Revenue drives propsed bed tax changes

PALMER — The Matanuska-Susitna Borough Assembly has decided not to extend the borough’s bed tax to RV spots.

Dave Hanson, the borough’s director of economic development, said the original tax passed by voters in 1986, was very broad, potentially applying to a number of overnight accommodations. The assembly was within its powers to widen that tax base, which currently includes just motels and hotels.

This week, Hanson proposed two changes. The first would change the maximum length of stay that could be taxed from 30 to 60 days. The second would have applied the tax to RV spots.

He said a conservative estimate put revenue from a tax on RV accommodations at $64,000 a year. That money, he said, could be put toward projects the borough hopes to implement: more public restrooms, highway waysides and informational kiosks.

Karen Harris, president of the Mat-Su Convention and Visitor’s Bureau and owner of Alaska Garden Gate Bed and Breakfast, said she wasn’t sure Hanson’s revenue projections would pan out.

“To us it seemed like kind-of small peas,” Harris said.

MSCVB Executive Director Bonnie Quill said she felt the money made by taxing RVs would not be worth the public relations hit the borough would suffer.

“The PR problem would be that Mat-Su is the only place that’s charging a bed tax to RVs,” with the exception of the Denali Borough, Quill said.

Wayne Biessel, Mat-Su Area Superintendent for the Alaska State Parks system, said that rolling out a tax on state park user fees would be problematic. He said the tax would amount to 50 cents per RV site, which would conflict with parks policy of charging fees in round numbers. Essentially, he said, it’s hard to get people to stuff $10.50 into a fee envelop.

That “fee accountability” problem translates to extra expense for the state. Biessel said a $1 fee hike costs $2 to administer. They could go to $15, he said, but then they’d likely be pushing out lower-budget visitors who’d end up camping somewhere illegally.

Finally, Biessel said, “We question the legal validity of this effort,” adding that the state’s attorney general is looking into the question of whether the borough could even tax state parks.

Eventually, the assembly voted to strike the provision extending the tax to RVs. Most assembly members had their own reasons.

“I think our notification of the industry wasn’t very good,” Assemblywoman Cindy Bettine said of why she opposed extending the tax.

Assemblyman Rob Wells said he is concerned that the coming year would be a rough one for the tourism industry and noted that Canada border crossings continue to decline, perhaps an indication of a reduction in RV traffic.

Assemblyman Tom Kluberton said RV visitors are using the public facilities and are targets of MSCVB marketing just as much as hotel guests.

“I know who’s carrying this load and it’s extremely unfair,” Kluberton said. But he said Biessel won him over when he testified that separating RV users from tent campers would be a very difficult task since state parks make no such distinction.

Assemblyman Pete Houston, noting that the assembly seemed relieved when Hanson said the state was not extending the tax to tent campers, said, “I would sooner include paying the fee to pitch my tent than pulling RVs out.”

Houston and Assemblyman Mark Ewing voted against striking the RV provision. Ewing said he’s against the idea of a bed tax.

On Friday, he said he’s making a presentation to the MSCVB about an alternative “entertainment tax” that would amount to a 2 percent tax on anything from river rafting tours to flight-seeing to golfing. Hotels and motels would be just one piece of a much larger pie, he said.

The final ordinance passed with Ewing opposed. The only major change it made was to raise the maximum hotel stay that could be taxed from 30 to 60 days.

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