More changes due for sales tax

MAT-SU -- The 1-percent sales tax being considered for placement on the Mat-Su Borough's October election ballot received a mixed review at a special meeting Tuesday evening, and the assembly agreed it is not yet finished with the ordinance.

A relatively small crowd turned out at Tuesday's meeting and about 15 people testified, with a near-even split between those who favored the ordinance and those who opposed it. A few others didn't take a stand for or against the measure, choosing instead to give suggestions about how to make it better.

"You really need to educate the residents before a sales tax comes forward," said Wasilla City Council Member Verdie Bowen. "And … in order to sell this to the people, you're going to have to show them a benefit."

Finding a benefit that will stick is what led the assembly to postpone until Aug. 10 a final decision on whether to put the tax question on the October ballot. The assembly must pass or reject the ordinance at that meeting in order to meet the Aug. 13 deadline for ballot items to go to the printer.

After hearing from a mixture of people in support of, opposed to or with suggestions about the sales tax, assembly members took the opportunity to make a few changes -- making clear in the ordinance a state law requiring potential future increases be approved by borough voters, adding an amendment eliminating taxes for renters and adding another eliminating tax on child care.

Assembly members agreed that an ordinance proposed by Assembly Member Bruce Bush exempting local produce from the ordinance needs more research before it could be considered, but they stalled on a question of how they could prove property owners' property taxes would be reduced, or that

a mill-rate cap could be placed in effect along with the sales tax.

Assembly Member Jim Colver, using an amendment Bush had drawn up but not proposed, asked to add language stating that it was the assembly's desire to "offset existing property taxes with any revenue raised from this ordinance."

"It's a no-brainer -- this is what people were talking about," Colver said. "This just puts it in writing."

Other assembly members said the intent language was toothless.

"What's it mean? That the mill rate is frozen?" Assembly Member Talis Colberg asked. "If you're fixing it to a number, then it means something. If you're not, it means nothing."

Colberg said that when the assembly had last considered a sales-tax ordinance, this same issue came up during the discussion.

He proposed at that time that the sales tax be repealed if the borough property tax exceeded 11 mills, but an attorney opinion at the time indicated Colberg's proposal was out of order, because one assembly cannot, according to state statutes, bind the hands of a future assembly.

Assembly Member Jody Simpson said several people in her district have discussed the proposed tax with her. They'd support it, she said, if it were tied to a mill-rate cap. She asked Mat-Su Borough Attorney Teresa Williams what, if any, avenues are available to the assembly to provide a cap or a way for the assembly to repeal the tax in the future.

Bush asked to add to Colver's amendment language that would place a cap of 10 mills on borough property taxes (now at 11.8 mills).

"That was my original intent when I thought of this amendment," Bush said. With only language describing an intent to keep taxes low, he said, there are no guarantees. "I think it's misleading to the public. I think it is the intent of this borough to keep taxing and keep the property taxes high."

Colver's amendment adding wording reflecting the assembly's desire to keep taxes low passed through a split vote. Simpson, Assembly Member Mary Kvalheim and Colver voted in favor of the amendment, and Colberg, Bush and Assembly Member Betty Vehrs voted against it. Borough Mayor Tim Anderson broke the tie, casting a vote in favor of the amendment.

The sales-tax ordinance will be discussed at a special meeting in the borough assembly chambers at 6 p.m. Aug. 10. Although the amendments were not yet incorporated, the ordinance is available online at the Mat-Su Borough Web site, www.co.mat-su.ak.us/taxes.cfm.

Contact Rindi White at rindi.white@frontiersman.com.