SPECTRUM: Boroughwide sales tax would be bad for Mat-Su business

I have invested the last 32 years assisting and equipping Mat-Su Borough businesses with the tools to succeed and employ more of our residents. Being the first back-to-back President of the Greater Wasilla Chamber of Commerce and the founder and president of the of first “private” Economic Development Corporation, during $9 a barrel oil, I am acutely aware of the challenges of operating a profitable small business in the Mat-Su Borough. Serving as the Mat-Su Borough Planning Commission’s Chairman for six years gave me an even keener insight at today’s challenging trends facing local businesses.

Approximately five years ago, a comprehensive study was conducted to examine Mat-Su commuter shopping habits. It revealed that those commuters, who earn nearly as much cumulatively as non- commuters, were spending an average of 39.5 percent of their discretionary income in Anchorage, and beyond.

Top three reasons: Selection, Convenience and chiefly, no sales tax in Anchorage. A 2017 study reported that amount increased up to an average of 43 percent for the same three reasons.

Consumers generally reported thinking, “Take the sales tax we saved on set of tires or furniture we purchased in Anchorage and have dinner, or a get us a treat at no real cost to us.”

Then the question was posed why do they not “build up our home community?” Why not shop “local”? They say they just haven’t been convinced of the value to them personally. As a Marketing/Outreach/Branding specialist, that clearly displays, “No perceived benefit” of current sales tax. If an additional sales tax is imposed in Wasilla or the Mat-Su Borough, any reasonable statistician can come to the conclusion more discretionary cash will leave the MSB, and small businesses teetering on profitability will close. Local Consumer confidence is at lowest since 1986, Alaska is still No. 1 in the nation for unemployment and the Mat-Su, which houses 50 percent of the North Slope workers, took a big hit with Shell Oil’s departure from Alaska and $40 a barrel oil prices. This already has caused a decrease in total spending power of Mat-Su residents and less indirect jobs, because of less oil and gas payroll coming into our community. Everyone will agree, a Mat-Su Borough-wide sales tax would provide one more reason for less “local shopping” and less local loyalty and more leakage of Mat-Su cash into Anchorage and Amazon and beyond.

If the Greater Wasilla-to-Anchorage commuters would just purchase all their gasoline in Wasilla, the increase of revenue to the city could be $ 7,811.00 a day, nearly three million year. My clear and concise findings reveal that a true change of habit, a “mindset” has to occur conveying the benefit of investing locally with our purchases, that I have often single-handedly been trying to instill. But with 2.4 new families moving to the Mat-Su each day, they have not yet established “local” loyalty. And with additional “costs’ to shop local it will only be more difficult to achieve my mantra: “Shop Smart, Sharp Local. Shop Small, Shop the Mat-SU!

We need to change the habits, not increase taxes. We cannot tax our way to prosperity.

You will notice I have not mentioned the so called “Education Sales Tax”, that is a misnomer, the State constitution does not allow a Borough to charge a sales tax, and dedicate to one source. Nor does the Mat-Su Brough regulations allow this, if a MSB sales tax was imposed it would go 100% into the general fund to be spent, invested, or wasted at the discretion of the “then” seated Mat-Su Borough Assembly members wherever and whenever, no guarantee where these funds would end up. I highly encourage any Mat-Su Borough voter, taxpayer or resident to be present at this Tuesdays’ August 1, 2017 MSB Regular Assembly meeting beginning at 6:00 PM in Palmer, Assembly Chambers, be part of the process, after all it’s your business , it’s your hard earned cash, express your concerns, become engaged in the process. You can take your message to your elected Assembly Representative, It’s your three minutes under “Audience Participation” when ordinance 17-094 will be discussed. There are many moving parts to this sales tax wording and implementation at this point, too numerous to cover now, but my experience clearly tells me, this is the wrong tax at the wrong time. On the agenda:

An Ordinance Adopting MSB 3.35, Areawide Sales Tax To Support Education, Levying A 3 Percent Tax On Sales, Services And Rentals Within The Matanuska-Susitna Borough. OR 17-094: