Wasilla should keep its tax promise

How important is it for the City of Wasilla to stay true to its promise to sunset a temporary sales tax intended for funding a new public library? I believe it’s very important! If government can’t stay true to its promise to their constituents then that breeds mistrust in government. I gave my word to the residents of Wasilla and those that pay our sales tax that this increase would sunset when library construction funding is complete and I stand by my promise.

Is the city in financial distress? The answer is no. The fiscal health of the city is sound and solid. In fact, we have seen an increase to the fund balance at an average of $1.5-2 million every year for the past five years. To extend the sales tax as the ballot measure states in actuality raises your taxes by greater than $6.5 million annually. This 50% permanent increase in your taxes is equal to about $500 annually out of your pocket! I would rather see you benefit from that extra $500 then to have it go into the city coffers.

Will the library not open if the sales tax is not extended? The answer is no. The increase in revenue will not go toward the new library’s increase in operating costs. The operating costs for the new library have already been established and accounted for through many months of working with The Foraker Group and Library Steering Committee; this was established prior to our request for library funding from the city residents in 2013. We worked diligently to find a way to fund library construction, account for operating costs, and, sunset the increase in sales tax back to 2% for which we believed was accountability with your tax dollars and while seeing the city’s financial health was secure.

Have things changed in the last few years to dictate an increase in sales tax? The answer is no. Nothing has changed in the last five years that indicates the city needs to push for an increase in sales tax revenue. In fact, the last five years have shown the city to reap the benefits of an increase of the fund balance in excess of budget projections by $1.5-2 million yearly. This increase in the fund balance allows the city to put in excess of $8-10 million toward our five year capital improvement projects without disrupting public services. So the question is why tax more when the city is already reaping the benefit of an increase of millions of dollars in the fund balance?

Does the city need to tax more due to the lack of assistance from federal and state grants? The answer is no. In the past five years we have already seen a decrease in state grants to the city and have adjusted for it. There are state roads and infrastructure in and around Wasilla that the state remains accountable for and will continue to operate, maintain and improve. The city should not tax more with the intent to pay for state capital projects when we have our own city facilities and infrastructure to operate and maintain. The city is paving new roads, plowing and sanding existing roads, enhancing our parks, and maintaining our water and sewer lines just fine. In fact if you recall the city increased the resident’s water and sewer rates by over 85% to cover the costs for future growth of water and sewer infrastructure. Now is not the time to tax more!

Are new taxes being considered at the state level? Yes, from recent discussions on how to handle the state fiscal crises talk of a sales tax or income tax is being discussed. Increased taxes causes increased hardship on our residents and the city is wanting to tax more when they should be looking to remain efficient and accountable with your tax dollars and not cause undue hardship on our residents.

What would the increase in sales tax go toward if passed by the voters? The mayor is proposing to have the increased sales tax revenue go to an increase of 1/3 for funding general government and 2/3 to the capital budget fund. The mayor has brought forward a wish list of over $85 million in capital projects that he wants the sales tax revenue to go toward. For a city with a population of nearly 9,000 why are we considering a wish list of capital projects of this magnitude? Many of these projects are not in our five year capital improvement plan and have not been reviewed or vetted by our city planning commission or our residents. At a time when transparency and accountability is vitally important in local government the city is proposing to build a slush fund for capital projects that will be mandated by the administration and council with little to no public input or accountability for these capital projects. This proposed tax increase will take the citizens out of the process in deciding what large projects the City should finance and provides an incentive for the City to grow government just to grow government!

Do the city businesses support this sales tax? The answer is many don’t. The businesses who testified at our public hearing for Ordinance 15-20 overwhelmingly said NO they did not support this increase in taxes and had no problem in changing their accounting system to accommodate the decrease in sales tax. In fact many said that an increase in sales tax may cause hardship for their businesses and force consumers to shop elsewhere.

The City of Wasilla in the past has prided itself on remaining a small efficient government with regard to spending your public dollars. Few cities across the state of Alaska or across the nation can say they have sunset a tax of any kind. The City of Wasilla did this in 2003 for the Menard Center and in 2013 we again proposed funding through a temporary increase in sales tax for construction of the new library. It is again a feather in our cap and true fiscal responsibility and accountability to our citizens. This sunset clause was the only reason the library funding proposal passed in 2013.

I encourage you to vote NO on ballot measure W-1. This extension of the sales tax is a 50% increase in your taxes which will go toward a slush fund to fund an $85 million wish list of capital projects and to grow general government without justification. Tell the city that a promise made should be a promise kept and sunset the sales tax.

Colleen Sullivan-Leonard is a member of the Wasilla City Council.