WASILLA -- Borough voters will be asked to decide Tuesday if they want lower property taxes bad enough to pay a tax every time they buy something.

The tax measure combines a borough-wide sales tax with a cap on how high the Assembly can set its property tax rate. The measure includes a 3-percent sales tax on up to $1,000 -- so a shopper would pay $30 on a $1,000 computer. But that rate applies only if they bought it outside the city limits of Wasilla, Palmer or Houston.

Inside those cities shoppers would pay city sales tax in addition to the new borough tax. Wasilla currently has a 2.5-percent tax, Palmer 3-percent and Houston 2-percent.

In exchange for paying sales tax, property owners would get a 7.3-mill cap on property taxes. Borough residents now pay 9.98 mills, or $998 per $100,000 of property, as valued by the borough assessment division. The cap would limit that bill to $730 per $100,000. On the average home, which the borough says is valued at $209,000, the savings would be $561 a year.

On top of the tax cap, the borough Assembly added a $20,000 markdown on assessed property value, a perk that applies only to a person's primary residence. With the rebate, that $209,000 home would be considered a $189,000 home for tax purposes. Coupled with the tax cap, the savings adds up to $706. Fire and road service area taxes would not fall under the tax cap.

If passed the sales tax and property tax cap will end in 2014 unless voters agree to make it permanent.

Opponents of the measure say it adds taxes and hits low-income residents -- seniors and renters -- hardest. Any initial savings seen by the property tax cap would disappear when property assessments rise. Borough mayor Talis Colberg vetoed the measure in August for those reasons. The assembly overturned his veto.

"Even for the large property owner, the savings aren't necessarily long-term because there's no cap on assessments," Colberg said. "You can't make something revenue neutral without having someone else (who isn't currently paying taxes) pay for it."

The "someone" in this case will be tourists passing through, senior citizens who already get a tax break on their home and renters and other people who don't pay property tax. Opponents say for those people, particularly seniors living on fixed incomes, a sales tax would squeeze an already tight budget.

"They would not be able to stay in their own home if their expenses were raised by $60 a month," said Jennie Bettine, an organizer of the Conservative Patriots Group ballot initiative, a group that organized to oppose the sales tax measure. (She and her husband, Frank Bettine, are not related to Assemblywoman Cindy Bettine, who sponsored the sales tax.)

Bettine said the measure will mean added costs -- borough employees to implement the tax, a new computer system and audits. Businesses that don't comply would face fines.

"It is not tax-neutral, it is not going to save anyone money. It's going to cost more," she said. "The more layers of taxes you put on the people, the more tax they have to pay."

The people involved in the Conservative Patriots Group ballot initiative and a separate CPG political action committee have also led Wasilla Tea Party events.

The $60 per month estimate Bettine gave is a little higher than what borough officials believe the average household will pay. Borough economic development director Dave Hanson in July estimated the average household buys about $20,000 of taxable goods a year. That adds up to about $600 in taxes or $50 a month.

Colberg said those estimates are part of the problem. With a property tax, residents know exactly what they pay. With a sales tax, it's difficult to keep tabs, he said.

Jesse Tanner, chairman of Citizens for Property Tax Relief said spreading the tax burden makes sense; property owners have been footing the bill for borough services for too long. As the borough continues to grow, the tax burden on property owners will increase, he said. Property taxes currently bring in 74 percent of the revenue for general borough operations.

"This isn't necessarily a vote for today. Think forward six years ... there are people continuing to pour ... into our area. The tax burden is only going to grow," Tanner said. "What's going to happen if this doesn't pass is mill rates are going to go through the roof."

Tanner is a real estate agent and works in the office of his mother, Kristen Cole, a prominent Valley real estate agent. He said he worries the increased cost of providing services will drive property taxes so high Mat-Su will no longer have low-cost homes.

"If property tax takes away the incentive for people to come out from Anchorage and buy, that's a problem," he said.

The flip side is small business owners' fear that people will drive to Anchorage to shop -- or that commuters will shop there before driving home after work -- instead of spending their paychecks locally.

Hanson, in his paper, stated other areas where sales taxes are put into effect report seeing temporary dips in sales. But things level out again when residents realize they save little in time or money by driving farther than a few miles to buy untaxed goods, Hanson stated.

The sales tax measure will be the sixth to appear on Mat-Su ballots since 1991.

Find Daily News reporter Rindi White online at adn.com/contact/rwhite or call her at 352-6709.

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