By Melinda Munson

Voters will decide at the April 18 special election if they spend more on sales tax. Originally proposed by Assemblymember Dan Henry, the legislation seeks to raise the sales tax by 1.5%, six months out of the year.

The ballot questions reads:

“Shall the rate of sales tax collected upon sales made and services rendered in Skagway be increased from 5% to 6.5% for increased operational and infrastructural demands during the 2nd and 3rd quarters of each calendar year, April through September?”

Juneau and Sitka’s sales tax rate is 5%, Ketchikan sits at 6.5% and Seward charges 7%.

“I’m going to ask a favor,” said Assemblymember Jay Burnham. “If you are undecided about the tax increase of one and a half cents, I’m going to ask you to lean yes. That one and a half cents won’t make much of a difference for the residents of Skagway in the money coming out of our pockets. However, with an increase of revenue coming into the city coffers, it will make a difference with your quality of life. We will be able to get the city finances back to pre-pandemic levels and be able to fund infrastructure improvements that are needed in town. And if you don’t know, I would really like to have a pool in Skagway.” 

Henry also pushed for a yes vote.

“…There was a letter … that was sent in January that an individual in the community said that they were not going to vote for the sales tax increase unless they knew what the increase was going to be spent on,” Henry said. “And they would like to see the financial records. And I thought to myself, well, it would be easier, rather than writing a letter back in response and explaining what the sales tax would be spent on, it would be easier to write what we don’t spend sales tax on in this community.” 

A Feb. 8 letter from the Skagway Business Association declared that immediately following COVID-19 is not the time to adjust sales tax rates.

“Raising sales tax before we are re-established as a ‘must see port’ adds additional burden onto Skagway’s business and property owners. 

Increasing taxes because ‘the other towns are doing it’ (and then figuring out how the funds will be spent) is simply not prudent or responsible at this time. We ask that the community consider leaving sales tax at 5% and focus on bringing full-scale tourism back to Skagway.”

Long-time local business owner Debbie Elliott Ackerman agreed, noting it will increase rental rates.

“I am opposed to the sales tax increase,” she said. “I believe it will make an already expensive place to live year-round even more so … With the increase in groceries, fuel and utilities, this may well push more year-round people to leave.”

Food is not taxed in Skagway and residents traditionally enjoy a sales tax vacation in the fall and winter.

Polls are open April 18 from 7 a.m. to 8 p.m. at City Hall. Absentee ballots should be time stamped at the post office no later than April 18 and arrive at the clerk’s office by 4 p.m. April 20. Absentee-in-person ballots are available at City Hall until 5 p.m., April 17.

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