The economy grew again in 2018, continuing a trend that saw clear increases in the retail and tourism sectors similar to growth between 2016 and 2017, according to borough data.
Sales tax revenues rose by 9 percent in the first three quarters of 2018 compared to the same period in 2017—with the largest spikes reflected in the petroleum and auto, and tourism sectors.
Tourism sales tax revenues leapt by 14.7 percent in 2018, a nearly $80,000 increase which reflects roughly $1.5 million in additional sales to the local tourism industry. That data includes tax revenues from Doc Warner’s fishing lodge at Excursion Inlet and Alaska Excursions’ tours at Glacier Point. The Haines-Skagway Fast Ferry purchased an additional vessel midway through last year’s season to accommodate an increasing demand. Cruise and ferry visitor traffic is projected to increase by at least 17.5 percent this year.
“As tour operators will point out, the effects of visitors impact other sectors,” borough finance director Jila Stuart said. “They buy groceries and increase retail sales or they stay in hotels.”
Doc Warner’s owner Lynda Battenfield said last season was better than previous years, and they expect business to grow this year.
The Haines Highway reconstruction project also brought more people to town last year, although Stuart said fuel associated with the project wasn’t subject to sales tax.
Retail sales, the borough’s largest sales-tax revenue source, saw a 6 percent increase—about $725,000 more in retail sales. Petroleum and auto reflected a 29.9 percent increase, roughly $1.6 million more spent in the industry last year compared to 2017.
“It looks like most of the (petroleum and auto) businesses were up in 2018 compared to 2017, but fuel sales definitely seemed up April through September 2018 compared to 2017.”
Construction saw a 16 percent increase, about $600,000 more in construction sales.
Business activities including services, short-term lodging, and gift shops and art all reported increased sales-tax revenues compared to 2017.
Despite two new restaurants opening in town, eating and drinking tax revenues remained flat. Long-term lease tax revenues saw an 18 percent decrease, however Stuart said one business in that category was sold and entered into a different category.
If that business had remained in the long-term lease category, revenues would have increased, Stuart said.
In 2017 sales tax revenues increased by 6 percent compared to 2016, the biggest jump in four years.