The Haines Borough Commerce Committee is considering a temporary tax exemption on groceries in Haines. While the committee still needs to iron out details and hasn’t made any recommendations, a Tuesday discussion centered on a suggestion to eliminate sales tax on groceries, or provide tax rebates, for three months in the winter.

Committee member Carol Tuynman proposed the idea, which she hopes would aid low-income families, simplify the borough’s tax structure and help the borough collect data to inform future discussions about tax reform.

“I just feel like we should try it, or at least we should recommend to the new assembly to try it, because if we don’t have any data about food, we can’t rely on any other communities’ buying or spending habits. We have our own unique way of living here,” Tuynman said.

Committee member Gabe Thomas favored the idea, but said the committee should do more research and discuss the suggestion again at its meeting next month before making a recommendation to the Haines Borough Assembly. Thomas said the rising cost of shipping, due to increases in fuel prices and inflation, would make grocery shopping especially burdensome this year.

“It’s just going to keep putting a squeeze on people in Haines that live here year-round. Something like this (tax break) could help make or break some people through the winter,” Thomas said.

Grocery sales usually account for about 15% of the borough’s total sales tax revenue, fiscal officer Jila Stuart said at the meeting. In a normal, non-pandemic year, a three-month tax holiday might cost the borough around $112,500 but probably less because fewer groceries are bought in the winter, when the holiday would be in effect.

Mayor Douglas Olerud warned that establishing a tax break this winter, while grocery costs are rising due to inflation, would make judging the effect of the holiday compared to previous years difficult. “It’s going to look like grocery numbers are up when it’s just inflation changing dynamics,” Olerud said. “It’s a tough decision. There’s a lot of value to the residents, but it would have an impact on the borough,” he added.

Soon-to-be assembly member Debra Schnabel suggested that the committee consider a tax rebate instead of a tax break so that only people who really need the money would take advantage of the program and the borough would lose less revenue.

Thomas cautioned that some residents, particularly those whom the tax break would target, might not have time or energy to file for a rebate.

The Haines Borough generated $1.2 million, or 61%, more in sales tax than it had budgeted for the 2021 fiscal year.