Note to future Haines Borough Assemblies: You’re probably involved in thievery if you’re using the 1 percent sales tax for tourism promotion and economic development for purposes other than funding your tourism department and the Haines Economic Development Corporation.
The theft of this fund by assemblies and managers is a little-noticed but sad story: Little noticed because most people in town don’t follow borough business closely enough to care, and sad for the potential revenues lost to the town due to the theft.
The story begins in 1987, when voters in the City of Haines decided it would be good to dedicate a 1 percent sales tax to promote the town as a tourism destination.
The town’s tourism department bought advertising in publications like the Milepost, Audubon and Northwest magazines and set up booths at trade shows in Alaska and the Lower 48.
The spending worked. Independent visitors helped support four downtown RV parks, attractions such as a local melodrama and salmon bake, and businesses like the Halsingland Hotel restaurant and bar.
Ever since then, people covetous of the money generated by the 1 percent have chipped away at it, to our town’s detriment. The mischief started in 2004, when voters were hoodwinked into expanding the purpose of the tax to include “economic development.”
Because no one can neatly define “economic development,” borough staff, with approval of assemblies, started using revenues from the 1 percent tax as a type of slush fund, to be used for anything they didn’t have other money for, including Fort Seward road maintenance and, shockingly, harbor fuel tank replacement.
(The latter was an apparent violation of borough code, as the harbor, by code, must pay for itself through its own enterprise fund.)
Even this year, the assembly couldn’t control itself, taking $24,000 of 1 percent revenues to pay for a borough lobbyist in Juneau who accomplished nothing.
This thievery occurs because borough managers, who have the privilege of proposing the town’s budget, allocate a portion of the 1 percent for tourism promotion and economic development but have typically “saved” other chunks of it, building a nest egg ripe for mischief. The nest egg is at $112,000 this week.
The most recent assault on the 1 percent came tucked inside a seasonal sales tax proposal floated by assembly members Carol Tuynman and Gabe Thomas. It would have cut the 1 percent for tourism and economic development to a half-percent, or from about $645,000 annually (based on pre-COVID revenues in 2019) to $322,500.
When money from the 1 percent tax started being used for things other than promoting the town, Haines began losing independent visitors, the folks who arrive here for several days and spend lots of money.
The town became more focused on cruise ships and special events than on campers from the Lower 48 or fishermen down from Canada. Events lost steam that once drew considerable numbers of independent visitors, including the Southeast Alaska State Fair and Alaska Bald Eagle Festival.
This year, the assembly came a bit closer to meeting the intent of the 1 percent, as established by voters. The assembly dedicated all but $24,000 (for the lobbyist) of an anticipated $419,000 in revenues to tourism promotion. They used COVID-relief money to fund the borough-created Haines Economic Development Commission, the only other legitimate use for the 1 percent fund other than tourism promotion.
To remain true to the intent of this tax, as established by voters, the assembly also should restrict use of the $112,000 nest egg to funding the tourism department or HEDC. Other uses of this fund are questionable, at best. At worst they’re an outright, fraudulent negation of voter intent, and a form of bureaucratic theft.