A proposal that would do away with restrictions on how two local sales taxes are spent could face voters in the fall.
Currently, the Haines Borough levies a 1% sales tax that can be spent only on tourism and economic development and a half-percent tax designated for emergency medical service.
Last year, the borough collected about $677,000 from 1% of sales tax, but more than $93,000 designated for tourism and economic development went unspent because the borough couldn’t agree on projects to fund or have capacity to hire more people to take on new projects, said assemblymember Debra Schnabel, who is sponsoring the ordinance.
Schnabel said her proposal would fix the problem of unspent money by putting most sales tax revenues into the borough’s general fund, allowing it to be used for any purpose.
“This is a small administrative tweak, as far as I’m concerned,” said Schnabel.
Some members of the business community voiced hesitation at the proposal, which they feared could lead to reduced spending on economic development.
Mayor and business owner Douglas Olerud said he was concerned about taking away money earmarked for economic development. He said the borough has been considering hiring someone to work fulltime to promote more for things like remote jobs, commercial fishing, resource development, fish processing and lumber.
The Haines Economic Development Corporation receives about $125,000 per year, something Olerud said he would like to see increased. “It’s all been centered on tourism for the majority of the time. There’s a group of people in the community that would like to see that be more well-rounded.”
Haines Chamber of Commerce executive director Andrew Letchworth didn’t have a firm position on Schnabel’s proposal this week. “I think just balancing to make sure that we are fully using — to the capacity that we can — that money for growing the economy,” Letchworth said.
Schnabel said the proposal is not about taking money away from economic development or emergency medical services. She said it’s about giving the borough more flexibility to spend money on projects that it wants to pursue.
“We still have those functions in government, but we’re not going to have them tied to a specific sales tax number,” she said.
She said additionally, the change would make it easier for the public to understand the borough’s budget documents.
If it passes the assembly, the proposal would go to voters in the October election.