Mayors want tax share scheme for future gasline

Although the proposed Alaska LNG pipeline is still a long way from reality, a state committee is working on a fiscal scheme that would compensate local governments for property taxes they would forfeit under the current agreement with gasline producers.

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The Municipal Advisory Gas Project Review Board is devising a formula to distribute more than $15 billion in anticipated state gasline taxes over a 25-year period to local governments impacted by the project.

The Matanuska-Susitna Borough would be affected greatly, and Borough mayor Vern Halter says he wants to make sure the Borough gets its fair share of the money.

“We do have 179 miles of pipeline withn the Borough. And there is going to be a separate fund too, there’s going to be an $800 million impact fund that the Department of Commerce is going to administer. I’d prefer to have direct payments to our communities. The Mat-Su Borough and even our cities are going to be impacted. You know darn well the Mat-Su Borough is going to host the greatest part of the impact along with the Fairbanks area, really, when you are building this pipeline. Because this is really the future of the Mat-Su Borough in my mind.”

Borough auditor James Wilson updated the Borough Assembly on progress on a proposed tax plan at a recent meeting. Wilson said it would be similar to a Payment in Lieu of Taxes, or PILT, plan. The state would collect the future taxes on the LNG line, and each municipality would get a share of the money based on the percentage of the gasline project within its borders. The question is, how much say would the municipalities have in assessing the impact? Halter said the an early draft of the fiscal legislation did not accurately assess the Mat-Su Borough’s fair share:

“What this legislation would do is the Mat-Su Borough would give up the right to tax a property for these payments. And it just seemed like this one was so far off base that I kind of said that I wouldn’t do this, no way.”

The review board’s plan also provides payments to municipalities based on population, regardless of any connection to the LNG line, to ensure its benefits are shared by the state as a whole. According to the state Department of Revenue’s Stephanie Alexander,  no action was taken on the draft fiscal plan at the review board’s meeting on January 15. Mayor Halter said Thursday  that the Borough has expressed it’s concerns and that draft fiscal plan will be worked on over the next weeks to more accurately reflect equitable PILT shares for each municipality.