Last year, the Matanuska Susitna Borough voted to become the first governmental entity in the state to allow lifetime registration for cars eight years old or older. But, this week, Borough Assemblymembers admitted that it could be a mistake.
In October of last year, the Mat Su Borough Assembly voted to put a new state law into practice. With the payment of a small fee, Borough residents with cars eight years old or older, would have the option of registering the car, or a non-commercially used trailer, one time for the lifetime of the vehicle. Sponsors of the move said it is designed to help people save money. The state law went into effect January first of this year, as did the Borough code. But that was before the devastating fiscal effects of the oil price slide were apparent. And before a scramble for more revenue sources.
Fast forward to this week, when Mat Su Assemblyman Jim Sykes put a motion to rescind on the table.
“We are getting about 2.4 million dollars a year from the motor vehicle and trailer registration. And so, what’s happening under our current law that allows permanent registration, this is going to gradually decrease, through a number of machinations, it is going to decrease to next to nothing. It’s going down, so over a period of time, we don’t know exactly when the funds are going to run out, it could be 2022, or 2024, but very little money by then will be collected. After about three years, the major portion of it is gone, ” Sykes told the Mat Su Assembly.
The law as it stands now, allows Borough residents with qualifying vehicles to pay a 25 dollar tax to the borough on top of the standard state registration fee at the time of renewal and that pays for the vehicle for life. The Borough already collects a 70 dollar road tax on vehicles 8 years old or older at the time of registration, and that money is distributed to the Borough’s road service areas. And that is the rub. Sykes says the RSA’s will be getting less and less money due to the lifetime registration option.
“This road maintenance fund, once it gets down toward the bottom, it’s going to lose over $2 million a year. And so the permanent registrations, if the law sunsets, as it is set to do now in 2018, it’s not that it is going to start going back up, because remember, these vehicles were registered permanently, so as long as people drive them, they won’t be registered again. So it will rise, but it won’t go up to the same level it was, until people buy new cars.”
Sykes says road maintenance is a major concern in the Borough. And if the RSA’s don’t have enough money, they will rely on the Borough for more money, and that money will come from Borough property tax payers.
Sykes offered an amendment to his own motion that would exempt non-commercial trailers from the repeal. That was approved by the Assembly.
Assemblyman Vern Halter agreed the drop in revenues to the RSAs would cause the mil rate in those areas to go up. But Assemblymember Steve Colligan wants to know just how much money goes to the RSA’s and how it’s used before a decision is made. Colligan says a good portion of the auto fees go into the Borough’s general fund.
Sykes says that if the law is rescinded, the Borough can gain $ 2.4 million , or about $ .2 million less than that if the trailers are allowed to be permanently registered. Not a lot of money he admitted, but,
“What I am saying is, we are in a fairly permanent downhill slope in terms of the revenue coming to the Borough. And we are in a fairly permanent slope of rising and fixed costs that we are not collecting. The difference is getting greater every year. ”
Sykes’ motion would restore the registration program to the way it was in 2014. The Assembly could not agree on the main motion, and the item was postponed until August. 4