Assembly introduced bed tax ordinance

Voters may get to decide whether Kenai Peninsula Borough hotels and bed-and-breakfasts should have to charge a bed tax in the fall election.

The Kenai Peninsula Borough Assembly voted to introduce an ordinance that would send the proposition to the ballot asking voters whether the borough should charge an 8 percent sales tax on all temporary lodgings, defined as less than 30 days. There would be one exception — cities could opt out of up to 4 percent of it if they have their own similar sales tax on lodging, as Seward does.

The proposal came from Borough Mayor Mike Navarre’s administration as one way to shore up the borough’s fund balance, which the borough will draw from to cover its fiscal year 2018 budget. The assembly passed a budget with an increase to school funding and some cuts, but the borough will likely still spend about $4 million out of its fund balance to pay for operations without raising taxes, Navarre said. Though the borough has a fund balance to spend from, Navarre said he doesn’t want to conclude his term as mayor with an unsustainable budget in place.

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