Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

Assembly takes up taxes, cuts


Haines Borough Assembly members voiced support for reducing or eliminating dedication of sales taxes, and pursuing new alcohol, tobacco and marijuana taxes during a workshop Tuesday aimed at providing direction to staff developing next year’s budget.

There was also support voiced for a severance tax and for billing insurance for ambulance calls.

But the meeting also reflected significant differences in views between members. Member Mike Case and borough Mayor Jan Hill were absent. Tresham Gregg participated telephonically.

At issue is an ongoing deficit estimated at around $500,000 annually, covered largely by savings in recent years. Members on Tuesday agreed that they should seek to balance the budget, but to do that, they would take different paths.

Tom Morphet suggested making up about $150,000 during each of the next three years with cuts or new revenue sources, with the aim of zeroing out the deficit, backfilling with savings in smaller amounts each year.

“I don’t think we want to get to D-Day and have to cut or make up for $500,000 or $600,000 in one fell swoop,” he said. “But I think we need to start with some general figures.”

While addressing policy questions such as the property tax cap, the assembly needs to show it can reduce spending, Morphet said. “People want to see us cut in some places,” he said, though they may be willing to accept some user fees.

Chief fiscal officer Jila Stuart said the assembly needn’t take a rigid approach, as outside funding sources and cuts tend to fluctuate widely. “That’s why we have a fund balance, in order to absorb those uncertainties.”

Member Heather Lende said the group should take direction from the borough comprehensive plan and a community survey in 2011. “I know the library was at the top, emergency services were, and the school. We have some guiding documents to help us.”

Lende noted a recent Chamber of Commerce survey showing business owners rated Haines an excellent place to live. “As an assembly, we have potential to make Haines an excellent place to live with facilities and programs. Supporting these things makes economic sense and maybe the best thing we can do for the economy.”

Members zoned in on dedicated taxes, including 1.5 percent of sales tax that generates $800,000 annually for capital projects. Margaret Friedenaur said eliminating dedicated taxes would allow leaders to more freely move money around in the budget “at times like this when we really need it.” Lende, Ron Jackson and Morphet seemed to agree.

The dedicated tax for economic development may no longer make sense as the borough is now looking at a new model for economic development, Friedenauer noted.

Interim borough manager Brad Ryan defended the dedicated capital improvement project tax, saying it might be critical for generating money that could be used as a match for grants, including for Lutak Dock improvement; fiscal officer Jila Stuart said perhaps the dedicated amount of the tax could be trimmed back to 1 percent.

Changing dedicated sales taxes would require voter approval, so shifting money from dedicated funds to the general fund would take time, Stuart said. “It won’t be easy, but I think it’s important.”

Friedenauer said she also would not support funding for non-profits “because I think there’s better ways of doing it. There’s RFPs. There are better ways of showing support for nonprofits.” She said she would no longer support both nonprofit grants and community service property tax exemptions.

Friedenauer said she wanted a discussion about Mosquito Lake School but wouldn’t take funds from administrative support committees that she said had strong public support.

Morphet took aim at staff and assembly travel (about $100,000) and also said the assembly should direct interim manager Brad Ryan to be able to justify all borough jobs. “I think there’s a loud voice in the community that says, ‘Before you start upping my fees, I want some cuts down at city hall.’”

Lende and Morphet supported reducing tourism promotion, currently funded by a 1 percent dedicated sales tax. Member Gregg wanted to keep tourism funding, but perhaps spend it differently. “Tourism is an across-the-board benefit, for all of us, ideally.”

A severance tax might be overdue to tap into logging and mining, said Lende. Interim manager Ryan said it was “worth exploring.”

Of an alcohol tax, Friedenauer said, “Especially with our police budget on the rise, I think a lot of our issues with public safety revolve around alcohol.” She said she’d include tobacco and marijuana in the tax.

Friedenauer said she’d increase property taxes to maintain services and opposes charging for the ambulance, but would like to bill insurance for ambulance calls. “I don’t want to charge people who can’t afford it.”

Lende said she opposed a sales tax increase but would support a property tax increase. Local businesses already are taking a big hit from Amazon or outside stores, she said. She was against ambulance fees but wondered about how the ambulance is used for routine transport.

Morphet opposed sales and property tax increases and said he’s support an ambulance fee with one free call per year. He called an alcohol tax a “perfect user fee” to pay emergency costs related to booze. A tour tax should pay a portion of the tourism budget, he said. He also supported increasing the motor vehicle tax to pay for road maintenance and for asking seniors whether they’d be willing to volunteer to make contributions toward property taxes above their exemptions.

Jackson also supported an alcohol, tobacco and marijuana tax. “I think we ought to look at what other communities are doing,” he said. He is also for a tour tax, ambulance fees and resource extraction tax.

Gregg generally opposed seeking new revenue sources. “It’s a little premature to start adding these punitive taxes when we really haven’t really cut or consolidated those funds. There has been a bit of extraneous spending…. I would like to see more how we could cut back the borough costs of operation,” he said. He also was opposed to removal of tax exemptions.

Ryan said the assembly feedback was good. “There are so many ideas that we can go explore.” He said he didn’t get direction last year when he also crafted a budget as interim manager.


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