City of Palmer Finance Director Gina Davis has worked in the city finance department for over 15 years. She says that the department makes sure that public funds are responsibly managed. This means that revenues are collected and expenditures are tracked.
The city operates about a dozen funds. Each has its own account to track. The funds cover everything from the general fund to enterprise funds like water, sewer, and the airport.
Palmer’s 2025 audit received an unmodified opinion from the auditors. This is the highest level of assurance an auditor can give. It means that the city’s financial records accurately reflect its operations, funds were properly accounted for, and grant requirements were met.
Davis noted the temporary increase in the city sales tax is from 3% to 4%. The additional funds will help pay for construction of the new library. The sales tax will return to 3% in fall 2027.
Businesses collect the tax from customers and remit it to the city. They self-report the sales tax collected. It’s an honor system. However the possibility of an audit helps ensure compliance.
Davis explained that even temporary vendors operating within Palmer city limits are required to collect and remit city sales tax. This includes vendors at Friday Fling and the Alaska State Fair.
Palmer utilizes online systems for payment of utilities and sales taxes. Folks can still mail a check or or stop by city hall. Gone, though, are the days when people lined up at City Hall to pay at monthly deadlines.
Automated reminders also make compliance easier for businesses.
Property taxes work differently. The Mat-Su Borough collects both borough and city property taxes and distributes Palmer’s share back to the city each month. Palmer sets the city property tax rate at three mils. This is separate from the borough mil rate.
Residents inside the city pay both borough and city property taxes. Borough residents outside the city may instead pay fees for road or fire service areas. Their total tax rate may be less, the same, or more than what city residents pay.
One of the biggest changes in recent years has been the collection of sales tax for online purchases. Palmer joined the Alaska Remote Seller Sales Tax Commission in 2019. The city has received more than $1 million annually from taxes on remote sales since 2023. Davis says the program creates a more level playing field for local businesses who have to compete with online retailers in addition to providing revenue to the city.
City staff have started preparing the 2027 budget. The city manager will present the proposed budget to the City Council in October. Davis encouraged residents to attend or watch the public meetings. They provide insight into how local governments balance priorities and make financial decisions.
Enterprise funds, such as water, sewer, and airport operations, are largely self-supporting through the fees they collect. Other revenue sources include police citations and payments from the borough for fire services provided outside the city limits.
Davis emphasized that Palmer remains financially healthy. The city maintains a positive fund balance, or reserve. This is built when annual revenues exceed expenditures.
The full interview with Palmer Finance Director Gina Davis is found on bigcabbageradio.org in podcasts.
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Mike Chmielewski reported this Page Two article and yours truly, Lee Henrikson produced it. If you have an idea for a Page 2 topic, please email us at page2@radiofreepalmer.org.
That’s it for today and the news on Page Two on Monday July 27, 2026.