Mat-Su residents to cast ‘advisory vote’ on proposed borough gas tax

What you need to know: 

• An advisory measure headed to Mat-Su ballots in November asks voters whether they support a new 7-cent-per-gallon borough fuel tax aimed at reducing property taxes and funding road projects.
• The tax is proposed as an excise tax against wholesalers rather than a sales tax at the pump. The vote is advisory only because excise taxes don’t require voter approval. The Assembly will make a final decision in December, using the ballot results to gauge public support, they said.
• The proposed tax would exclude aviation fuel, marine fuel, home heating fuel, and diesel sold to certain businesses with their own storage tanks. It would start on January 1, 2026, and expire in mid-2027 unless renewed.  

PALMER — Whether Mat-Su should levy a new fuel tax will head to ballots for an advisory vote in November under a measure approved by the Matanuska-Susitna Borough Assembly this week.

The ballot question will ask voters whether they support a proposal to implement a 7-cent-per-gallon excise tax on fuel, charged to wholesalers. Half of the revenue would be dedicated to reducing borough property taxes, and the other half to funding borough road projects.

After voters weigh in, the proposal will return to the Assembly in December for a final decision, according to a separate measure approved Tuesday.   

The advisory ballot question does not bind the Assembly to take specific action. It is framed as a sense of the voters rather than a yes-no vote because excise taxes do not require voter approval, Borough Manager Mike Brown said in an interview Tuesday.

The Assembly approved the ballot question in a 5-2 vote during its regular meeting on Tuesday, with Assembly members Dmitri Fonov and Tim Hale voting no. It will appear on ballots as part of the general election scheduled for Nov. 4. 

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

The tax would apply to all fuel sold at gas stations. It would exclude aviation fuel, marine fuel, home heating fuel, and diesel sold to certain businesses with their own storage tanks.

The proposed tax is intended to help fund road improvements and pay down debt without relying on property tax revenue, according to a borough fact sheet.

Sending the question to voters allows the Assembly to better gauge public support, said Assembly member Stephanie Nowers, who introduced the ballot question.

“I come back to letting people make the choice, because you can do the calculation yourself and decide if you're willing to let government do another type of tax,” she said. “It's a choice, and I want to hear from the voters on it.”

Dozens of residents attended Tuesday’s meeting, with some members of the public becoming rowdy during the debate because they did not understand what the Assembly was proposing or the ballot question under consideration, they said. Mayor Edna DeVries ruled those individuals out of order and declined to answer public questions during the discussion.

About two dozen residents testified against the tax proposal following the Assembly vote to place it on the ballot, with two testifying in support. 

The proposed tax could bring in about $5 million annually from both borough residents and other drivers passing through the region, borough officials said.

Raising that $5 million through property taxes would cost average borough homeowners about $128 in additional payments, they said.

As proposed, the fuel tax would cost the average Alaskan driver an additional $28.81 per year at the pump, based on the average number of miles traveled by residents annually and the current average U.S. vehicle fuel economy of 27 miles per gallon, according to Federal Highway Administration and Environmental Protection Agency data. 

-- Contact Amy Bushatz at contact@matsusentinel.com