Wasilla city council denounces sales tax

This is the eighth in a continuing series of articles relating to the proposed borough-wide 2-percent sales tax measure, which will be on the October ballot. Look for more information in the Frontiersman's Tuesday editions about the sales tax measure and its various effects on borough residents, as well as how the measure compares to the sales taxes that are levied in the cities of Wasilla and Palmer.

WASILLA -- The Wasilla City Council, at its regular meeting last week, passed a resolution denouncing the borough-wide sales tax measure that will go before voters on the October ballot.

Stating concerns that an additional sales tax would cause commuters to purchase goods in Anchorage, causing an economic downturn for businesses in the borough, the council agreed via a 4-1 vote to pass a resolution opposing the ballot measure.

Council member Colleen Cottle, stating her belief that this was a matter best left for voters to decide, opposed the resolution. Don Bennett was not present at the meeting.

The resolution passed despite efforts of borough assembly member Dan Kelly to change the minds of council members by refuting the reasons listed by city finance director Ted Leonard in the resolution opposing the proposal.

Kelly, in his borough report, updated the council on pertinent borough matters and segued into refuting, individually, claims made in the proposed resolution. After making his way through several "Whereases" included in the resolution, Wasilla Mayor Sarah Palin asked if Kelly had more on his borough report, and if he was speaking for himself or representing the assembly as a whole.

Wasilla council member Dianne Keller echoed Palin's concerns.

"I don't think it's fair to report a borough opinion unless other borough assembly members have had an opportunity to comment and vote on this," Keller said.

Kelly said he was speaking on his own behalf, but agreed to hold his comments until the audience participation portion of the meeting, as long as that portion of the meeting would be placed before council discussion of the resolution in question. The council agreed to change the agenda.

When the audience participation portion of the meeting began, Kelly took up his line of comment, noting problems with several of the reasons of opposition.

Kelly refuted claims that a borough sales tax would substantially increase the tax burden on city residents, and took umbrage with the claim that the borough has a "fair and equitable taxing structure" to fund services provided by the borough.

"I think that it's not fair," Kelly said. "Many services . . . are provided, not just for citizens of the borough, but for those who travel through. We're hoping that our tax burden will be lowered because of it."

In response to the claim that enacting a sales tax would add "an expansive new level of bureaucracy," Kelly said the sales tax would be increasing business revenue to the borough and lowering property taxes, even though passage of the measure would mean added jobs at the borough level.

"[The extra $400,000 set aside for jobs to operate the sales tax program] is not going to be just thrown down the toilet by any means," Kelly said.

Ultimately, Kelly asked that the council not take sides on an issue that should be decided in the voting booth.

"This is a . . . resolution that shouldn't go through," Kelly said. "It's up to the voters to determine what they want to do, not the council of Wasilla."

Council Seat F candidate Steve Stoll also weighed in on the issue, stating that although he does not agree that food items should be taxed, Wasilla was weighing in on an issue it shouldn't.

"You folks are being really hypocritical [with] this whole document," Stoll said, "because everything that you're saying, we're doing it here. Why is it going to be so different if the borough's doing it?"

Council member Judy Patrick said she feared a 4-percent tax may encourage the more than 30 percent of the area work force that commutes to shop in Anchorage.

Council member Noel Lowe agreed with Patrick's comments, although he said that as a nine-year commuter, the last thing he wanted to do after a day at the office was wander the aisles of a supermarket before heading home. Lowe said his reasons for opposing the sales tax proposal were based on governmental philosophy.

Wasilla, Lowe said, provides services to people largely from outside the borough, so it's logical for the city -- which has no other recourse to tax those people for the services they use other than a sales tax -- to institute such a tax.

Lowe said it was different for the borough, which has other taxing abilities in its quiver.

"The borough has the means to exact taxation from everybody, essentially, that it serves," Lowe said.

Council members Lowe and Keller also expressed concerns that the borough would simply spend the excess dollars, not lowering the property tax to offset the tax burden as promised.

"The borough would not be going through the arduous transition of going from one form of taxation to another to collect the same amount of money," Lowe said. "They already would have to collect $400,000 more."

Keller suggested Kelly request an exemption for the cities of Wasilla and Palmer, since the two bodies already collect a sales tax.

Mat-Su Borough mayor Tim Anderson said he, too, felt the city was being hypocritical by passing the resolution.

"I find it really troubling that the city should choose to take a position on this issue," Anderson said. "I think that government should remain neutral [on election-related issues]. The other thing that really bothers me is we've been working really hard to try to work together. I think we're making progress -- I guess we just need to work a little harder."

The resolution flies in the face of a gentleman's agreement, Anderson said, that was made nearly a decade ago.

At that time, he said, both bodies were working to put a sales tax proposal on the ballot. The borough agreed to wait until another time to put its sales tax proposal before the voters so Wasilla's could stand alone on the city ballot. The agreement, Anderson said, was that the city would, in exchange, support the borough in its own attempts to place a sales tax measure on the ballot.

Anderson said he felt there may be a more political reason behind the resolution.

"I fully expect to see the city come back with an increase in their sales tax to fund the sports complex," Anderson said.

Palin did not return repeated phone calls to her office Friday.