Mat-Su Voters Will Decide On Alcohol Tax Proposition

Matanuska Susitna Borough voters will consider an alcohol tax proposition on the Oct. 1 election ballot. The 5 percent tax would be used to offset the burden on Borough property owners, but opponents of the plan say it unfairly targets a specific industry.

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The ballot wording of Proposition B1 is simple.

“Shall the Matanuska-Susitna Borough enact an areawide alcoholic beverage tax not to exceed 5 percent on sales of alcoholic beverages within the Borough? “

Voters only need to check a Yes or a No answer.

 The issue itself is far more complicated. The proposed alcohol tax was introduced in June by Mat Su Borough Assemblyman Steve Colligan. After public hearings, it was approved as a ballot initiative in July. Colligan says he simply wants to reduce the tax obligation on Borough  property owners, who now foot the bill for most of the Borough’s expenses. Assemblyman Steve Colligan

..” not a big fan of new taxes. I’ve had people call me about sin taxes, etc. This is a sales tax on alcohol to offset costs that are currently being paid by property owners. And, to me, it’s pure and simple. Why should property owners be bearing the full burden. We’ll see how the public reacts and go from there. “

 But the 24-page ordinance covers a lot of ground.  Purveyors of alcohol must apply for and receive a non- transferable certificate of registration from the Borough, which is revocable by the Borough.  Sellers must collect the tax at the time of sale and hold it for the Borough. The Borough director of finance may conduct audits or investigations into a seller’s tax receipts. Violations of the ordinance can result in a 500 dollar fine and revocation of the seller’s certificate and a prohibition against further alcohol sales.  Reports on sales and taxes are to be submitted to the Borough monthly, and sellers need to keep records for six years.  The Borough director of finance is charged with collecting the tax and keeping tabs on alcohol sellers.

 Duane Hart, owner of Knik Kountry Liqour, a privately owned company with several outlets in the Valley, calls the proposition “unfortunate” , but would not go on record for this story.  Hart says similar alcohol tax initiatives have failed in the Kenai Peninsula Borough and in Anchorage.

The Alaska Academy of Family Physicians, and the Mat-Su Health Foundation have jumped on board in support of Prop B-1, citing  health reasons.  Mat Su Health Foundation executive director Elizabeth Ripley says her organization has completed a community based health indicator survey:

..”and alcohol and substance abuse was ranked the number one issue, in 23 community meetings. It was ranked number one or number two 83 percent of the time. So we have this mandate from our community. Our business community, our medical community, our youth, our education community all ranked alcohol and substance abuse as the number one issue in Mat Su.”

 Ripley says  state taxes on alcohol have reduced alcohol – related mortality rates.  She says studies show that alcohol taxes have reduced the probability and frequency of child abuse, domestic violence and sexual abuse.   But critics of thetax say there is little in the proposed ordinance’s language to indicate how the tax revenue will be spent.  The only specific mention indicates the revenues will go into the Borough’s general fund, to be spent on education and areawide emergency services.

 Alaska’s Cabaret, Hotel and Restaurant and Retailer’s Association, or CHARR represents more than 600 members statewide. CHARR president Dale Fox, says the real problem with Prop B1 is not that it poses a threat to club owners beyond the Borough’s borders, but that there is no assurance that the tax revenues from liquor will be well spent:

“Because all of the money goes to the general fund, and the politicians can spend it any way they want to. If the Mat Su voters are liberal enough to arbitrarily tax a segment of the society to raise government spending, if that’s what they want, then they should vote in favor of this. If not, they should vote no.”

 Opponents of Prop B1 also say the proposed ordinance would not only lead to higher prices for consumers, but would add to records keeping burdens for sellers. Not so, Colligan says. He says it’s no different from other sales taxes, now already the norm in Palmer and Wasilla

“Most revenue will come from probably within the city limits where most of the activity is, and in that case it will only be about two percent. It’ll be the difference of the current sales tax and 5 percent. They are already collecting sales tax, so I don’t think that will be an additional issue. Outside of that area, outside the city boundaries, they will have to at the cash register, just like any other business, adjust to collect sales tax. “

 Assemblyman Colligan says the fairest tax of all is a consumption tax.  He says the Borough will have to cut services unless more revenue sources can be found. Now it’s up to Valley voters to decide.

Mat Su Borough voters go to the polls on Tuesday, October 1 to vote on Prop B1, a transportation initiative and on two Borough Assembly seats.