By Melinda Munson
Assemblymember Dan Henry presented Ordinance 22-10, aimed at raising sales tax, at the Nov. 17 assembly meeting.
The ordinance proposed increasing sales tax from 5% to 7% during the second and third quarters of the fiscal year, when Skagway is at the height of tourist season.
“My real hope is at the end of the day, or the end of this discussion, or after second reading, that we’ll probably zero in at 6.5%,” Henry said. “That would be identical to Ketchikan, Hoonah – several other communities in the region, all of which have a minimum of 10 times the population.”
Assemblymember Reba Hylton motioned to amend the rate to 6%, adding that the national average is 6.35%. The amendment passed with five ayes and a no from Henry, who continued to advocate for 6.5%.
Sam Bass, assembly member, noted that Ketchikan’s sales tax rate is 6.5%, with Juneau and Sitka at 5%.
“I don’t want us to be the highest on the [cruise] route. I don’t mind us being equivalent or less, but I would like to stay competitive. So, I’ll support the 6%,” Bass said.
Henry said the sales tax increase “is not targeting anyone. It is appropriately allocating a percentile so that we can host these people, 10,000 of them a day, in an appropriate, professional, safe manner. I would be surprised, quite frankly – because this will have to pass a second reading and then go to a ballot. I would be surprised if it didn’t receive 100% of the vote.”
“You’re gonna be surprised,” Mayor Andrew Cremata promised Henry.
The ordinance, which passed its first reading unanimously, will get a second reading Dec. 1.
If forwarded by the assembly, voters would need to ratify the measure via proposition on a special election ballot.