Proposed gravel tax draws fire at Assembly meeting

PALMER — Tuesday’s Mat-Su Borough Assembly meeting got started with some roundly welcomed good news for the future of alpine skiing in Hatcher Pass, but it was mostly downhill from there as a meeting of longer than three hours was dominated by public outcry over a proposed gravel tax.

“There have been plans for more than 50 years to have alpine skiing in the Valley, and tonight we’ve a grassroots group here that’s going to make that half-century dream a reality,” said borough manager John Moosey before introducing Louisa Branchflower of Hatcher Alpine Xperience Incorporated, a non-profit that launched in November of 2015.

Branchflower cited a $20,000 grant from the Fishhook Community Council and a $100,000 grant agreement with the borough that was approved by the night’s end, as the starting point for her organization to maintain the paths and provide ski lift in Hatcher Pass.

“That gives us the opportunity to house volunteer groomers and with grants and funds from the public we can clear trails. This winter we’ll groom the trails and gather funds to eventually have a lift,” Branchflower said.

Assembly member Barbara Doty noted it was more than a recreational achievement, but one of public safety, too.

“(Downhill skiing) had been happening with or without lifts,” she said. “This gives us safe alpine skiing where people aren’t coming onto the road and hitching rides up and down. It’s a safe place where our children can learn alpine skiing.”

But the big issue of the night was Ordinance 16-128. Sponsored by Assembly member Dan Mayfield from District 5, it would “establish a tax on certain natural resources whenever the natural resource is severed and removed from property within the boundaries of Road Service Areas within the borough and providing for penalties for failure to pay taxes due by adopting MSB 3.55 Road Service Area natural resource severance tax.”

Set to be voted on after public discussion, this ordinance would, essentially tax gravel producers and send that money to under-funded Road Service contractors, an exchange deemed fair because larger, hauling vehicles do more damage to borough roads than smaller cars.

Even that contention was one that Jade Laughlin, owner of Central Gravel Products in Wasilla, and one of more than a dozen speakers to take three minutes at the podium, took exception to.

“The problem is that the community didn’t plan for the growth and boom and used sub-par asphalt,” Laughlin said. “I already pay a federal excise tax to use that road. The problem is you have studded tires on 55,000 commuters on those roads every day.”

Furthermore, Laughlin said, such a tax would make building more expensive to, not only homeowners, but the borough itself.

After nearly an hour of one voice after another against the ordinance, Mayfield got his chance to defend it, and hopefully move it to a vote.

“Most RSAs struggle constantly. This revenue will help to alleviate that,” he said. “The influx of cash, over time, may reduce the tax burden to citizens… We are seriously behind on maintaining roads. They are substandard… and expensive to maintain.”

Many in the audience grumbled at his assertions.

“I know you’re against this and I appreciate that you showed up and gave your testimony,” Mayfield said. “Assuming this is passed at some point, it will be a burden to you as business operators to comply with the tax… This is really about building community, promoting public safety and promoting commerce — those are high ideals.”

Mayfield went on to say that businesses aren’t paying the tax, customers are, and that in a competitive environment there should be no loss of business to any of them. Mayfield also said that private homeowners would not be affected by the tax because the ‘two triggers’ require that material be ‘severed from the ground’ and when moved from the property site.

Open to discussion among Assembly members, District 3 rep George McKee immediately called for a postponement of a vote until Dec. 20, which effectively closed discussion unless the other members rejected his postponement.

They rejected it, and with discussion reinstated, Assembly Member Randall Kowalke asked Public Works Director Terry Dolan his thoughts on how such a tax would affect borough projects. Dolan expressed his concern that an excavation at the landfill, may no longer be economically feasible if such a tax were in place. For the project to continue, Dolan said, an increase on fees for use of the transfer station and landfill would be likely.

Assembly member Jim Sykes of District 1 then made a motion to continue the discussion to Feb. 21, a measure that passed with only Kowalke and Mayfield voting against.

In other actions of note, the borough awarded a bid in the amount of $642,982 to Alaska Abatement Corporation for the demolition of the old Iditarod Elementary School, and accepted and appropriated $550,000 from the EPA to fund the Matanuska-Susitna Brownfields Assessment for fiscal year 2016.

Earlier in the meeting, as part of manager comments, Capital Projects Director Jude Bilafer discussed traffic problems on Bogard Road, specifically in the area near the Engstrom intersection, where, due to a lack of connector and collector roads, traffic is becoming an increasing problem. While the borough is in no financial shape currently to deal with the flow itself, Bilafer said it had recently put forth an offer for a partnership with the Alaska Department of Transportation to try to pass federal funding through to the borough for road projects.

Bogard Road is a DOT road, and Bilafer said one of the department’s proposals involve putting in a traffic circle at the location, forcing the demolition of the fire station there.

Assembly member Steve Colligan, from District 4, pivoted the issue away from road quality and toward excessive speeding by motorists.

“Volume is one thing; speeding is another,” Colligan said.

“Our challenge is, you can’t fix stupid if people ignore posted signs,” Bilafer said.

McKee also pushed Bilafer on the borough’s ability to control speed limits. Bilafer agreed that the borough has the authority set the speed limits on its roads, but to institute “18-inch speed bumps… if someone wants to rip their front end out,” as McKee suggested, would be “a failure,” Bilafer said.