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Council takes food tax holiday repeal off table

Posted: January 29, 2014 - 5:14pm

In the latest version of a Homer City Council attempt to repeal a seasonal holiday on sales taxes for nonprepared food, the council on Monday night came one vote short of putting on the ballot the question of if voters wanted to repeal that holiday. The motion got three votes, with council members Beau Burgess, David Lewis and Francie Roberts voting yes and council members Bryan Zak and Gus VanDyke voting no. The motion failed because it lacked the four votes necessary to pass under council rules. Council member Barbara Howard had an excused absent.

At the last meeting the council voted down another proposal by council member David Lewis to end the holiday through council action, something it could do on its own authority. Kenai Peninsula Borough voters passed a citizen initiative creating a holiday on food taxes from Sept. 1-May 31. That affects only the 3.5-percent borough sales tax, and local government bodies can choose to not apply the holiday without a vote. Homer is the only borough city that, through a citizen advisory vote, chose not to do so.

The twist with the latest idea? Voters also would decide if .25 percent of Homer’s 4.5-percent sales tax would be dedicated to community recreation. Council member Beau Burgess said he introduced the idea because he wanted to show a direct connection between raising taxes and funding a service. He also said he wanted to start a discussion on a challenge facing the city: How do you fund programs beyond basic services like police, fire, roads, sewer and water, not to mention depreciation?

“It’s one thing to say ‘I don’t like this,’” Burgess said, referring to taxing food. 

“It’s another thing to offer a solution. My hope is for someone to say ‘I have another idea.’”

Public testimony was almost universally against repealing the sales tax holiday, with only one person, Friends of the Homer Public Library board member Andy Haas, urging repeal of the holiday.

Larry Slone invoked psychologist Abraham Maslow’s hierarchy of needs in saying why he opposed taxing food. Maslow said things like food, water and breathing are primary needs and things like culture, creativity and fellowship are secondary needs.

“There’s something fundamentally flawed in this philosopohy about taxing people on their primary needs and turning it around and giving to to somebody’s secondary needs,” Slone said.

Another opponent of repealing the food tax holiday, Steve Hooker, a volunteer at the Homer Community Food Bank, spoke of the effect a food tax has on the poor. He said he thought of a woman he saw take rotten tomatoes, and when he asked her why, she said they were OK — you just cut off the rotten parts.

“I look at that lady,” he said. “We’re going to tax you a little bit more for our wants. Our wants are more important than your needs.”

Ken Landfield, a Pier One Theatre actor and volunteer, said he thought arts, culture and recreation are important. 

“What you’re talking about is feeding the mind,” he said. “You have to feed the body first, but you have to feed the mind.”

Still, Landfield said he could understand the negative connotations of filling artistic and cultural needs on the backs of poor hungry people.

Even recreation supporters urged defeating the ordinance. Kate Crowley of Recreate Rec, a group advocating for increased recreational funding, said Recreate Rec was not for the repeal of the food tax holiday,

“The consensus was this was not the right solution for the recreational community in and around Homer,” she said.

At the end of the meeting in public comments, Ginny Espenshade encouraged the council to pursue the idea of a borough recreational service area similar to what was done in Seldovia. That would raise funds for recreation out of property taxes. A rec service area could be created by region. It also would tap taxpayers some council members said sales taxes are designed to exploit: non city residents working and playing in the city who don’t pay local property taxes.

Burgess encouraged people to come up with new ideas for raising city revenues. City Manager Walt Wrede noted that the limit on sales taxes hasn’t been raised in years above $500. That’s the maximum portion of a purchase sales taxes can be charged to.

“You could buy a Mercedes and pay the same tax as if you buy a beat-up Subaru,” Wrede said.

“It’s got to be stuff that’s feasible,” Burgess said, “Let’s have a discussion in feasibility if it’s outside the box.”

Michael Armstrong can be reached at michael.armstrong@homernews.com.

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