As borough officials, staff and residents prepare for less state revenue, assembly members rejected a seasonal sales tax proposal, an idea at least two Haines residents brought to borough staff recently and in the past.
Based on 2017 sales tax revenues, the borough would generate an additional $185,000 if it charged a 4 percent sales tax rate from October to April and a 7 percent sales tax from May to September, borough finance director Jila Stuart said. Nearly 61 percent of sales occurred during those summer months, according to 2017 sales tax data.
Borough residents Don Turner and Rob Goldberg have previously suggested seasonal rate change. Turner suggested the idea to borough manager Debra Schnabel in March. “I thought it would be a good idea if the tourists started paying more,” Turner told the CVN this week. “It’s a way to raise more money without costing local taxpayer a lot more money.
Rob Goldberg suggested a similar idea in 2012, but it didn’t catch on then either. He wrote to borough officials after Turner suggested the tax. “If the governor’s proposed cuts go through, the borough is going to have to consider all options for generating revenue,” Goldberg wrote to the assembly and Mayor Jan Hill. “Increasing the sales tax rate in the summer would put more of the burden on visitors and summer workers. Decreasing the rate in the winter would give residents a break most of the year.”
Assembly members discussed the idea during a finance committee meeting on Tuesday, but did not advance the proposal.
“I’ve gone back and forth in my head about the seasonal sales tax,” assembly member William Prisciandaro said on Tuesday. “In some realms I think it’s good, in some realms I don’t. Even people who live here do some of their major projects in the summer, so it may not fit our economy quite as good as Skagway or other seasonal (economies)” Prisciandaro said.
In Southeast, Skagway and Sitka have seasonally adjusted sales tax rates. Skagway charges 5 percent April to September, 3 percent from January to March and charges no sales tax from October to December. Sitka Charges a 6 percent tax from April to September and a 5 percent tax from October to March.
Charter requires that any changes to Haines Borough sales tax must be voted on by the borough. Assembly members discussed how they could present these changes to voters on this fall’s ballot.
Assembly member Heather Lende liked the idea of a seasonal sales tax, and was in favor of adding it the ballot. Assembly member Tom Morphet and Sean Maidy were opposed to a seasonal sales tax.