Homer Alaska - News -

Story last updated at 9:33 PM on Wednesday, September 10, 2008

Assembly to meet in Homer on Tuesday

Food taxes, land buyouts on the table

By HAL SPENCE
Morris News Service - Alaska

An ordinance allowing Kenai Peninsula Borough cities to tax food even if the borough cannot and another that would establish a land buyout program to acquire private property in a flood-prone subdivision near Seward are expected to draw public testimony at Tuesday's assembly meeting in Homer.

They are two of nine ordinances set for public hearings.

The regular assembly meeting begins at 7 p.m. in the Homer City Council Chambers. Committee meetings begin at 2 p.m.

Ordinance 2008-28 arose out of a request by the city of Soldotna for authorization to impose its own sales tax on food should borough voters approve Proposition 1, the tax-free food initiative ballot measure, at the Oct. 7 municipal election. The proposition, sponsored by Alaskans for Grocery Tax Relief Now, would require the borough to curtail collecting sales taxes on non-prepared food items (foods not meant for immediate consumption) from Sept. 30 to May 31 annually.

It has been estimated that not collecting the tax would cost the borough about $1.8 million a year, or more if food prices rise.

State law restricts general law cities like Soldotna, Homer and Seldovia to taxing only items also taxed by the borough. However, the same statute allows the borough, by ordinance, to authorize its general rule cities to tax sources not taxed by the borough.

Soldotna, which depends even more heavily on sales taxes than the borough, has asked for such authority. If granted, the city's city council could vote to impose its own city sales tax on non-prepared foods even if the proposition prevents the borough from doing so.

The Homer City Council has asked to do the opposite -- to be allowed to institute a tax holiday on food. Homer has indicated that, no matter the outcome of Proposition 1, it would like to act on a proposed ordinance exempting non-prepared food items from the city sales tax from Sept. 1-May 30.

Seldovia has not declared a position. Kenai and Seward are home-rule cities, and as such, already have the power to tax items the borough does not.

Ordinance 2008-19-18 would appropriate a grant of about $1.37 million from the Natural Resource Conservation Service and a borough match of just over $456,000 to conduct a voluntary buyout program in the Old Mill Subdivision near Seward, an area prone to annual flooding that pushes gravel downstream leading to extensive damage to structures and property and requiring costly dredging.

Other ordinances up for public hearing and final action Tuesday include:

* Ordinance 2008-19-14, which would appropriate a state grant of $26,500 to the South Peninsula Hospital Service Area for diagnostic hospital equipment;

* Ordinance 2008-19-19, which would appropriate $120,000 from the South Peninsula Hospital Service Area's capital project fund for purchase of capital equipment not previously budgeted. This is the first of two hearings. Another is set for Oct. 14;

* Ordinance 2008-26, which would authorize conveyance of just less than a half acre of borough land along Kachemak Way to the city of Homer, which needs it for water and sewer improvements;

* Ordinance 2008-29, which would amend borough code to incorporate Homer's non-motorized transportation and trail plan, the 2005 Homer area transportation plan and the Homer town center plan into the city's comprehensive plan. This is the first of two hearings. A second is set for Oct. 14.

Hal Spence can be reached at

hspence@ptialaska.net

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