The Kenai Peninsula Borough Assembly this week rejected the ordinance that would repeal the nine-month sales tax exemption on groceries.
However, the issue is not completely off the table.
During Tuesday’s meeting, the assembly agreed to postpone voting down president Dale Bagley’s proposed substitute ordinance that would keep the sales tax in effect for six months of the year, from Oct. 1 to March 31.
Currently, the exemption is in effect from Sept. 1 to May 31.
“The voters have approved this seasonal sales tax exemption for groceries twice in the last year,” Bagley wrote in a memo. “For the assembly to completely eliminate this exemption would be contrary to their wishes.”
President of the Kenai Peninsula Educators Association David Brighton said he was in favor of the tax, which would go toward funding for education through the Kenai Peninsula Borough School District.
“We pay less taxes than any other state,” Brighton said. “Passing this tax keeps the district whole.”
Having a diversified revenue stream is important for every government, Brighton said. Taxing groceries is one way to accomplish that, he said.
Soldotna resident Linda Murphy said it was relevant to consider that the last time the issue was put before Kenai Peninsula voters the state was not experiencing financial constraints.
The city of Soldotna would lose $785,000 if they were not able to collect the sales tax year round, which translates to a 2.1 mill increase in property tax.
James Price, who has been supporting the sales tax exemption that was “passed by a majority vote,” in 2008, and 2011, said the borough has a history of repealing decisions made by Kenai Peninsula voters.
“There are better ways to get money than tax it off the backs of the people who buy groceries,” Price said.
Kasilof resident George Pierce said to repeal the exemption would be a “slap in the face to voters.”
Soldotna resident Daniel Lynch said the extra $30 that people would have to pay year-round if the food tax was enacted, would put some over the edge. People have fixed incomes, and barely have enough to make it through the week, and for some it is the difference between being able to feed themselves by the end of the week.
Nikiski resident Jesse Yorkman said he usually fights against taxes, but funding education should be the priority right now.
Assembly member Kelly Wolf said he was torn between Bagley’s ordinance, which he called the “compromise” and letting “the people speak,” by upholding the exemption.
Gilman said living in a state where minimal state taxes are garnered, Permanent Fund Dividends are received and senior citizens have property tax exemptions, making the choice to pay a little more on groceries is a realistic decision.
Following the assembly’s discussion and rejection of Gilman’s ordinance, Bagley suggested tabling the six-month taxation ordinance until the next meeting on April 7.
Kelly Sullivan is a reporter for the Peninsula Clarion.
