The Haines Borough Assembly voted 5-1 to place a proposition on the fall ballot that would reallocate one-half percent of tax proceeds distributed to the tourism and economic development fund to the borough’s areawide general fund.
Currently, a cumulative 5.5 percent sales tax revenue is allocated across five departments: 1 percent to economic development, 1.5 percent to the townsite service area, 1 percent to the areawide general fund, one-half percent to medical services and 1.5 percent to capital improvement projects.
Assembly members said they’d like discuss the reallocation in finance committee so that current tourism projects remain funded.
“I think that this is a good idea in light of the fact that we struggle to spend the balance from that tax,” assembly member Heather Lende said. “However, I don’t want to see it taking away from the current expenditures there at all.”
A portion of the one percent tax pays for the borough’s tourism department, including the visitor’s center, salaries, advertising for town events and the Southeast Alaska State Fair.
This fiscal year, the sales taxes generated a total $628,000 but less than 60 percent of that is budgeted for tourism.
The remainder is allocated to Haines Economic Development Council and operating transfers for things like road improvements.
This year, about $136,000 will remain reserve funds.
Assembly member Tom Morphet opposed the ordinance. He said that the finance committee last winter rejected bringing the ordinance forward, and asked how it ever left committee.
“I thought it was necessary,” Maidy said. “We need some way to pay for our services. We have one fund that we can’t spend all the money on and then we have a bunch of people wondering how we’re going to pay for police outside of the townsite, and this could cover it. This is money that is sitting around doing nothing and I’d like to put it to use.”
In order to spend areawide general fund money on police, the assembly and voters would need to approve a charter change.
Morphet recommended bringing the ordinance back to committee to seek feedback from tour operators.
Lende suggested keeping 60 percent of the tax money in the tourism department coffers and reallocating 40 percent to areawide funds, so the tourism department wouldn’t take any cuts from current funding.
Assembly member Brenda Josephson asked for an analysis in finance committee of an appropriate split so that no programs currently funded with tourism lose out.
The ordinance will come before the assembly for its first public hearing on August 1 at 6:30 pm, and the finance committee Aug. 13 at 5:30 p.m.