An ordinance proposing a one percent year-round sales tax to be used for funding a Recreations Center expansion – including a pool facility – made a brief appearance at the March 16 Borough Assembly meeting.
The ordinance was removed from the agenda prior to its first reading as Assembly Member Jay Burnham, who proposed the legislation, motioned for it to be pulled in order for the municipal attorney to review it.
Assembly Member Spencer Morgan was absent from the March 16 meeting, and Burnham also suggested waiting for a complete representation of the assembly before moving forward, given the scope of the ordinance.
As it stood on March 16, the ordinance would have put language on the Oct. 3, 2017, ballot to ratify a one percent sales tax increase.
Near the end of the meeting, Assembly Member Orion Hanson said in his opinion the proposal may have better traction with voters if the municipality were to finish one project before starting another. He added that in the current political climate, he did not think voters would pass the measure.
“I heard on the radio from the governor that it is most likely to be either a state income tax or a state sales tax, it’s being reviewed and considered by the assembly [Alaska State Legislature], and one or the other is going to pass,” Hanson said. “Something’s got to happen on the state budget crisis.”
Hanson said the assembly should have “prudence” as it discusses sales tax until it finds out what is coming down from the state government.
“We pass a one percent sales tax, the state passes a one, one and half percent sales tax and we’re looking at seven and a half percent, that’s not small change when it goes over the course of numerous transactions throughout the community and businesses and year-round residents as well,” Hanson said.
Burnham disagreed, saying he feels the voters would vote “yes” on the proposition.
“I think it would be because they want a pool, just like me, and they want a rec center expansion, just like me,” Burnham said. Beyond that, Burnham said in regard to Alaska’s financial difficulties that the state is “probably going to pull back as much as they can from every municipality that they can,” and – though it would be used to fund the rec center renovations – the one percent sales tax would be an additional revenue source for the municipality.
“All we’re going to be doing is bringing in more people,” Burnham said. “We’re going to be bringing in bigger ships. There’s going to be more revenue from sales tax.”
A motion to remove the item from the agenda passed 5-0, with a promise from Burnham to bring it back at a future assembly meeting.