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Demboski pushes Anchorage Assembly to drop registration fees for old vehicles

  • Author: Devin Kelly
  • Updated: September 28, 2016
  • Published November 19, 2014

Assembly member Amy Demboski is trying to make Anchorage the second municipality in Alaska to get rid of registration fees for old vehicles and trailers.

Demboski introduced a proposal at Tuesday's Assembly meeting that would opt Anchorage into a statewide program to waive biennial registration taxes and fees for owners of noncommercial trailers or vehicles that are at least 8 years old.

"The purpose is to eliminate needless re-registrations of personal-use vehicles, lower registration costs and create efficiencies within DMV," Demboski wrote in a memo accompanying the proposal.

In Anchorage, those re-registration taxes and fees add up to $170 -- a $100 state tax and a $70 municipal tax, according to Amy Erickson, statewide director of the Division of Motor Vehicles. Through the statewide program, the owner of an old vehicle or trailer would pay a final biennial registration fee and a $25 fee for lifetime registration.

At the end of October, the Matanuska-Susitna Borough became the first municipality in Alaska to join the program, which was created through a bill originally sponsored by Rep. Bill Stolze of Chugiak.

The bill, based on a Montana law, will take effect in January, and municipalities have to opt in.

Demboski's push to adopt the policy is a direct challenge to Anchorage Mayor Dan Sullivan, who says lifetime registration would translate into a $6 million annual revenue hit for the city by the third year of implementation and shift the burden to property tax payers.

Nearly two-thirds of all vehicles in the municipality would be exempt from taxes and fees under the policy, Sullivan said in an interview Tuesday.

"You can't literally do that without affecting police and fire and other critical services," Sullivan said. "Or property taxes get raised by $6 million. I don't think either of those are really good choices."

He said older vehicles contribute to wear on the roads, and it's the municipality's position that owners should bear the cost of maintenance and repair. Revenue generated through registration taxes and fees goes into the municipality's general fund, which in turn helps pay for capital improvements like road maintenance.

Assembly member Dick Traini also said Tuesday he's opposed to Demboski's proposal.

"I know why she wants to do it," Traini said, "but the numbers don't justify it."

Demboski, who has announced she is running for mayor in 2015, countered Sullivan's warnings of revenue impacts by saying the administration has a "spending problem."

Demboski also dismissed warnings of cuts to police and fire services as "scare tactics."

Sullivan pointed out Tuesday that this year's budget is about $5 million lower than last year's.

If adopted, the measure would take effect Jan. 1, 2017. Assembly member Bill Evans of South Anchorage, who co-sponsored the measure, said the delayed implementation will give the municipality time to take the multimilllion-dollar revenue loss into account.

"Really, the main thing for me is simply the fact that there's been no justification for this other than as a means of raising money," Evans said.

He did acknowledge that the municipality would have to find a way to balance the budget as as result of lost revenue, such as reducing overall spending.

The Assembly will hold a public hearing on the proposal Dec. 2.

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