The Haines Borough needs at least a short-range fiscal plan to resolve a shortfall resulting from Governor Dunleavy’s radical cuts to local government and the ill-advised exemption of up to $300,000 in local property taxes passed by voters last October.
That’s the bad news.
The good news is that making up about $1 million in lost or reduced revenues needn’t be terribly painful or difficult.
First, the Haines Borough will soon be done paying off the debt for our $17 million school reconstruction project in 2007. That will add $350,000 to borough coffers next year.
Second, if voters in October approve a seasonal sales tax that raises sales tax 1 percent in winter and reduces sales tax 1 percent in winter, the borough will reap an estimated $247,000.
Combined, those two sources equal nearly $600,000 in additional income, more than the $540,000 increase in school funding the borough was forced to add this year due to Dunleavy’s attack on public schools.
Next fall, we can wage a campaign to repeal the additional $150,000 exemption on property taxes for senior citizens passed last year. Seniors make up some of the wealthiest members of our community and helping themselves to a near total exemption of property taxes created a resentment from young citizens that won’t go away until this mistake is fixed.
Repeal would also net about $300,000 more in income for our borough.
That’s $900,000 right there.
Other sources of income that should be considered include a local severance tax on export of whole logs and gravel, a motor fuels tax, an alcohol sales tax, reinstatement of a tax on tours and an increase in the local bed tax.
I call this approach to government funding “many pots.” A little bit of new income from many sources can add up to a considerable amount of money to plug budget holes created by deep cuts and increasing costs.
A severance tax on export of whole logs and gravel already has wide community support. Export of whole logs is prohibited from national forests (some primary milling is required in the United States) but ridiculously is allowed in our state forest.
In the upcoming Baby Brown sale, we’ll lose 1,000 acres of ancient forest and get only a few, if any, temporary jobs falling and hauling whole trees to the dock. That’s insane. Placing a severance tax on round-log export at least gives us a bit of return on this insanity by the State of Alaska.
Gravel is a non-renewable resource. Some compensation is due for shipping it out of our town, never to return. Severance taxes are non-renewable resources are common across the United States.
At 4 percent, our bed tax is the third lowest among 47 Alaska communities that levy a tax on lodging. The statewide average bed tax is 7.1 percent. Certainly we can increase that source a smidge.
If we are to ever again pave a street in Haines, we’ll need a local tax on motor fuels designated for roads. (Current road work by the borough is being paid for by one-time federal disaster funds for damage from the 2020 Haines landslide disasters.)
If you can afford to pay $5 per gallon for gas, you can afford to pay $5.05 with a nickel going to pay for wear-and-tear on borough roads from your car. The city of Anchorage adopted a local motor fuels tax years ago and other municipalities in Alaska are considering it.
Don’t want to pay more for gas? Buy a smaller, more efficient car, arrange to make fewer trips, carpool or ride a bike. A tax on motor fuels affects only folks who are damaging local roads by driving a lot.
The Haines Borough levied a tour tax once. It was a good idea, as tours carry their own public costs, including to our police, public works, tourism and ambulance departments. A one percent tax on local tours wouldn’t be felt by visitors and would raise considerable money.
A half-dozen or so Alaska communities levy taxes on alcohol sales in addition to local sales tax. That’s understandable and justified. Consumption of alcohol often leads to abuse, accidents and other trouble that taxpayers pay to remedy. Shifting more of that tax burden from non-drinkers to drinkers is both appropriate and just.
We have some pretty big holes in our town budget. Fortunately, there are many fixes we can employ. To fill big holes, the best solution is to take a little bit of money from many pots.
Also, if we ever again elect responsible state and federal politicians who live up to their obligations to support our town, we can roll back these measures.