Topic
Tax Proposals: What Residents Need to know
The Matanuska‑Susitna Borough is evaluating several tax proposals that could change how the Borough funds services like roads, schools, and emergency response.
How Decisions Are Made
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All proposals except for the gravel tax will go to the voters on a ballot.
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Gravel tax may be adopted by the Assembly.
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Community feedback plays a key role in shaping these decisions.
Areawide Sales Tax (3% Areawide, 4 Mill Cap) OR 26-082
Introduced for public hearing on August 4, 2026
This proposal would establish a 3% sales tax across the entire Borough and cap the areawide property tax rate at 4 mills. The Borough would continue to levy property taxes, but the areawide mill rate could not exceed 4 mills under Borough code.
The proposal is intended to shift a portion of the Borough's revenue source from property taxes to consumer spending. According to the Borough's financial analysis, a 3% areawide sales tax is projected to generate approximately $64.4 million annually, while a 4 mill areawide property tax would generate approximately $65.2 million, resulting in combined revenue similar to current areawide property tax collections.
| title | Description |
|---|---|
| What Is It | A 3% sales tax on taxable purchases throughout the Borough combined with a 4 mill cap on areawide property taxes |
| What it Changes | Adds a new areawide sales tax while limiting the areawide property tax rate to no more than 4 mills |
| Property Tax Impact | Areawide property taxes remain in place but would be capped at 4 mills; city, road, fire, and other service area taxes would still apply |
| Estimated Impact | Approximately $64.4 million annual sales tax revenue plus approximately $65.2 million from a 4 mill areawide property tax |
| What It Means | Shifts part of the Borough's revenue source from property ownership to consumer spending |
| How It Would Be Approved | Ballot proposition |
Areawide Sales Tax (1% and $75,000 Residential Property Tax Exemption) OR 26-072
Passed — This proposal was accepted by the Assembly at the 7/21 Regular Assembly Meeting. It will appear on the 2026 November Ballot.
This proposal introduces a $75,000 Owner-Occupied Residential Real Property Exemption and a 1% areawide sales tax. The ordinance, if approved by voters, will result in a $75,000 reduction in taxable value for each owner-occupied residential real property that has been granted after filing an application. This reduction in revenue will be offset with a 1% areawide sales tax which exempts sales within the cities.
Under this proposal, some of the tax burden shifts from owner-occupied residential property ownership to everyday spending. Based on current projections, the 1% areawide sales tax would generate approximately $21 million annually. The $75,000 property tax exemption is estimated to reduce areawide property tax revenue by approximately $12 million to $15 million, depending on participation.
| title | Description |
|---|---|
| What Is It | A sales tax on purchases across the Borough. |
| What it Changes | Adds a 1% areawide sales tax and a $75,000 reduction in taxable value for owner-occupied residential real property. |
| Estimated Tax Per Transaction | Only the first $1,000 of the price in each transaction shall be subject to sales tax. |
| Estimated Impact | Generates about $21 million annually, offsetting an estimated $12M–$15M reduction in property tax revenue |
| What It Means | Shifts more of the tax burden from property taxes to everyday spending |
| How It Would Be Approved | Ballot proposition |
Areawide Sales Tax (6.5% areawide) OR 26-032
Failed — This proposal was rejected by the Assembly at the 6/16 Regular Assembly Meeting.
This proposal would introduce a 6.5% sales tax across the entire Borough and set the areawide property tax mill rate to zero. While this removes one layer of property tax, it does not eliminate property taxes entirely, as other local mill rates would still apply, such as road services, fire service, and special service areas.
Under this proposal, more of the tax burden shifts from property ownership to everyday spending. It would generate approximately $121.4 million annually. FY2027 areawide property taxes are projected to generate approximately $129.6 million.
| title | Description |
|---|---|
| What Is It | All purchases across the Borough; added on top of existing city sales taxes minus key exemptions as outlined in the ordinance |
| What it Changes | Reduces property taxes but does not eliminate them because non-areawide, city, fire, road and special service mill rates are still in place |
| Potential Key Exemption | Seniors; 100% disabled veterans; if included in ordinance would reduce projected sales tax revenues by approximately $12 million to $26.8 million |
| Estimated Impact | Generates about $121.4 million annually. FY2027 areawide property taxes are projected to generate an estimated $129.6 million. |
| What It Means | Shifts more of the tax burden from property taxes to spending |
| How It Would Be Approved | Ballot proposition |
Gravel (Severance) Tax OR 26-058
Failed — This proposal was rejected by the Assembly at the 6/16 Regular Assembly Meeting.
This proposal would add a $0.25 per ton on gravel extraction, which would primarily affect companies involved in resource extraction. The first 150,000 tons are exempt. Would result in an estimated $956,000 revenue annually.
| Title | Description |
|---|---|
| What is it | A $0.25/ton tax on gravel extraction |
| Who It Applies To | Adds a new industry-specific tax |
| What It Changes | No direct impact on property taxes |
| Key Exemptions | First 150,000 tons per year are exempt |
| How It Would Be Approved | Assembly Adoption |
Marijuana Tax Increase OR 26-061 (Failed)
Failed — This proposal was rejected by the Assembly at the 6/02 Regular Assembly Meeting.
This proposal would increase the existing marijuana tax from 5% to 10% doubling the current rate on those sales. It would apply to marijuana purchases within the Borough. Would result in a revenue increase of $3.2 million annually.
| Title | Description |
|---|---|
| What Is It | Marijuana sales within the Borough |
| What It Changes | Raises the existing tax rate |
| Property Tax Impact | No direct impact on property taxes |
| Key Exemptions | None specified |
| How It Would Be Approved | Ballot Proposition |
Alcohol Tax (5%) OR 26-062
Passed — This proposal was accepted by the Assembly at the 6/02 Regular Assembly Meeting. It will appear on the 2026 November Ballot.
This proposal would introduce a new tax on alcoholic beverages, similar in structure to the existing marijuana tax. The rate would be set to 5%. Would result in an estimated revenue increase of $3 million to $7.5 million.
| Title | Description |
|---|---|
| What Is It | A new 5% tax on alcoholic beverages |
| Who It Applies To | Alcohol sales within the Borough |
| What It Changes | Introduces a new excise style tax |
| Property Tax Impact | No direct impact on property taxes |
| Key Exemptions | None specified |
| How It Would Be Approved | Ballot Proposition |