Wasilla anticipates boost in tax revenue

WASILLA -- Fiscal Year 2004 projections promise good things to the people of Wasilla.

According to Ted Leonard, finance director for the city of Wasilla, sales tax revenue is projected to increase by 5.1 percent during the upcoming fiscal year.

"The sales tax revenue is our life blood," Leonard told Greater Wasilla Chamber of Commerce members during Tuesday's chamber luncheon. "It provides 88 percent of our operating revenue and 73 percent of our total revenue."

Last year's sales tax revenue had the city scrambling for a while. Normally sales go up October through December, due to the injection of permanent fund dollars and Christmas spending.

Last year, sales tax revenue during those times was actually 1.5 percent less than projected; spending picked up around March, balancing out the projected revenue.

"We believe people were hanging on to their dividends longer," Leonard said. January through April are usually the lowest sales tax revenue months, then it picks up May through August due to summer recreational activities and tourist dollars. August picks up even more -- Leonard suspects it is due to students getting ready for school -- and then September drops off until the permanent fund dividends show up mid-October.

"The trend (increased sales tax revenue) goes up every year," Leonard said. Sales tax growth for this fiscal year is approximately 6.15 percent higher than last fiscal year.

Leonard said he believes the increase in sales tax revenue is directly related to the increase of new businesses in the area and the willingness of customers to shop locally, instead of driving to Anchorage. By the end of the 2003 calendar year the number of businesses in Wasilla numbered 1,584, a 37.7 percent increase since 1999.

Population growth also plays a role in the city's revenue increases -- the population of the Mat-Su Borough has grown more than 32.5 percent since 1994 and the city of Wasilla's population has grown more than 60 percent since the 1990 census. Unless an unforeseen event or series of events occur to knock the city off its current path, the city's sales tax model projects the borough's population will grow approximately 43 percent during the next 10 years, bringing the borough's population to more than 92,500 people.

Leonard also explained where the sales tax revenue is spent once it reaches the city's budget. Debt services, which pays for the $14.7 million Multi-Sports Complex bond and the $5.5 million road bond, uses the most -- 24 percent of the sales tax revenue. Public safety expenditures take second with 21 percent, and capital projects take third with 19 percent. Specific capital projects this year include a $4 million utilities improvement, a $1 million road project to the airport and a number of smaller road projects.

Leonard also explained the city's new strategy to retain, attract and expand quality businesses in Wasilla: The Economic Development Department has been created, and a new economic development director is scheduled to be hired on this August. The city hopes to expand upon and diversify Wasilla's tax base.

One of the main goals of the department will be to create a new community profile document that would be specifically targeted at businesses.

The current community profile document is targeted for people interested in moving to Wasilla.