Assembly votes down gas tax, but a sales tax proposal could be coming soon

What you need to know:

• The Mat-Su Assembly unanimously rejected a proposed 7-cent-per-gallon fuel tax after voters opposed it in an advisory election last month, ending months of debate
• Assembly member Michael Bowles is drafting a ballot measure that would ask voters to replace the borough’s property tax with a 7% sales tax — a move he says would shift the burden of funding local services from property owners to all consumers.
• Bowles plans to introduce the measure in time for next fall’s election and is working with borough staff to ensure it meets legal requirements.

• Short on time but need the local news scoop? Get free weekly news in your inbox for Mat-Su, from Mat-Su.

PALMER — The Matanuska-Susitna Borough Assembly voted unanimously this week to reject a 7-cent-per-gallon fuel tax, ending six months of heated debate on the issue — but a new sales tax proposal may be on the table next year.

The assembly voted down the fuel tax proposal Tuesday after residents soundly rejected it in last month’s election. 

And while Borough Manager Mike Brown said he has no plans to introduce additional taxes or alternative revenue measures, a proposed sweeping tax update could be coming from a newly elected Assembly member.

Assembly member Michael Bowles said he is drafting a ballot measure proposal that would ask voters whether to repeal the region’s property tax and replace it with a 7% sales tax.

Such a change would shift the burden of funding essential borough services, including roads and schools, from property owners and renters to all consumers, including tourists, he said.

“We’re spreading this burden across everybody who steps foot in the borough,” Bowles said in an interview Tuesday. “That will actually relieve the tax burden on the residents and spread it across, because we do get a lot of tourism.”

Palmer, Wasilla and Houston currently collect voter-approved sales taxes, but the Mat-Su Borough does not. 

Bowles said he envisions his proposal aligning with the cities’ existing taxes to create a combined 7% rate across the board. For example, shoppers in Wasilla would pay the city’s 2.5% sales tax plus a new 4.5% borough tax, he said.

The Anchorage Assembly is considering a 3% sales tax ballot measure proposed by Mayor Suzanne LaFrance. If placed on the ballot and approved by voters, revenue from the tax would replace some, but not all, city property tax collections.

Bowles said he is working with the borough attorney to ensure his proposal meets legal standards. He does not have a specific timeframe for introducing the proposal, but hopes to place it on ballots next fall.

Bowles was elected in November and represents District 1, which includes Butte and Sutton.

The 7-cent-per-gallon fuel tax was first introduced to the Assembly in June as a way to fund borough road projects without relying solely on property tax revenue.

Voters rejected the idea 9,175 to 4,140 last month in an advisory vote requested by the Assembly. But because the proposal originated with the Assembly, final approval remained in its hands.

Assembly members did not participate in further debate or discuss the fuel tax before voting it down Tuesday.

“I think we spent a lot of time on this, and the voters have given us their opinion,” Assembly member Maxwell Sumner said. “It’s a resounding no. So we shouldn’t belabor the point or spend any more time on it.”

-- Contact Amy Bushatz at contact@matsusentinel.com

This story was updated Dec. 3 to correct a typo in a section about the Wasilla and proposed Mat-Su Borough sales tax.