Next Tuesday, the Mat-Su Borough Assembly will hold a regular meeting for the first time since June. One ordinance that is scheduled for introduction next Tuesday would eliminate recurring registration for older vehicles. While that could mean less out-of-pocket expense for some drivers, KTNA’s Phillip Manning found that it could also come with trade-offs.
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The ordinance, sponsored by Assembly Member Jim Colver, takes advantage of a new state law that gives municipalities the option to allow permanent registration of vehicles that are more than eight years old. Under the proposed system, owners would have to register the vehicle one last time and pay a $25 fee to the state, but would then be exempt from state or borough registration fees as long as the vehicle did not change ownership.
While that could mean a significant convenience for many borough residents, it’s not without a potential cost in the form of lost revenue. According to the borough’s estimates, it could mean a total loss of more than $2.4 million in revenue by fiscal year 2018. According to Terry Dolan, Public Works Director for the borough, dust control is a major part of what the registration fees cover.
“It’s used for matching for the cost of acquiring and applying dust control materials.”
In Talkeetna, Trapper Creek, and Caswell, the loss to road service areas would be nearly $45,000 in matching funds. When Willow is included, the number jumps to $73,000 in lost funds. Those numbers do not take into account the hit to borough-wide dust control funding, which could lose almost $475,000.
Terry Dolan says he has not yet seen the fiscal note, so could not go into detail, but he says that, if the revenue cuts do happen, it could mean a significant decline in the dust control services the borough pays for. Dolan says that if borough residents wanted that funding restored after the cuts took effect, the most apparent option would be an increase in property taxes.
“Later on, if the community decides they would like to have those kinds of monies available to do that kind of work, then they would have to raise the mill rate in order to replace that revenue.”
Terry Dolan says there is no emotion in his consideration of the proposed ordinance. He says the decision is up to the Assembly, and borough staff will follow their direction.
“As much as I think having these funds available benefits people in the borough, certainly it’s a cost to them as well. Exactly where that money comes from, that’s one of the things the Assembly worries about and decides. This is a normal process, and I think this is a good opportunity for the public to provide input on it. Some people are going to really like this, and some people are going to hate it.”
Tammy Clayton, Finance Director for the borough, says that the cuts would go beyond just dust control. Clayton says that the majority of state vehicle registration fees end up coming back to the borough, and that’s the reason for the high potential cost. She says that the funding that is broken down by road service area is the result of loss of revenue that would pass through the state, then on to the borough, potentially impacting other maintenance activities.
In addition to road funding, the Caswell, Willow, and Talkeetna fire service areas could stand to lose a combined amount of more than $11,000 dollars. Borough Emergency Services Director Dennis Brodigan says the final impact isn’t known, but any hits to FSAs outside of the Core Area of the Valley hurt more than cuts to departments like Wasilla Lakes, for which the vehicle registration tax makes up a smaller portion of the total budget. Brodigan says that Upper Valley service areas often come close to just breaking even, leaving little to put away for repair and replacement funding for equipment and facilities.
Assembly Member Matthew Beck says that there might be other ways of raising the lost revenue, and that increasing the mill rate is just one of them.
“We’re a pretty creative borough, so what this would do is challenge us to be creative–finding money to find money from other sources. I can’t say exactly what those sources might be. That’s something we’d have to discuss and look at.”
Matthew Beck also says he has not yet made up his mind on the ordinance, and acknowledges that a potential loss of services could impact how borough residents feel about it.
“That could change their mind completely, so I do look forward to the debate, the public comments, and the people who reach out…”
According to the Alaska Dispatch-News, Assembly Member Jim Colver is not overly concerned by the fiscal note. He says he believes that continued population growth and residents buying newer cars will help offset the lost revenue. The ordinance is scheduled for introduction next Tuesday. It will then be subject to a public hearing and a final vote at the August 26th Borough Assembly meeting.
