WASILLA -- Valley voters smacked down a proposal to add a 5 percent sales tax to the cost of alcoholic beverages in the Mat-Su Borough.
Pitched by the Mat-Su Assembly as a way to offset the reliance on property taxes, Proposition No. B-1 would have enacted a borough-wide 5 percent tax on alcoholic beverages. Any revenues would go into the borough's general areawide budget to fund education and emergency services provided the Assembly approved every year.
Hike the price of alcohol to do it?
"It's just tax after tax after tax," said John Twelvetrees, visiting with friends over a cup of coffee around noon Wednesday in Fishhook Bar near Hatcher Pass.
If approved, the tax was forecast to bring in as much as $1 million annually, borough officials say.
Elizabeth Ripley, executive director of tax supporter Mat-Su Health Foundation, expressed disappointment at Tuesday's results but said the nonprofit plans to continue the "dialogue to address the social costs of alcohol and substance abuse" in the Valley.
"Our community was very clear, very anti-tax, very anti-government," Ripley said. "They voted where they stand. We have an ongoing commitment to meet our community where they are ... This clearly wasn't the mechanism."
Dale Fox, president and executive director of the Alaska Cabaret, Hotel, Restaurant & Retailer's Association, was out of the office Wednesday and not available for comment. CHARR was the leading opponent of the tax.
The loss of future alcohol tax revenues doesn't change anything for the borough, officials there say, but it ramps up the pressure to find new revenue streams.
Had the tax passed, the Assembly could have lowered property taxes or spent the additional money on programs including the Mat-Su Borough School District or emergency services, said Steve Colligan, a borough assembly member from Wasilla who helped get the measure on the ballot.
"It's just whether we're going to cover those fees 100 percent from the property owner or is the public interested in funding those things through a consumption tax?" he said.
He said there are no plans to increase property taxes even as school costs -- 80 percent of property tax spending -- continue to rise.
"That's the thing I see on the horizon -- the squeezing is going to come down to them," Colligan said. "We're not going to go above the tax cap."
For every vote in favor of the proposition, there were two votes against it, according to unofficial election results tallied Tuesday night. In real numbers, more than 6,200 voted against the tax compared to more than 3,500 for it. That doesn't include absentee and questioned ballots.
Some borough precincts defeated the tax by a wide margin: Willow, Meadow Lakes, the Butte, Wasilla and Big Lake. No precinct passed it, though it got relatively close in precincts in Palmer, Lazy Mountain and Sheep Mountain.
The rousing defeat came despite a $50,000 advertising campaign created for the Mat-Su Health Foundation by a Washington state advertising firm
Foundation officials touted the benefits of the tax to reduce underage drinking and alcohol-related mortality as well as offset emergency costs. But it was paying for emergency services that dominated the Foundation's get-out-the-vote blitz in the last the week or so.
That campaign featured glossy mailers with photos of residents and the headline, "SUPPORT EMERGENCY SERVICES." The mailer said "Vote Yes," but the words "alcohol tax" appeared only in fine print at the bottom.
State law bans the borough from dedicating funds to anything but its areawide fund. The fund does pay for emergency services, but the lion's share goes to education. Areawide funds also pay for parks and recreation; computer technicians; attorney costs; and administrative spending.
The mailers put off some who questioned the emphasis on emergency services.
If it really "did some good," he might support a 5 percent tax, said Jim Byers, sitting with Twelvetrees at Fishhook Bar Wednesday. "But they come out with that phony ad about EMS. They're funded every year."
Ron Michelson of Wasilla said he supported the alcohol tax. He and his wife had a suspected drunken driver plow into their living room. But Michelson said he also liked the property tax offset piece.
"I normally wouldn't vote for a tax," he said. "But if it's not that tax, then they'll try to go after us for something else."
The Mat-Su Health Foundation wasn't the only big spender in the race.
CHARR answered the foundation's advertising buy dollar for dollar. Officials there said they spent $50,000 with Anchorage public relations firm Hackney & Hackney. Anti-tax posters and flyers appeared in local liquor stores and bars.
Reach Zaz Hollander at firstname.lastname@example.org or 257-4317.
By ZAZ HOLLANDER