Early political career in Wasila City

Wasilla is a city of 6,715 that is 68 km (42 miles) north of the port of Anchorage.Palin began her political career in 1992, when she ran for a three-year term on the Wasilla city council, supporting a controversial new sales tax and advocating "a safer, more progressive Wasilla.She won, and won re-election to a second three-year term in the 1995 election.

In 1996, Palin challenged and defeated incumbent John Stein for the office of mayor.[19] In the campaign, she criticized Stein for what she called wasteful spending and high taxes,and highlighted issues such as abortion, religion and gun control.[20] Though the position of mayor is non-partisan, the state Republican Party ran advertisements on her behalf.

In October 1996, she asked the Wasilla police chief, librarian, public works director, and finance director to resign, and she instituted a policy requiring department heads to get her approval before talking to reporters.In January 1997, Palin notified the police chief, Irl Stambaugh, and the town librarian, Mary Ellen Emmons that they were being fired.Palin said in a letter that she wanted a change because she believed the two did not fully support her administration. She rescinded the firing of the librarian, but not the police chief.The chief filed a lawsuit; but a court dismissed it, finding that the mayor had the right to fire city employees for nearly any reason.According to Ann Kilkenny, a Democrat who observed City Council, Palin also brought up the idea of banning some books at one meeting, but did not follow through with the idea.

As mayor of Wasilla, Palin was in charge of the city Police Department, consisting of 25 officers, and Public Works.She was praised for cutting property taxes by 40 percent while improving roads and sewers and strengthening the Police Department.She also reduced the mayoral salary, reduced spending on the town museum, and opposed a bigger library.She increased the city sales tax to pay for the new Wasilla Multi-Use Sports Complex,which eventually went over budget due to an eminent domain lawsuit.

Palin ran for re-election against Stein in 1999 and was returned to office by a margin of 909 to 292 votes.Palin was also elected president of the Alaska Conference of Mayors.

During her second term as mayor, Palin hired the Anchorage-based lobbying firm of Robertson, Monagle & Eastaugh to lobby for earmarks for Wasilla. The effort was led by Steven Silver, a former chief of staff for Senator Ted Stevens,and it secured nearly $27 million in earmarked funds. The earmarks included $500,000 for a youth shelter, $1.9 million for a transportation hub, $900,000 for sewer repairs, and $15 million for a rail project linking Wasilla and the ski resort community of Girdwood.Some of the earmarks were criticized by Senator McCain.

In 2002, term limits prevented Palin from running for a third term as mayor.Her stepmother-in-law, Faye Palin, ran for the office but lost the election to Dianne Keller after Sarah Palin endorsed Keller,her cousin.