After more than an hour of testimony from residents, the Haines Borough Finance Committee last week recommended to let voters in the fall municipal election decide the fate of the 1 percent tax for tourism and economic development.
Committee members Ron Jackson and Diana Lapham supported the recommendation; Tresham Gregg was opposed. The assembly will take up the question as a discussion item at its Tuesday meeting.
The issue came to the committee after commercial fisherman J.R. Churchill submitted a letter to the assembly last month asking the group to put the question on the November ballot via a referendum.
“The borough needs to put its finger on the pulse of whether or not people still support this,” Churchill, who favors repealing the tax, said at the June 30 committee meeting. “I don’t necessarily think that my perspective is going to win out here, but every so often you need to – I think, anyway – give a voice to these people who haven’t ever had a chance to vote on this.”
Of the 5.5 percent sales tax consumers pay in the Haines Borough, 1 percent automatically goes to the municipality’s tourism and economic development fund. The tax was established in 1985 and is expected to bring in $536,000 in the current fiscal year.
Gregg said benefits of the tax to the entire community are wide-ranging and complexly intertwined. “To upset the apple cart at this point seems detrimental to the whole community,” he said.
Gregg added that if Churchill and supporters of the repeal want the item on the ballot, they should do so via initiative, which requires filing a petition and collecting 210 signatures, or 25 percent of the total ballots cast in the last regular election.
The committee itself barely discussed the matter, as comments from residents and other stakeholders – including tourism director Leslie Ross – took up most of the 90-minute meeting.
Ross objected to people calling the tax a “handout” to private industry, saying she sees it as an investment in the economic growth of Haines. “I market the town. I don’t market specific businesses. I market what Haines has to offer,” she said.
While she firmly believes the tax should be kept in place, Ross said she would be open to discussing how the revenue is allocated, specifically regarding the “economic development” portion of the budget.
Of the $536,000 the borough expects to bring in with the 1 percent tax in the current fiscal year, $397,000 is budgeted for tourism. The two big chunks of the tourism budget are salaries and wages ($111,000) and advertising ($130,000).
Only $71,500 is budgeted for economic development. The majority of that ($55,000) is for professional and contractual services, money that was most recently used to fund Bill Thomas’s lobbyist contract.
Several residents expressed frustration that allocation of the tax was disproportionate, with tourism taking the lion’s share.
Ryan Cook, president of the Lynn Canal Gilnetters Association, asked why some of the 1 percent tax revenue couldn’t be put toward the Small Boat Harbor expansion, especially considering the project’s $10 million shortfall.
“Why can’t we use some of that economic development money to go toward our new boat harbor? I mean…throw a dog a bone every once in a while,” Cook said.
Some of the tax revenue is going toward the harbor this year, according to chief fiscal officer Jila Stuart.
More than $100,000 is set to be siphoned out of the economic development fund for port- and harbor-related projects in the current fiscal year: $75,000 toward a local match for the boat launch ramp, $15,000 for fuel dock electrical upgrades and $14,000 to the Port Chilkoot Dock fund to offset losses from the cruise ship waiver program.
Scott Sundberg, a heliski tour operator who sits on the Haines Chamber of Commerce board, said he supports retaining the tax, but the revenue should be distributed more fairly and transparently.
Sundberg also pointed out that the borough has struggled to identify how it will promote economic development, and that the chamber has been working on a proposal to create an economic development corporation.
Chamber president Kyle Gray, chamber board member and tourism operator Sean Gaffney and Haines Sheldon Museum director Helen Alten spoke in favor of keeping the tax, as did commercial fisherman Don Turner.
Commercial fishermen Steve Fossman and Brian O’Riley advocated for putting the question on the ballot.
“I’m not against helping people, but I’m not asking people to help me, all right?” O’Riley said. “That 1 percent is taken out of my pocket. Well, I want to keep it in my pocket.”