Public may weigh in on proposed fee repeal

April 8, 2005

DAWN De BUSK/Frontiersman reporter

If a real estate transfer fee ordinance established last summer to generate more money for the Mat-Su Borough is repealed by the Assembly, the $527,000 collected so far would be given back to those who paid the fee.

Money used for repayment would come from the non-areawide fund, Borough Communications Coordinator Frank Ameduri said Thursday.

This proposed repeal of the transfer fee ordinance will be up for public comment April 19 during the regularly scheduled 6 p.m. Assembly meeting.

"[The ordinance] had some unintended consequences," said Assembly Member Betty Vehrs, who voted for the ordinance last year. "When I see something that doesn't work. I'm not afraid to try to change it for the good of everyone."

"What happened is that we were looking at malignant growth. Families moving in were using more services than they were paying for," said Vehrs, explaining that the borough was struggling with a way to find funding for basic borough services.

Last year, the Assembly passed the ordinance, hoping it would generate funds every time land changed hands. The ordinance took effect July 1, 2004.

It was illegal for the borough to create exemptions to the real-property transfer fee, such as waiving the fee when someone simply changed their deed to reflect a name change after getting married or divorced or even when legally changing one's name.

Each real estate transfer fee costs $170, according to Borough Assessor Allen Black. The fee is applied to the recipient of the property.

The Assembly's decision to create a fee for transfers of real property originated from a desire to ferret out a source of funding other than property taxes. Assembly members couldn't tie the fund to any specific project, but wanted the extra money to help pay for educational needs in the Mat-Su Borough School District.

"In my view, from the information I had, the ordinance was going to bring in close to a million dollars worth of revenue. We'd be able to keep the mill rate low and pay for other services like education," Vehrs said.

Last spring, it was projected that $900,000 could be raised in one year from the fee on real property transfers.

At the time the ordinance was passed, Borough Manager John Duffy had completed the borough's budget for fiscal year 2005. Since the real estate transfer fee fund wasn't tied to the borough budget, it would supply additional funding for the schools. However, the ordinance did not directly tie the surplus of funds from real estate transfers to any specific project or area.

"I understand the borough's need to require funds for education, but it's a misuse of a fee that in reality is a tax," said Casey Steinau, legislative chair of the Valley Board of Realtors. "The public commentary prior to the passing of the legislation was all against it. The public outcry afterward shows the need for a repeal."

If the proposed repeal passes, those fees would no longer be charged and all residents who have paid transfer fees since July 2004 will be reimbursed from the borough's non-areawide fund.

If the repeal does not pass, all of the revenue generated will stay within the borough assessment office. It would pay for wages involved in processing real estate transfers, according to Ameduri.

"We (the borough Assembly) are still looking at finding a way to pay for services," Vehrs said.

Contact Dawn DeBusk at 352-2252.