Going against the recommendation of its own committee, the Haines Borough Assembly Tuesday decided not to ask voters about repealing the town’s 1 percent sales tax for tourism and economic development on the October ballot.
Several residents and tour operators turned out to rally in favor of the 1 percent tax’s benefits to the community, including Alaska Mountain Guides owner Sean Gaffney, Chilkat River Adventures owner Karen Hess, Haines Rafting Company owner Andy Hedden, Southeast Alaska Backcountry Adventures owner Scott Sundberg and Chamber of Commerce president Kyle Gray.
The issue came to the Finance Committee after commercial fisherman J.R. Churchill submitted a letter to the assembly last month asking the group to put the question on the October ballot via a referendum. The committee, comprised of assembly members Tresham Gregg, Diana Lapham and Ron Jackson, recommended on a 2-1 vote to let residents decide the fate of the tax this fall.
By the assembly meeting, though, Lapham and Jackson had changed their tune.
“I don’t like being pushed into something so quickly,” Lapham said, referring to the tight timeline for getting the question on the ballot. “In this audience this evening, overwhelmingly I heard that people don’t want to get rid of the 1 percent, they don’t want to put it on the ballot, or they want a citizen’s initiative.”
Lapham said she would support an initiative, which would require the interested person to file a petition and collect 210 signatures in order to get the question on the ballot.
Getting rid of the tax at this point would be like “shooting ourselves in the foot right now,” Jackson said. “That’s another $500,000 deficit in our budget,” he said.
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 is expected to bring in $536,000 in the current fiscal year.
Jackson said he appreciated Churchill bringing to light how revenue from the tax is funneled disproportionately to the tourism portion of the budget as compared to economic development.
George Campbell was the sole assembly member in favor of putting the question to voters. Campbell said he believed the community would support retaining the tax.
“I don’t understand the reluctance to throw it out there and let the public make their own decisions. That’s one of the things that needs to happen in our community: We need to empower our voters to choose the way they want,” he said.
Lapham called Campbell’s assertion about the other members’ reluctance “way wrong” and “very off base.” Putting the question on the ballot this year would not give enough time for voters to “get educated on how the tax impacts this community,” she said.
Assembly member Mike Case was confused why the group was even discussing the issue at such length, and balked at Campbell’s “Why not put it on the ballot?” sentiment.
“Well, why not put it on the ballot that all the borough buildings should be pink and white? Why not put it on the ballot that we’ll change the sidewalks and make them all gravel or something? We don’t do it because there’s no call for it. And there’s no call for this except from just one or two people. I don’t even know why we’re discussing it this much,” Case said.
At the June 30 Finance Committee on the topic, only two people besides Churchill spoke in favor of putting the repeal question to voters.
Churchill said the tax amounted to a subsidy of one industry over others, and that voters deserved a chance to decide whether to retain it.