Voters, don’t be fooled — sales tax has problems

While reading the comments of the assembly and the mayor about the new sales tax ordinance we will be voting on in October, I decided to do some fact checking myself.

Lowering and capping the areawide mil rate from 9.98 to 7.3, lowering assessed values by $20.000 and instituting a 3 percent sales tax so everyone will get to pay a portion of our borough taxes sounds like something that might work. So I went online to the borough web site and decided to download ordinance “09-056” myself and read it. While at the borough web site, I downloaded the survey that predated this bill and found that out of 604 who took the phone survey: 518 were from Wasilla and Palmer core area, while the other 90 percent of our borough totaled only 86 surveyed. The further you get from the core area the higher the total mil rate and the higher you pay for property tax. Divide it up and not many from my location outside the core area were polled, yet our assembly voted to send it to the people for a vote in October. The people have already voted “no” on this type of ordinance twice in the past because we, the taxpayer, will be excessively taxed three ways.

The ordinance itself is 43 pages long, easy to read and easy to follow. The only good I found was lowering assessments by $20,000 on primary residences and I feel it’s a step in the right direction. The rest of the ordinance was basically a disaster.

To begin with, capping the areawide mil rate (only part of our property tax formula) is not capping our property tax mil rate completely as it may suggest. The non-areawide, fire and road service mil rate is what has been climbing in our areas, escalating my total mil rate from 15.9 to 17.31 during the past two years. This means without a cap on those three items that always seem to climb, I could see the exact same total mil rate of 17.3 I am paying on now in only three years after they pass the cap. I also notice my assessed value went up $19,000 in the past three years. So when the economy and the housing market pick up in a year or two I would be assessed at an even higher amount than before the $20,000 reduction on assessed value.

My wife and I did the math on our spending for when the e percent sales tax kicks in on items we purchase in the MSB, like utilities, food, clothing etc. We found my household would actually pay $525 more each year under the sales tax/property tax combo, and this would be at next year’s lowered mil rate and $20,000 less on our assessed value. Wow.

The ordinance makes no allowance to college kids paying rent while buying gas, supplies and food to complete their degree. It exempts WIC and other low-income amenities. It strains the elderly on a fixed income. Businesses on the majority buy their products outside of the borough will collect the tax for the borough passing the extra bookwork costs on to the initial price of the retail item sold. We will be paying 6 percent sales tax in Palmer and 5.5 percent (presently) in Wasilla.

All business owners become tax collectors for the borough, and will be required to turn your accounting books over to them upon demand. Violations such as mistakes, omissions, late filing (due the 15th of every month) will be charged $25 initially, 5 percent per month to a total of 25 percent plus 15 percent on top for admin-costs. Page 35 to 36 says, each day an uncorrected mistake, omission, late file or bookkeeping violation continues constitutes as a separate violation requiring $25 per day for the first six days and $100 per day thereafter. The good news is the total cost can only be $5,250 (a 60-day limit). The bad part is they tabulate per violation and I did read you “each day that a violation continues constitutes as a separate violation.” I suggest sole proprietors not go on vacation past the 15th of each month and risk filling late.

Looking through our community council records our MSB assembly representative had not brought this ordinance to the attention of our community asking for our opinion until two weeks after the veto override. So when did the assembly start working for the borough manager and stop being our voice? How can an assembly member act in such a capacity on something as serious as a mayoral veto without constituent opinion since the people have already voted things of this nature down twice already?

George Rauscher is a resident of Sutton and member of the Sutton Community Council.