Tax rate is lower, focus on new business

The new areawide mill rate is already lower than last year’s tax rate. It’ll likely go lower Monday when the Mat-Su Borough Budget is finalized.

A few weeks ago, the borough manager submitted a pretty flat budget that accommodated the Mat-Su Borough School District’s 3 percent cost of living raise, but held the areawide mill rate flat — except for the bonded indebtedness voters approved last fall for school and road bonds.

The Mat-Su Borough Assembly spent one evening with the school district and two evenings over in Wasilla at the Central Mat-Su Public Safety Building taking testimony on how to spend almost $400 million (local, state, federal dollars). We spent two more nights in Palmer in the assembly chambers sorting through what to fund, what to strike.

Among the additions:

• Five firefighter positions.

• Hours for Sutton and Talkeetna librarian assistants were extended.

• Cities received block grants.

Among the reductions:

• Overtime, training and travel expenses.

• Several road and fire service area mill rates.

These are just some of the 27 or so amendments addressed.

During public testimony, we were challenged with an unusual question when John Klapperich asked us what we were doing to increase revenues. Knowing John as I do, I am going to give John the benefit of the doubt and assume that he was not asking us to raise taxes. I believe he was asking us to shift the tax burden from the residential property owner, who bears 80 percent of the tax load, to a new source of revenue.

The lobbying efforts for state grants at the Alaska Legislature on behalf of the assembly, staff and myself are part of funding projects. However, true revenue will come from newly relocated commercial and industrial business to the Mat-Su. This year you will see a renewed effort to achieve this.

We are in the process of improving the business environment by modifying disincentives like licensing and business inventory taxes. As we grow our local businesses, we shift from being a bedroom community to becoming a self-sustaining economy. Ultimately, the balance of the tax load will gradually shift from the land and homeowner to the business community.

Already, we have taken many measures to create an environment that begins to accelerate our commercial development in the Mat-Su, which brings taxable infrastructure and jobs.

• We completely rewrote the land use legislation, which will ease the process for future development.

• We canceled the airplane tax.

• We brought back timber harvesting, which not only feeds local mills, but helps heat a lot of our homes.

• We are investing heavily in the port and the rail extension.

Last Monday, a barge pulled up to our port carrying a fleet of scrapers for a contractor to get to work on another segment of the Port MacKenzie Rail Extension. Five miles of trees are cleared already from the port uplands to Baker Farm Road. Gravel and water trucks are already busy preparing for the construction of rail embankment.

Another bid for a segment near Houston is expected to be awarded in early June. This will build a tie-in with the mainline of the Alaska Railroad and a bridge over the Little Susitna River. With the expected $23.5 million appropriation from the Legislature this session, another segment of six miles will be built from Ayrshire Road to the Susitna Parkway.

That’s a lot of activity and a lot of jobs, even before the rail link comes online.

We are also looking hard at another concept that is a little more radical and about which I will probably say more in the future — debt management. Though the state will reimburse some of this, today’s debt load is going to cost $110 million over the next 20 years in interest alone. If we were forward-funding our capital projects, we could be putting that interest money into infrastructure instead of into the bankers’ pockets.

We would need to change state law to allow us to get matching grants. Asking the public to vote on our capital investments is part of the idea.

There’s much work to be done to reduce the tax burden on the homeowner, and we’re just gaining momentum.

Larry DeVilbiss has been mayor of the Matanuska-Susitna Borough since January 2011.