By Jessica Edwards
Sales tax revenues in the Haines Borough were up 4 percent in 2007, or
$94,000, and bed tax revenues were up 6 percent.
Because the borough’s database systems that compile the tax
statistics are broken, the sources of the increases are somewhat unclear.
Sales tax totals for 2007, based on a rate of 5.5 percent, were
$2,389,928 compared to $2,295,715 in 2006. Bed tax revenues increased $4,313, up to
$74,829 from $70,516 in 2006.
"My sense is that a lot of that (increase) is due to extra
construction projects such as the school" and capital improvements, said borough
manager Robert Venables. "The jump occurred near the beginning of the year with the
start of construction projects and flattened out towards the end of the year."
In addition to the new school, construction starts included the borough
shop, road improvements, fuel lines at the boat harbor, and zincs at the Port Chilkoot
Dock.
He said that while the initial transactions for municipal building
projects might not generate sales tax revenue, that money was diffused into the local
economy as a residual effect.
Money from the 5.5 percent sales tax is divided between the areawide
general fund (1.5 percent), the town site service area (1 percent), medical services (.5
percent), economic development and tourism (1 percent), and capital improvements projects
(1.5 percent).
Chief financial officer Jila Stuart said the breakdown of the sector
report function of the borough’s tax databases in July 2007 made it difficult to
pinpoint the sectors contributing to increased revenues.
Stuart said when the software was functioning correctly, the reports
made it easy to assess factors contributing to revenue statistics in a given year. For
example, the sector reports made it possible to tell if home building starts and higher
utility prices or increased tourism contributed to higher tax revenues.
"It helps forecast and budget for the future," Venables said.
The malfunction has "hinder(ed) the ability to monitor finances," and determine
the source of increases or decreases in a given year.
Venables said sector reports also helped monitor tax revenues as they
were collected, preventing errors and incorrect reporting.
He said purchasing new software was a priority for the borough, but
said price was an obstacle. "Juneau just spent, I think, $5 million on a system.
We’re trying to find one for under $100,000." He said a new software package
would consolidate the borough’s databases into a single, standard accounting program.
In the meantime, the borough has projected flat sales tax revenues for
budgeting purposes in the coming year.
Efforts to fix the malfunctioning sales and lodging tax databases were declared a lost
cause by both a local consultant and a group in Anchorage, who said the information
couldn’t be retrieved. Both recommended investing in a new accounting program, Stuart
said.
