The so-called food-tax holiday ballot measure promoted by James Price, a Nikiski resident and head of Alaskans for Grocery Tax Relief Now (AGTRN), earned better than 60 percent of the vote, winning by a margin of 5,711 to 3,724.
"I'm very happy that the people showed up and voted. My biggest concern now is the ordinance the borough is proposing to allow the cities to continue taxing," said Price, referring to an ordinance the assembly passed on Sept. 18 but held on reconsideration until their next meeting Oct 14.
Though state law restricted the borough from actively campaigning against the proposition, Mayor John Williams' administration warned that the tax holiday would cut borough revenues by perhaps $1.7 million or more annually. The borough's General Law cities of Homer, Soldotna and Seldovia, which by law can only tax items also taxed by the borough, also stand to lose money.
The state statute imposing that restriction, however, also allows them to impose taxes on products not taxed by the borough, if granted the authority to do so by the borough assembly.
A formal request for that authority by all three municipalities is what led to the assembly's pending ordinance on the matter.
"I think the assembly should reconsider this ordinance," said Price. "The tax authority comes from the borough and not the municipalities. When the voters of the borough remove some of that authority, going around them does not serve the public good."
Soldotna and Seldovia have indicated they would consider ordinances applying their own taxes on food during the nine-month period.
Homer, on the other hand, may go the other way. City officials there are considering their own tax holiday measure. Action on city ordinance 08-32, which closely resembles the wording in Proposition 1, is tentatively scheduled for a public hearing on Oct. 27.
All three cities depend on tax revenue derived from spending by residents living outside their borders. It is not clear yet whether the loss of the sales tax revenue will lead to increased property taxes within those municipalities, but some residents have expressed such concerns.
The home rule cities of Kenai and Seward already have the authority to tax beyond what the borough taxes.
Regardless of the effect on the revenue streams of municipal governments, there were good arguments for establishing a tax holiday outside of the tourist season. Given the increasing costs of virtually everything, the vast majority of voters saw Proposition 1 as welcome tax relief in hard times.
The borough tax will be applied during June, July and August, the three months during which the population of the peninsula swells with visitors.
Hal Spence is a reporter for the Peninsula Clarion.
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Homer Alaska - News -
Story last updated at
8:32 PM on
Wednesday, October 8, 2008
Voters say 'yes' to seasonal holiday on food tax
By HAL SPENCE
Morris News Service - Alaska
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