Palmer city fires first shot at proposed Mat-Su Borough sales tax

Palmer’s city council has fired the first shot at a proposed Matanuska-Susitna Borough areawide sales tax that may appear on the borough’s municipal sales tax ballot in November.

A resolution opposing the sales tax was approved unanimously at the Palmer council’s meeting Tuesday, May 12. The borough has not yet approved the proposal to be put before voters. The matter will be before the assembly in June.

The Palmer council’s opposition was in its Resolution 26-013. The borough proposal is for a 6.5 percent areawide sales tax that would be coupled with a repeal of property taxes.

However, the borough tax, when combined with Palmer’s existing 4% sales tax, which is the city’s normal 3% tax and a temporary 1% sales tax to help pay for the new Palmer library, would create a combined 10.5% tax through October 2027.

This would negatively impact Palmer by causing retail shoppers to shop or relocate outside the city. “This would undermine the city’s home rule power to control its own revenue sources,” the resolution said.

There would be similar negative impacts on Wasilla, Talkeetna and Houston, each of which have city sales taxes. In those communities the combined sales taxes would rise to 9%, 9.5% and 8.5% respectively, the resolution said.

Mat-Su assembly person Michael Bowles introduced the proposed borough tax as a way to diversity revenues and reduce the property tax burden on residential homeowners and businesses.