Voters to decide tax change

WASILLA — The more things change, the more they stay the same.

Wasilla city voters again will face a decision this fall to keep the sales tax rate at 3 percent after a 4-2 city council vote Monday. The sales tax had been 2 percent until a 2013 ballot initiative approved a 1 percent increase to collect $15 million for the construction of a new library. Officials have said that goal will be met by February 2016.

The 2013 ballot question said the tax increase would be rolled-back once the specified revenue was collected.

But in the meantime, city staff members have asked the council to approve another ballot initiative to retain the sales tax rate at 3 percent permanently. Officials say the move would raise roughly $6 million in additional annual revenue and would forestall the need for a city-only property tax.

The extra money is necessary because of looming capital projects ranging from routine road maintenance to a possible new train station, to the possibility of buying the former Iditarod Elementary School and turning it into a replacement public safety building, supporters say. In addition, operating costs from the Curtis D. Menard Memorial Sports Center and potential future operating costs from the new library create considerable operating costs for the city to manage.

The bottom line is that government costs money, said Mayor Bert Cottle. The city has received $51,440,300 over 15 years from a combination of state and federal funds, an average of $3.4 million per year. Caught between a state budget crisis driven by an oil price slump, planned decreases in revenue sharing, and federal belt tightening, the city can no longer rely on those funds, so local taxpayers will be asked to step up, Cottle said.

“At some point, government costs … pick a number. A dollar,” he said. “If government costs a dollar, you gotta get that dollar somewhere. You have a minimum cost, so where does that dollar come from? You have the people inside the city limits, which — counting kids, dogs, and cats is approximately 8,500 people — or the people who use our services, directly or indirectly, being about 90,000 throughout the Valley. Do we kick people out of the park that don’t have a city of Wasilla ID? Do we charge user fees?”

Opponents, like councilwoman Colleen Sullivan-Leonard, point to recent budgets containing increasing tax revenues and decreasing expenditures and say the increase is too much, and that careful cost management provides the city with revenue council members haven’t used.

“That’s money we can use for capital projects,” she said. “We don’t need to tax more to build government more. That one-penny sales tax is nearly $7 million.”

Sullivan-Leonard also questioned the list of future capital projects. The list of projects belonged in the budget cycle, she said.

“$85 million in projects is a real aggressive list,” Sullivan-Leonard said.

Other opponents, like Sandy May, told the council that if it asks voters to retain the increase, it could hurt its chances for getting voter approval for a temporary sales tax increase to fund a future capital project.

“I feel like this should be a separate deal from raising the sales tax 1 percent, because it was created to do that (raise library funds), and I think that if you’re going to raise the tax it should be on the ballot as a separate issue,” she said.

Nearly all those who testified at the meeting spoke in opposition to the increase. However, a representative from the Greater Wasilla Chamber of Commerce read a resolution in support of the measure.

If the city kept the rate unchanged, city officials would be going back on their word, Sullivan-Leonard said.

She pledged to make the increase a campaign issue.

“I hope the voters, come October, will see that and will understand that it’s not a necessity, that we don’t need to increase sales tax,” Sullivan-Leonard said. “We need to tighten our belts like they are. We need to evaluate what’s going on at the state and federal level, and if new taxes are being imposed from there, we need to engage that in our community and see what we can do from there to reign in spending. I’m really disappointed with what happened this evening.”

In other business, the city council also voted 4-2 to move ahead with the sale of the Meta Rose Square building.

Contact Brian O’Connor at 352-2269, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.