Talkeetna sales tax proposal raises questions

On October 3^rd, Talkeetnans registered to vote inside the Talkeetna Sewer and Water District will decide whether or not to institute a three-percent, year-round sales tax to fund the system.

The system has run at a deficit for years, though the amount of annual deficit growth has slowed in the wake of successive rate hikes. Rates have gone up by twenty-five percent in each of the last two years. According to the Mat-Su Borough’s most recent budget, the current deficit of the system is just over half-a-million dollars for the current fiscal year.

The proposed sales tax has come with many questions from area residents and business owners. The first, and perhaps most important, is how much the tax will raise in revenue. That is also the most difficult question to answer. Without a tax in place, the Mat-Su Borough has no direct means of assessing taxable sales in the area. Critics of the tax proposal say this means there’s no way of knowing if the tax would achieve its stated goal of increasing revenue and building a reserve for the future.

Critics also point out that the owners of many businesses inside the district will not be able to vote, since their residences are outside of Downtown and East Talkeetna.  It is true that only people whose residence is inside the district on their voter registration will be allowed to vote on the proposal.

Another significant question is how much the borough would withhold from the tax in administrative fees. According to Mat-Su Borough Finance Director Cheyenne Heindel, it would cost $10,000 from collected revenue to administer the proposed tax. Assembly Member Randall Kowalke says that cost would be assessed annually.

Initially, a lower, seasonal tax was considered. Kowalke says it was changed to a year-round tax in order to capitalize on the increasing amount of off-season commerce.

After recently mistakenly mailing postcards to some voters eligible for the October 3^rd election, the Mat-Su Borough has sent a new round of collected mailers. In addition, the borough has posted a map of the areas included in the Talkeetna Sewer and Water District.