Amid local tax debate, munis urge legislative action
Some municipalities around the state are looking at increasing taxes-- which could come on top of a statewide tax-- if Gov. Bill Walker has his way in a special session next month.
The City of Wasilla is one example. Its 2 percent sales tax could jump as high as 6 percent under city and borough proposals. Local officials say that's because it's getting less help from the state.
Tucked in a valley away from the big city vibe, things are more expensive in Wasilla. And soon, they may get even pricier. Because the state has a multi-billion dollar budget problem, Mayor Bert Cottle says Wasilla is now having to pick up the tab on checks the legislature used to write.
"I mean, somebody's going to pay for government on some level. It's just, how do you collect the money and who collects the money?" Cottle said Friday.
One example? Wasilla roads, Cottle says.
"We've picked up seven additional miles of roads that, at one time, were covered by state maintenance. And so my maintenance costs went up $15,000 per mile by picking up the state roads. That doesn’t count replacement," Cottle said. "It can run between $500,000 to $1 million per mile to replace them roads. Where are we going to come up with that kind of money?"
Some municipalities say they're having to tax Alaskans because the legislature won't.
"You're never popular when you raise taxes, we know that. But, we have to do it and we've always felt that the legislature needs to step out and do the same thing," said Kathie Wasserman, executive director of the Alaska Municipal League.
Next month, Gov. Bill Walker hopes the legislature will. He's sending lawmakers back to Juneau to take up the topic.
But, some in the Senate say a statewide tax, on top of local ones, could make a bad situation worse.
"When you take money from the private sector in the form of an income tax, there is less money for people to expand their businesses, to invest in assets, to pay for college," said Sen. Natasha Von Imhof (R-Anchorage).
"Alaskans-- just-- I do not believe are prepared for the taxation that would be required close this gap. I just think it's not the right step forward," agreed Sen. Anna Mackinnon, co-chair of the Senate Finance Committee.
For his part, Mayor Cottle is siding with the governor.
"I want them to go down to Juneau and settle and fix the budget crisis, okay? Come out with a balanced budget, quit spending our reserves," Cottle said.
Across Alaska, the reserves are dwindling-- both for the state and cities.
The debate over the increase in sales tax in Wasilla isn't over yet. Mayor Cottle says it's slated to pick up again in December.
Walker hasn't officially announced a special session but, in a letter to lawmakers earlier this month, he told them to prepare for one starting October 23.