Story last updated at 1:46 p.m. Thursday, December 5, 2002

Sales tax plan misguided
I would like to address several points concerning recommendation #12 of the Kenai Peninsula Borough sales tax ordinance #2002-39:

The recreational sales industry brought $30 million in sales tax to the borough last year, which reflects about $150 million in sales for peninsula business. This is not counting the 3.5 percent sales tax.

It is obvious that recreational businesses are collecting a fair share of sales tax. People come here for the recreation. Without it, lodging, restaurants, transportation, gift shops, galleries, etc. would see a dramatic decrease in their business.

The borough is operating with a surplus. It does not need additional tax money. Borough staff have stated this publicly.

Sales tax is certainly the way to go when money is needed; however, the timing of this recommendation is poor. The economy continues to be unstable, tourism is down in some cases from 20-40 percent, and we are facing threats of terrorism and war. More people are staying home where they feel safe and can save money.

This is not the time to increase sales tax for the very customers who have the potential to bring us so much business. A few years down the line when the economy and tourism rebound and funds are needed, then let's look at the sales tax again.

We are all in this together and should look at the big picture and see how it affects the small businesses on the entire peninsula.

There was little public input to the committee when this recommendation was drafted. Seasonal businesses are closed now and many business people are out of the state for the holiday. Again, the timing is off.

Information to the public on opportunities for input has been spotty. Some people do not understand that recommendation #12 affects all recreational sales -- kayaking, water taxi service, horseback riding, 4-wheeler tours, fishing and hunting charters, tour groups and transportation, and on and on.

As it is, the sales tax code is cumbersome and requires a lot of bookkeeping. This recommendation will make it even more difficult for small businesses that will have to change their bookkeeping and billing procedures.

The borough staff and sales tax committee have stated that their goal was to simplify the process and make it fair and equitable and not to raise additional funds. Recommendation #12 achieves none of those goals.

I am sure it would not be popular, but if the borough wants to make it fair and equitable, then raise the tax cap or eliminate it completely. Then everyone would be charging the same sales tax across the board and no one could be accused of short-changing the public. Singling out particularly industries hardly seems to be the way to provide fairness and equity.

Diane Borgman

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