Proposed Borough Fuel Tax Could Fund Local Road Projects

At this week’s Assembly meeting, Mat-Su Borough Manager Mike Brown introduced a proposed fuel excise tax that could provide an alternative to bonds for road projects. 

Brown says big projects traditionally have been designated as an “area-wide proposition.” Borough residents vote on whether to seek bond funding for those projects, which then spreads that cost out over a broader tax base. 

“That’s a reasonable strategy. The challenge is then you bond that and you pass that cost over 20 years. It begins to aggregate over time to a point where you’re like how sustainable does this become in the long term?”

Many Borough roads are not maintained and Brown says that’s a concern for residents, particularly in the more rural areas.

“Why am I paying an RSA tax when I’m on a road that you won’t maintain? And so I think there is an opportunity potentially with another revenue source to talk about how do we start to chip away at that problem.”  

Brown says it’s a problem that won’t be solved quickly, but it’s one that’s not being solved at all right now. Residents would still have to vote on area-wide projects to use this new revenue source, but it would be a reduced bond request or in some cases, he hopes, no bond needed at all.

The proposed seven cent tax would apply to gasoline and diesel purchases, but other fuels may be exempted.

“It does exclude aviation, marine, and home heating fuel and I think home heating fuel could be a consideration outside the core area.”

A public hearing is scheduled for the July 15th Borough Assembly meeting, where the public is invited to make comments.

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