The Haines Borough Assembly is scheduled to introduce a seasonal sales tax ordinance on Tuesday. That action must happen on Tuesday in order for voters to decide on the idea in October’s municipal election.
I strongly support a seasonal sales tax, but the assembly’s main option at this time is bogged down in complications and politics. I’m asking voters to reach out to assembly members to support a cleaner option, one that reduces sales taxes in winter and raises them in summer.
Let me explain.
In my campaign for Haines Borough Assembly in 2016, I ran on a two-pronged economic development plan: Keep people in town year-round and keep them shopping at local stores.
There are many different ideas for improving our town’s economy, but these two seemed to me the most basic and achievable.
That’s why I support a seasonal sales tax program in Haines. The idea here is to raise the general sales tax rate in the summer when sales swell due to an increase in population and business activity, then lower the rate in the winter months when folks struggle to get by.
The net effect is that the borough government raises more income to pay for schools and other essentials and folks who slug it out here year-round get a tax break, saving some money on groceries, heating fuel and other wintertime expenses.
The idea is brilliant and it’s widely agreeable to year-round residents, who are the majority of our residents. It’s already done in Ketchikan, Skagway and Sitka.
Haines Borough leaders have considered this idea previously, but it’s always gotten bogged down in politics: Somebody also wants to reconfigure sales taxes to reduce the percentage of sales taxes designated for tourism promotion and economic development, or to make some other additional change.
Politics ensues and the idea never makes it on the ballot, and the idea has to make it to the ballot because local sales taxes can only change by a vote of the people.
The assembly right now is rushing to get on the October ballot a seasonal sales tax. That’s a good thing, as state and federal cuts have left us strapped for cash.
Unfortunately, the main proposal at this time is all gummed up in politics, particularly a section of it that would reduce tourism promotion and economic development funds by about $300,000. Tourism promotion money is important to this town. In fact it’s vital for attracting independent visitors, the kind of tourists that support our local grocery stores, motels and gift shops.
Reducing tourism promotion money – particularly when many of our Canadian visitors are already boycotting our town due to warlike statements by President Trump – would be a grave mistake.
Another element of the assembly’s main seasonal sales tax proposal is to exempt groceries from sales tax from October through March instead of actually lowering sales tax in winter.
I strongly support removing sales tax from groceries but the actual cost of providing that exemption is unknown at this time. Also, an actual reduction in the sales tax rate in winter would save residents money on groceries, fuel bills and everything else they buy, not just food. Also, why not remove sales tax from groceries year-round?
Clearly, the question of taxing food is a separate question from creating a seasonal sales tax. It warrants separate consideration and should be considered, but it complicates the seasonal sales tax idea at this time.
The simplest, cleanest, most supportable option for Haines Borough Assembly members, who on Tuesday must introduce a seasonal sales tax ordinance in order to get it before voters in October, is to raise the general sales tax in the summer and lower it in winter. Period.
There are two options in Tuesday’s assembly packet that provide for a clean, seasonal sales tax. One is labeled “Simple Option.” Another is labeled “Forster Option.”
Please contact your assembly members and urge them to support a seasonal sales tax that is simple and is not complicated by political conditions, one that goes up in summer and down in winter, without add-ons.
That’s an option we can all get behind.