Haines Borough Assembly members agreed the municipality should send a message to lawmakers preferring a state income tax over a statewide sales tax during a committee of the whole meeting Tuesday.
Members Heather Lende and Tresham Gregg were absent.
Assembly member Margaret Friedenauer said, “I really can’t find a downside…it’s just more equitable, especially for a retiree community.” She added that capped permanent fund dividend checks would offset the income tax for moderate- to low-income families.
Friedenauer suggested the borough support House Bill 115, which would enact the third-lowest state income tax in the United States – equivalent to 15 percent of a taxpayer’s federal tax bill – and cap the dividend at about $1,100.
Case questioned if it was “the assembly’s business” to talk about what taxes the state might impose.
“I don’t think we’re going out on a limb to say we favor a state income tax over a state sales tax,” said member Tom Morphet. “I don’t think we have a lot of choices left. The state still has to cut $3 billion…We’re in the position of having an electorate that hasn’t paid income tax for 30-plus years, so it’s going to be an adjustment. But unless we want our town to dry up and blow away, we need to say something.”
The committee agreed in concept to a resolution drafted by the Petersburg Borough that opposes a state sales tax and favors a state income tax “to help provide for a fair, balanced and sustainable state budget.”
The committee took no position on capping the permanent fund dividend.
The committee was in favor of supporting an increased motor fuel tax to help pay for roads. Morphet said the tax in place now is the lowest in the nation. He said the tax seems like “the most democratic way” to pay for road maintenance.
The group took no position on imposing a marine fuel tax due to confusion on how those who pay the tax would benefit from it.
The committee discussion was prompted by questions from municipal lobbyist Bill Thomas on what message from the municipality he should take to lawmakers regarding state budget issues.
The committee opposed adopting roads maintained by the Department of Transportation should the state want to pass them off to municipalities or stop maintaining them altogether. Interim Borough Manager Brad Ryan said Thomas suggested the assembly take a formal position against taking over the roads.
“The only condition in my opinion where we would want to accept a road is if there was a tradeoff,” said Case.
The committee also opposed adopting state parks – like Chilkoot and Chilkat State Parks – if the state decides to close them.
Ryan said Thomas posed the question, “If they are going to close the state park, are we willing as the Haines Borough to entertain taking them over?”
“I think our strongest position is for the state to live up to its obligations,” said Morphet. “Any indication we show that we’d be willing to do it ourselves is going to give them ammunition to go ahead and start shirking their obligations.”