Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

The motion to include sales tax reallocation on the October ballot died at the Aug. 24 assembly meeting. Even assembly member Debra Schnabel, who had shepherded the proposal through several GAS committees and a previous public hearing, ultimately didn’t support it.

“I will not be voting in favor of adopting this ordinance even though I was the author of it,” Schnabel said. “A critical review of the borough’s tax structure has led many of us to believe that the solution… will require a more in-depth look at the issues.”

The proposed ballot questions would have asked voters about re-allocating some of the 4.5% areawide sales tax revenue from the “tourism and economic development” fund to the capital projects fund. Voters also could have weighed in on increasing the lodging tax – which tourists pay when they stay at hotels or vacation rentals – from 4% to 6%, with the extra revenue directed to tourism and development.

But at the commerce committee meeting on Aug. 16, members had transitioned from discussion of Schnabel’s particular proposal to a conversation about Haines’s approach to tax allocation generally. They discussed the way that the borough must often engage in retroactive logical gymnastics to explain why, for example, road repair is a “tourism expenditure.” Committee members wondered if a system with fewer separately-designated tax funds would allow for more effective spending; they discussed forming a working group to look at the tax code generally, perhaps compared to other municipalities’ systems.

Schnabel also reported on a conversation she had had with Mark Warner, who owns a fishing lodge in Excursion Inlet. The lodge would be impacted by an increased lodging tax, but because it isn’t located in the townsite, the benefit the business would reap from the increased tax is minimal.

Schnabel said that Warner has contributed nearly half a million dollars to the borough in taxes in the last three years, but he doesn’t feel he “gets anything” from the community. Warner suggested the borough could help the enterprise with its solid waste disposal, which has become much more expensive since the cannery there closed.

A contractor that delivers fuel to Elfin Cove twice a month might be able to help if the borough could negotiate a backhaul. Manager Kreitzer will look into this matter and report to the assembly on it later.