Borough Interest on Debt Service to Cost 67 Million Over 20 Years

Earlier this year, the Mat-Su Borough Assembly floated the idea of paying for certain debt services through a proposed seven-cent gas tax and put it on the ballot. Borough residents overwhelmingly opposed the tax in an advisory vote during this year’s elections.

The public was welcomed at several open houses prior to the elections to discuss the proposed gas tax and debt service. While there were concerns about the gas tax, Borough Manager Mike Brown says people did understand the issues with debt service.

“I think there were folks that recognized that putting all of our services on the backs of property tax payers for the most part is not a great long term solution.”

According to a table prepared for the Mayor and Assembly, the interest on this year’s $20 million principal payment will be about $9 million. 

Collectively, over the next 20 years, the Borough will have spent $67 million in interest alone for the debt service. Debt service is used to pay for larger projects for education, transportation, and parks and recreation.

Though residents are against the gas tax, other ideas have been proposed, like taxes on marijuana, area-wide sales, alcohol, and bed taxes.

“Most of them are some form of sales tax. All sales tax options require voter approval so it’s not something the Assembly can enact on their own.” 

The Borough is the fastest growing area of the State with a need to maintain existing infrastructure and to build new facilities. Both are currently paid with borrowed money.