Homer Alaska - News

Story last updated at 6:17 PM on Wednesday, September 14, 2011

Voters face 3 ballot propositions



By Brian Smith
Morris News Service - Alaska

In the Oct. 4 municipal election, Kenai Peninsula Borough residents will have a say in at least three issues placed on the ballot that deal with sales tax and how they are represented.

In total, the borough assembly approved five measures for placement on the ballot. However, two of those — one to abolish the Lowell Point emergency service area and one to create a recreational service area in Seldovia — will only be up for decision by voters in those areas.

Kenai Peninsula Borough Mayor Dave Carey said he would not support either of the two ballot measures concerning sales tax increases.

Proposition 1

The first proposition on the ballot is the repeal of the seasonal sales tax exemption on non-prepared food items in the borough.

Currently, all sales of non-prepared food items are exempt from regular borough sales tax from Sept. 1 through May 31 as stipulated by Ordinance 2008-01, which was approved by voters in the 2008 regular election.

Carey said one of the questions he and others originally had about the measure was how much it would cut from funding for the Kenai Peninsula Borough School District considering the borough's 3 percent sales tax is dedicated to school funding.

In 2009, the exemption resulted in a loss of $1.5 million in revenues and $2.8 million in revenues during 2010, according to election information from the borough.

"There were a number of people that as we reduced our local funding to the schools said they did not realize that initiative would take (away) sales tax money that would have otherwise gone to schools," Carey said. "As a result, we put more property tax money into it."

Carey said he thought it was important to allow residents to have another look at the idea for that reason and also considering the borough hasn't been funding the school district to the cap.

"Without these funds, it is particularly difficult to fund the schools at the levels they request," he said.

Although Carey said he could see both sides of the issue, he would not support the repeal of the exemption.

"I am not in favor of any tax increases at this time and this technically would be an increase in taxes," he said.

Proposition 2

The other tax issue borough voters will weigh is whether or not to increase the borough-wide sales tax from 3 percent to 3.1 percent for funding of economic development.

Carey said several non-departmental organizations said they would like to have a steady source of income, instead of being at the mercy of the assembly and so they "would not have the discussion every year back and forth."

According to borough election information, the .1 percent increase would raise $900,000 annually. The increase would amount to an additional 1 cent on a $10 sale, or 10 cents on a $100 sale.

"That is quite a bit more than what we fund tourism and marketing and they saw it would also help the chambers of commerce and the cities," Carey said. "There were a number of things they felt they could do with those funds."

The ballot question also stipulates the borough must enter into agreements with all cities in the borough to "jointly or cooperatively provide for economic development."

Increasing the sales tax, according to borough election information, also would relieve some of the burden from property owners and shift it to all borough residents.

Before voting to place the measure on the ballot, the assembly debated how and if the borough's non-departmental agencies would get a slice of the revenues, but left that to be determined later.

Those non-departmentals include the Kenai Peninsula Tourism Marketing Council, Kenai Peninsula Economic Development District, Small Business Development Center, and the Central Area Rural Transit System.

"I have not seen how exactly they would give out these funds and that was part of the discussion even at the assembly level," Carey said.

However, Carey said he would still not support the measure.

"I have a concern that if we start, 'Oh it's just .1 percent now,' if we start doing that now, I see there will be additional increases in sales tax for other good and legitimate things, but I want to hold the sales tax for funding of education," he said.

Proposition 3

Voters also will have a chance to decide if they would like to change how many members sit on the assembly and the Kenai Peninsula Borough Board of Education.

As required by law, a reapportionment committee met throughout May and June across the peninsula to hear public feedback about restructuring and redrawing borough district lines to fit with the results of the 2010 Census.

The committee suggested letting voters choose between two plans — a nine-district plan or an 11-district plan.

A nine-district plan would realign existing boundaries for both boards to contain about 6,156 residents. The 11-district plan would create districts containing 5,036 residents, however it would cost $48,000 annually for assembly members, and $35,000 per year for school board members.

If approved, the 11 seats on both boards would be filled in the October 2012 election and would be staggered so three members would be elected for a one-year term, four would be elected to two-year terms and four would be elected to three-year terms.

Although Carey said he strongly advocated for the creation of three, three-member districts instead of the current system, he would be voting on the nine-district plan to conserve money.

"I haven't seen anything to show me that with 11 members, there will be greater representation for people," he said.

Brian Smith is a reporter for the Peninsula Clarion.

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