Both the Matanuska-Susitna Borough Assembly and the School Board listened to a report from the Sales Tax Task Force last night, Dec. 12. Task Force Member Robert Hall said the consensus is the Borough needs to act. Among the suggestions: amend the tax revenue cap and, later, after all other options, ask citizens for a sales tax only as a direct offset to property taxes.
Listen to the complete audio of the discussion here. Read the memo from the Sales Tax Task Force via Borough Manager John Moosey posted here.
Hall said, "We want a revenue cap in the Borough but also want to make sure it's modern and up to date with what's going on."
He suggested amending the tax cap before the next budget deliberation in spring.
Hall said look at alternative forms of revenue before a sales tax, possibly excise taxes. Ideally, he said, include a sales tax within a revenue cap.
"If you wanted to give the voters an opportunity to reduce their property taxes, dollar for dollar, that's where the sales tax would come in," Hall said.
If you propose a sales tax, the rules must be consistent with the cities tax rules, and cities can collect tax to avoid Borough fee collection, a memo from the task force states.
Borough Mayor Vern Halter quickly defined the present tax revenue cap formula. "Our growth cannot exceed more than the Anchorage consumer price index plus the population growth."
Halter said we'll go slowly. "I already started a draft on the tax cap as a start to the process. The current formula is hard to decipher. "... put an ultimate cap on the areawide mill rate too. We have FSA (fire service area), and road mill rates that add onto the Areawide mill rate and cause people's property taxes to really skyrocket, so we have to be careful in all of those," Halter said.
Assembly Member Jim Sykes said the cap had not factored in bond debt. "If we go deeper into recession and lose population we are in a bad way from how it's structured," Sykes said.
Manager John Moosey asked the Assembly for direction at the Dec. 19 meeting. Moosey will propose alternatives on amending the revenue cap. The current revenue cap does not allow other types of revenue to grow such as an excise tax on cigarettes.
Assembly Member Dan Mayfied asked for a work session. The subject comes before the Assembly again at the Jan. 12 meeting.
Superintendent Monica Goyette said Manager Moosey and the task group did a great job.