Wasilla voters to decide tax hike

WASILLA — Two decades of debate and planning will culminate at the ballot box Oct. 1 when city residents weigh in on whether to help fund a $16 million project to build a new Wasilla Public Library.

By a vote of 5-1, Wasilla City Council gave the go-ahead this past week a ballot question asking voters to approve a one-year, 1 percent sales tax increase that would raise an estimated $6 million for the new library. The decision comes after a year of debate about how to fund the library and other city capital projects.

In the end, the council — with the exception of Councilman A.C. “Buzz” Buswell — gave the green light to a proposal by Deputy Mayor Colleen Sullivan-Leonard for a one-year, 1 percent hike to the city’s sales tax with the money specifically earmarked for the library.

“I think it’s great,” Sullivan-Leonard said of the plan. Because it includes a fast sunset clause, “it shows true accountability to the citizens that we are asking for a 1-cent increase for just one year. We didn’t want it to be a full-time increase in the sales tax.”

A full-time increase is what Mayor Verne Rupright had proposed to the council on two occasions without success. Under his plan, half of the 1 percent tax hike would be earmarked for capital projects, beginning with the library, and the other half for the general fund.

If approved in the city’s general election Oct. 1, Wasilla’s sales tax rate would see a 50 percent increase, from 2 percent to 3 percent.

While Sullivan-Leonard’s library-only plan garnered broad support with the council, Buswell said he voted against the tax because there are too many unknowns in the equation that could put the city in a bind.

“Part of that is it doesn’t take into account that the state doesn’t have any money anymore and we may not get matching funds,” he said.

A financing plan for the new 23,500-square-foot library prepared by The Foraker Group calls for $8.157 million of the $16.315 million project to come from the state. The city has already contributed and received another $1.3 million in in-kind contributions, including about $1 million worth of land to build the library on from the Mat-Su Borough at the intersection of Swanson and Crusey streets. After accounting for about $175,000 available from previous grants, the city would be required to raise about $7 million to cover the remaining construction costs. The sales tax could generate $6 million of that, with another $679,000 to be raised through local fundraising, gifts from businesses and grants.

Asking voters to approve raising the city’s sales tax before the state has committed to fund more than $8 million is putting the cart before the horse, Buswell said.

“If that’s true that we don’t get matching funds, we may need to run that sales tax a little longer,” he said. “I think a couple council people got a little short-sighted placating the library people and I think they’re cutting their noses to spite their faces.”

Although Wasilla is in decent financial shape today, the future is more uncertain, Buswell said. That Sullivan-Leonard’s plan doesn’t include funding for the estimated $115,000 in yearly increases to operating costs at the library also is a concern, he said.

Increases to the city’s health insurance costs associated with the Affordable Care Act could squeeze Wasilla’s wallet, he said, along with expensive costs to local businesses associated with making two sales tax changes in a year.

“To change your tax rate in your computer, some of those companies have to go back to the states to get them changed,” he said. “They have contracts for their software that runs their cash registers and have to pay people to change that.”

That there won’t be money to run a new library if it’s built isn’t a valid concern, Sullivan-Leonard said.

“I know there were questions on that and some of the review we’ve seen is the increase in operating costs is about $115,000,” she said. “We have looked at the economic hardships of the past couple of years and it’s changed, and we’ve seen an increase in our sales tax (revenues). But people forget that we are, I think, a healthy city.”

As an example, the city has about $10 million in reserves in different accounts, she said, which shows Wasilla is in good financial shape to handle some extra expenses associated with a new library.

Of those expenses, the most significant increase is expected in the cost of heating and lighting the library, according to The Foraker Group’s report “Wasilla Public Library Project Development Plan.” That amounts to about $46,000 more, with janitorial costs coming in second by more than doubling with an estimated increase of $20,736. Another area of increase is in the library’s technology replacement fund, as the plan calls for the number of public use computers to rise from seven at the current 8,000-square-foot library to 43.

Something both Sullivan-Leonard and Buswell agree on regarding library funding is that it’s now in the hands of voters.

“I think people will get behind this and people will support this project,” Sullivan-Leonard said.

That may be the case, Buswell said, but he’s hopeful it fails.

“At this point, I hope the public would just vote it down and send it back to us so we can fix it,” he said.

Contact reporter Greg Johnson at greg.johnson@frontiersman.com or 352-2269.