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Vote no on sales tax increase
by Samuel Bergeron


June 05, 2004

I support full funding for schools. I believe as does Mr. Landis and others that economic development begins with a school system that is funded and thriving. The measure of my success as a parent and public official will be my ability to instill my children and yours with the love of learning and the tools to be a success as an adult.

The Borough talks about a fiscal crisis and Robert Warner says we have a spending crisis. I say we have an allocation crisis. With that said, I wish let you all know about a little known tax called PILT. Payment in lieu of taxes.

Payment in lieu of taxes is paid from all the customers of Ketchikan Public Utilities directly to the City of Ketchikan in the amount of $600,000.00 every year. In addition to that, Ports and Harbors pays PILT to the city as well in the amount of $150,000.00. I wish to point out that both entities serve the entire Borough, not just the City. What is happening here is the residents of the Borough are paying a direct subsidy to the City. It is a gross misallocation of Borough wide tax dollars. This money goes directly into the general fund of the city and is mostly put into their reserves (bank account) instead of funding schools or perhaps fire and EMS for the Borough. This makes about as much sense as the City paying homage to the Borough for no apparent reason. The proposed sales tax increase will bring in less money than the combined PILT payment from Ports and Harbors and KPU.

Here is a novel Idea; redirect PILT paid by both entities, (KPU and Ports and Harbors) that are Borough wide, to fund schools debt and insurance. No new taxes would be needed and it would reallocate Borough wide funds to a Borough function saving all of us, City and Borough residents, another superfluous tax.

Sales tax is charged to food and residential rent and by in large is not tax deductible as is a property tax. It would also put our merchants at a disadvantage to other cities in southeast as some of their respective sales tax rates are lower. We would lose sales to outside merchants with a lower tax base. Sales tax is an unfair tax; it charges the same tax to the wealthiest and to the poorest. I hate sales tax for that reason alone. The wealthy seem to have an ability to buy where sales tax is not charged and less the fortunate are stuck paying it because they don t have access to these tax free locations. (Seattle for instance)

If we redirected PILT to fund school debt and insurance we could also fund student activities. There would be no new taxes and a gross misallocation of your tax dollars and mine would be well spent funding our schools to the cap where it should be year in and out. Would you Borough residents like to see your tax dollars spent on schools or stashed away in the City's reserves? You tell me and them. Vote no on the well intentioned but unnecessary sales tax increase for schools. We need to pressure the City to stop this outrage called PILT. E-mail and call your city officials and ask them, is it more important to add to the already burgeoning City bank account or hire enough teachers to educate our youth and help make our schools worth going to? I vote the latter. I believe stongly that Borough generated taxes should be spent on Borough wide expenses like education, not going to the City's savings account.

Thanks for listening.

Samuel Bergeron
Ketchikan, AK - USA



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