The Haines Borough Assembly will likely make changes to the proposed seasonal sales tax ordinance that could go before voters this October, with most saying the current ballot question is too complicated.

“I voted against this and the reason I did is because I could not understand it,” assembly member Jerry Lapp said at Tuesday’s finance committee meeting. “And if I can’t understand it, I don’t think a lot of the public is going to be able to understand it.”

The proposed ordinance lists various sales taxes rates that would be changed seasonally, cuts funding to tourism and economic development and reallocates funding to capital improvements on a seasonal basis. The ordinance was developed with the aim to cut taxes for wintertime residents and capture additional revenue during the summer months when more people are in town. Assembly members also wanted to raise funds for aging infrastructure.

Liz Cornejo said it’s unlikely year-round residents would benefit from a seasonal sales tax, given that people likely spend more money during the summer. “I don’t know if it’s a fair assumption that people will have the same spending patterns,” Cornejo said.

Although no motions were made at the finance committee or Tuesday’s assembly meeting, members addressed a range of options including creating a single tax boroughwide and exempting food and or fuel.

“The biggest complaint I’ve heard is cutting the tourism budget in half,” Mayor Douglas Olerud said. “People would rather see us spend more of the tourism dollars collected rather than cutting it in half.”

Assembly member Caitie Kirby advocated exempting food and heating fuel.

“I’m a big fan of the idea of having a flat tax and removing tax on food items and heating fuel,” Kirby said. “It’s something that would benefit the locals. How can we justify saying we’re raising the taxes but also benefiting the local population who stick around all year? That’s a really good way to do that.”

Borough finance director Jila Stuart said sales tax exemptions on food are common across the U.S., noting that few states impose sales taxes on groceries. Exempting food, she said, would accomplish the goal of giving a break to year-round residents.

“The more I think about this the more I think exemptions for food seem to be very common,” Stuart said. “Seasonal taxes seem to be uncommon. Having some sort of exemption for food in lieu of seasonal tax kind of accomplishes the same thing. If it was accompanied by an increase in the tax rate, it could increase (revenues for capital projects.)”

Assembly member Cheryl Stickler said if the goal was to raise funds for infrastructure, exempting food and fuel wouldn’t work.

“If we’re offering multiple exemptions, then where are we going to be coming out ahead? We probably generate quite a bit of money on sales tax from food and fuel.”

Assembly members asked Stuart to learn how much the borough collects in taxes from food and home heating sources including wood, heating oil and propane.

Hardware store owners Chip Lende and Glenda Gilbert are opposed to the seasonal tax. Lende said raising the tax in the summer would disincentivize local shopping.

“So many of us (that) are here year-round rely on our summer sales to carry it through,” Lende said. “It’s just going to push people to buy from Home Depot. It’s true of building materials, groceries, everything. It doesn’t serve any purpose but to throw money out of town.”

Gilbert said the proposed sales tax rates would make accounting difficult for businesses and borough staff. “It will make it difficult for the retail hardware and building supply industry to not only accommodate the current sales tax exemptions with regard to construction permits but accepting returned merchandise purchased at a different sales tax percentages. This is an accounting nightmare.”

IGA owner Mike Ward is opposed to any tax increase. “Why doesn’t our government learn to live within their means?” Ward said. “I am not in support of it. It is a waste of time.”

The CVN reached out to several tour operators, but they did not reply to questions by press time.

The assembly must pass the ordinance at its Aug. 24 meeting to get it on the October ballot.