction of the sales tax proposal, Rupright has a busy agenda for the council’s regular meeting Monday, including request for the council to take positions on several resolutions. Two deal with state Department of Transportation plans to upgrade the Parks Highway and Knik-Goose Bay Road. A third asks the council to officially support House Bill 69.

Sponsored by state House Speaker Mike Chenault, HB 69 exempts certain firearms and firearms accessories from federal regulation. It also would make it criminal for federal officials to enforce federal firearms restrictions in Alaska.

Rupright said he holds strong opinions about the potential for federal gun restrictions and said that he believes those views are shared by a majority of Wasilla residents. Trusting the federal government to regulate firearms is a scary prospect, he said.

“We better stand up and say hold on here a second,” Rupright said. “It hasn’t been that many years ago when 87 people died in Waco, and that was police and federal (personnel) with high-powered weapons and helicopters. They put more kids to death in one fell swoop there. … Nobody’s been called to account for that. No one. I don’t feel comfortable having some government that acts like that make the rules. We all know what gun registration and seizure leads to.”

Contact reporter Greg Johnson at greg.johnson@frontiersman.com or 352-2269.

What: Wasilla City Council meeting.

Why: Introduction of putting a 1 percent sales tax increase to an advisory vote of Wasilla residents; council consideration of a resolution supporting House Bill 69.

When: 6 p.m., Jan. 28.

Where: Wasilla City Hall, council chambers.