Instituting temporary sales tax increases to pay for capital projects, raising the bed tax and exempting food and heating fuel were subjects of the borough assembly’s Commerce Committee meeting Tuesday.
Committee member chair Gabe Thomas organized the meeting to continue discussing ways to dedicate funds to capital projects.
Borough manager Annette Kreitzer discussed Juneau’s sales tax structure as a model Haines could work from. Every five years, Juneau residents vote to dedicate an additional 3% of its sales tax to various projects such as roads, capital improvements, community grants, rainy day funds and other projects. When the provision is in effect, residents pay a total of 5% sales tax.
“It’s a sunset provision,” Kreitzer said. “Voters decide every five years are these monies, this extra 3% we’re paying, (benefiting) the community. I voted against it a couple times. I voted for it a couple times. It all depends on what you’re seeing when the tax comes up.”
Committee member Debra Schnabel suggested increasing sales taxes for three-year periods to pay for projects.
Mayor Douglas Olerud said the assembly and staff could identify needed repairs and put a sales tax increase on the ballot, suggesting Second Avenue and Third Avenue as a good place to start.
“Pick the worst section of road in the community and see if people will get behind a sales tax to fund it,” Olerud said.
Thomas said he was leery about initiating additional taxes, but supported having voters decide whether a temporary tax hike should pay for projects.
Thomas again brought up the idea of exempting sales tax on heating fuel, firewood and propane during winter months to ease the tax burden on year-round residents. Tax exemptions on heating fuel and food have been discussed since last year.
Schnabel also suggested increasing the borough’s lodging tax, a tax on vacation rentals that are rented for less than 30 days, an increase Thomas also supported.
“The bed tax, I like,” Thomas said. “I want to know more about that.”
Pre-pandemic, the lodging tax generated $129,000.
“It’s not a game changer for us,” Olerud said of the tax. “It’s worth looking into, but we need to be realistic about what we’re going to get out of it as well