Mat-Su to present case for gas tax at open house events

What you need to know:

• Mat-Su Borough officials are hosting a series of open house events this fall to provide details about a proposed temporary 7-cent-per-gallon gas tax and gather public feedback ahead of a November advisory vote.
• The tax is projected to generate about $5 million annually and is intended to reduce the borough’s reliance on property taxes. It would be collected from fuel wholesalers and would exempt aviation fuel, marine fuel, home heating fuel and certain diesel users. It would sunset in 2027 unless renewed by the Assembly.
• Although the Assembly has the final say on whether the tax is implemented, members say they plan to follow the results of the advisory vote. They also intend to direct the manager to allocate half of the revenue to reducing property taxes and half to road projects, though such a directive would not be legally binding.

PALMER — Matanuska-Susitna Borough officials will use a series of open house events to present their case for a proposed temporary 7-cent-per-gallon gas tax that will go to voters for an advisory vote this fall.

The events will give officials a chance to explain what the proposed tax would mean for Mat-Su residents and why they believe it’s necessary, Borough Manager Mike Brown said in an interview last week. They will also give voters an opportunity to ask questions, he said.

The open houses will be organized like the borough’s periodic road project information sessions, with informational displays, a short presentation, and borough staff available for one-on-one questions, Brown said.

Unlike regular borough assembly meetings, the events will not include a timed public comment period, he said.

“What the open houses are for is really to just dispel rumor, answer questions and provide context for why we would even introduce a new tax,” Brown said. “This is meant to bring people in, let them mill around, give them flyers and talk to people, and then bring them together and do a presentation.”

Dates and locations of the open house events are:

• Sept. 16, 6 to 8 p.m., Butte Elementary School
• Sept. 23, 6 to 8 p.m., Willow Community Center
• Oct. 6, 6 to 8 p.m., Meadow Lakes Elementary School
• Oct. 13, 6 to 8 p.m., Knik Elementary School
• Oct. 22, 6 to 8 p.m., Mat-Su Central School
• Oct. 23, 6 to 8 p.m., Upper Susitna Community and Senior Center

The new tax proposal was initially drafted this spring and presented to the Assembly in early June. Brown said the plan is unrelated to a federal order issued last month directing the borough to repay nearly $6 million in grants used to support the Knik Arm ferry, which never operated.

Although the Assembly will have the final say on whether the tax is implemented, members plan to use the results of an upcoming ballot measure to guide their decision, they said at a meeting last month.

The advisory question set to appear on the November ballot asks voters whether they support implementing a 7-cent-per-gallon tax on all gasoline and diesel sold at pumps. If a majority vote no, Assembly members have said they will reject the proposal later this year.

The tax is intended to diversify the borough’s revenue sources beyond property taxes, its current primary income stream, Brown said. It would function as an excise tax collected from wholesalers.

Brown told the Assembly the tax could generate an estimated $5 million annually. It would likely cost the average Mat-Su driver less than $30 a year, according to federal mileage and fuel cost averages. Raising the same amount through property taxes would cost the average homeowner about $128 more per year, borough officials said.

As currently proposed, the tax would take effect Jan. 1 and expire June 30, 2027, unless the assembly reapproves it.

The tax would not apply to aviation fuel, marine fuel, or home heating fuel, according to the original proposal. Diesel sold to businesses with storage tanks for use exclusively in nonroad vehicles would also be exempt, under an update approved by the Assembly in July.

While state law prohibits the Assembly from passing an ordinance designating how gas tax revenue must be spent, members can pass a resolution directing the manager on its use.

That’s a step they plan to take if they approve the tax, Assembly members said during recent debate. They intend to instruct Brown to dedicate half of the revenue to reducing property taxes and the other half to funding road projects. Such a measure is not legally binding, but could be enforced by the Assembly changing the annual budget to reflect the direction.

-- Contact Amy Bushatz at contact@matsusentinel.com

This story was updated with a new headline Sept. 10.