Matanuska-Susitna Borough, AK

TischlerBise completed a fiscal impact analysis for the Matanuska-Susitna Borough that evaluated the fiscal impact of development under the current growth trend in the core and non-core areas and analyzed the impact of Ordinance Serial No. 05-130, limiting the annual increase of the tax levy. The core area was defined as the unincorporated council areas of Tanaina, Gateway, North Lakes, Glen, Farm Loop, Colony as well as portions of Knik and Meadow Lakes. The remainder of the Borough was referred to as the non-core area.

Our analysis found the costs of providing services to the areas outpace the revenues generated by new development in the Area Wide General Fund, Non Area Wide Fund, Road Service Areas and Special Service Areas throughout the 20-year analysis period. This finding was not surprising given the Area Wide General and Non Area Wide Funds were balanced through the utilization of Fund Balance and cost recovery transfers from other Funds in FY2006, and the Borough’s revenue structure is heavily dependent on ad valorem (property) tax. Property tax comprised approximately 66% of total growth-related operating revenue. The Borough also relied heavily on State and Federal grants for a large portion of its revenues. However, many State and Federal sources had been facing multi-million dollar cuts in recent years. As such, State and Federal grants were not considered growth-related revenues, as they cannot be directly attributed to new development in the Borough. To the extent grant revenue declines in the future, the Borough would have to fund the difference through general revenue in order to maintain current levels of service.