Mayor vetoes sales tax measure

PALMER — Efforts to put a borough-wide sales tax to a vote of the people are on hold, at least for now, after Mayor Talis Colberg vetoed the measure.

An ordinance putting a 3 percent sales tax on the October ballot passed at Tuesday’s Assembly meeting, among the first Colberg has chaired since he was sworn in as mayor July 23.

By Wednesday morning, it was vetoed.

“This is a reallocation of more taxes on the working poor in the midst of serious recession,” Colberg wrote in his veto statement.

He seemed unconvinced by assembly efforts to make the tax “revenue-neutral” through a property tax reduction more-or-less equal to the sales tax revenue.

“The effort to make the tax ‘revenue neutral’ essentially ends after the first year if it happens at all,” Colberg wrote.

The sales tax has come under fire from the cities of Houston, Wasilla and Palmer, who worry that a tax on top of their cities’ taxes could hamper business and have expressed doubts about sales tax revenue being promptly handed to the cities once the borough is in charge of collecting it.

“Talis is, in my opinion, sticking to doing the right thing,” Wasilla Mayor Verne Rupright said Thursday.

Houston Mayor Roger Purcell echoed Rupright’s sentiments.

“It’s a very poorly written and it’s a very bad ordinance that they’re putting through,” Purcell said.

The sponsors of the ordinance, Assembly Members Pete Houston and Cindy Bettine, argued that the tax burden in the borough is currently borne exclusively by property owners. They crafted the resolution, they said, specifically to ease that burden.

“We are here to reduce property taxes with a sales tax, that is our intent,” Bettine said.

Assemblyman Rob Wells offered up another reason to vote for the ordinance.

“I’m just pleased that we put this kind of issue before the voters periodically, whether it be a sales tax or some other issue. I don’t think we do enough of it in this borough,” Wells said.

But the audience, or at least the ones who testified, disagreed. An anonymous person dumped a box of teabags on the borough’s front steps, likely referencing the spate of local “Tea Parties” to protest big government.

“(I) deeply resent having to come here to say I don’t want a property tax and a sales tax,” said James “Lazy Mountain Jim” Garhart, noting that the voters have repeatedly opposed a sales tax. “I’m starting to lose track, but I think this is the sixth time we’ll be voting this down.”

At Tuesday’s meeting, the body hashed out amendments which, among other things, said the assembly may pass an ordinance setting up a special account for any sales tax collected exceeding the reduction in property tax revenues. The money in the account would then be used to further lower property taxes.

Bettine also advocated putting a cap in the property tax at 7.3 mills. The ordinance as written put the cap at 7.8 mills. The current property tax rate is 9.98 mills.

A reduction to 7.3 mills counts on sales tax receipts of about $24.1 million. The borough’s number crunchers estimated sales tax receipts, on the high end, at $23 million. Bettine’s motion met with objection. The assembly was more comfortable with a 7.4 mill rate, which lines the tax receipts up with the $23 million figure.

“I really thought when I came in here I would be proposing an even seven,” Bettine said. “What we hear over and over and over is that they, they being the voters, want to see a real effort to reduce the budget.”

The assembly eventually settled on the 7.4 mill cap.

Assemblyman Mark Ewing asked the borough’s attorney, Nick Spiropoulos, whether all these changes to the ordinance necessitated another public hearing. Spiropoulos said they did not.

Rupright, for one, said he didn’t like what he saw at the meeting.

“They closed the public hearing and then literally re-wrote that entire thing in front of us after all of the comment from the week before,” he said.

Whatever the case, it’s doubtful that Colberg’s veto will hold for long. The assembly passed the measure 5-2, with assemblymen Mark Ewing and Tom Kluberton in opposition. That vote itself is enough to override the veto.

“I am not unmindful that the assembly vote (5-2) was sufficient to override a veto. However, I do think that this is an opportunity to pause and reconsider the consequences of creating this new tax,” Colberg wrote in his veto memo.

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