Anchorage drivers are paying more at the pump. The city's new 10 cents a gallon gas tax took effect Thursday morning. The city estimates the tax will raise $14 million a year.

Mayor Ethan Berkowitz said the money will be used to offset property taxes.

"Property owners who are currently bearing the lion's share of the tax responsibility in Anchorage are going to see relief as a result of this," Berkowitz said Thursday afternoon.

Berkowitz said the average homeowner in Anchorage would see a reduction of $130 in property taxes in 2018 as a result of the tax. The average driver would pay about $43 more.

At Clines Tesoro on Thursday, many customers hadn't heard about the tax and just as many were skeptical. Owner Rich Cline said the tax might be enough to send some customers away.

"There's no tax being put on Wasilla people so they will probably fill up their tank in Wasilla," said Cline.

In fact, both Wasilla and Palmer have a sales tax that applies to gas. In the Valley, the 3 percent tax fluctuates with the price of gas, whereas Anchorage's tax is flat.

Berkowitz said 20 percent of the tax will be paid for by people who don't live in Anchorage but are using city services including tourists and commuters.

"There are approximately 30 to 40,000 commuters on a regular basis who come into Anchorage and don't currently contribute to the services they receive," said Berkowitz. "And this is one way that those individuals will contribute."

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