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No to Sales Tax Increase
By Samuel Bergeron


August 08, 2006

At their August 7th meeting, the Borough Assembly gave the nod to raising sales tax on everything you buy in Ketchikan by 1/2 % to fund the renovations at the old White Cliff School. The project has merit, but the funding method doesn't.

Next time you go to the grocery store look around, especially at the check out stand. Have you seen anyone who might be struggling to make ends meet? I have. I can't imagine increasing the tax on food and rent on our residents, some of whom are facing challenging financial times for something that is not essential government service. While this project is certainly of value to the community, we need to look at other funding sources. A tax on food and shelter had best be put to use on other, absolutely essential needs the Borough government provides.

Sales tax is another disincentive to shop locally. When you raise the tax you pay locally, you export your local dollars to outside vendors who don't punish you with a 6-1/2% tax. Sales tax removes dollars from our local economy and sends them elsewhere. Those local dollars fund jobs here in Ketchikan. The tax increase will export more of our local dollars south and could be revenue neutral for the Borough with the loss of sales from people who now take the time to shop elsewhere. It's criminal to institute a tax that exports jobs, puts an unfair tax burden on those who can least afford it and widens the gap between those who have financial security and those who don't to fund a project that is not an essential function of government.

Do we now collect sales tax on all goods and services delivered here now? The short is answer is no; not even close. For example: when a tour or excursion on-board the cruise ship is sold, they pay zero sales tax. Our tax code should say that if a good or service is delivered here it's taxable. That would more than fund the Arts Center and possibly reduce the tax burden paid by us locals. Did you know that we pay more in sales tax at the grocery stores than we receive from all tourist operations combined? It's not that we eat more food dollar-wise than the tourism industry sells dollar-wise. It's because most of the tourism economy is not subject to tax because of where the tour or excursion is sold.

You also need to ask yourself the really big question: is the Borough's fiscal house in order? Again, the answer is no. Unlike the City of Ketchikan who has huge budget reserves, the Borough has almost none. They have huge outstanding obligations on Schoenbar Middle School and are hoping for funding from the State to cover some of those expenses as well some claims pending with the participants of the project. The hope for State funding for this project dims with the news that the Trans-Alaska Pipeline will be operating at less than 45% of what the State budgeted for the next year. That severely limits the ability of the State to fund Capital projects. So how is the Borough going to make up the difference? With a tax hike or a severe cut in the services the Borough now provides. This proposed tax increase is fiscally reckless considering we are already over taxed and "You can t tax your way into prosperity".

The steering committee for the White Cliff project asked for a 3/4% sales tax to build and operate the performing Arts Center and Senior Center. The Borough Assembly reduced that to 1/2%. Why wasn't there a discussion to add more participants in the project itself?

The Borough office building is a delapitaded, mold ridden, health hazard. We need a new one. If the Borough decided to include new offices in the White Cliff Renovation project and sell the old building downtown, wouldn't this renovation project be more viable? Their exclusion of this option leaves the unmet need for new Borough offices as well as an additional strain on the Borough s very limited finances to fund those offices in the future.

Lastly, why isn't the Steering committee asking the folks that do have the money: The City of Ketchikan? Why ask the Borough taxpayers, some of whom, like me, are City residents, to fund a project that is inside the City without the City of Ketchikan's financial participation? To me it seems ridiculous to add to your and my tax burden to preserve the City's burgeoning bank account for a project that's inside the City limits.

Make sure before you ask the voters to pay more taxes that we are collecting sales tax from all the participants in our local economy and that we can afford a tax increase. If you bring up the sales tax discussion, it should be about reducing or eliminating the unethical sales tax on food and residential rent, which is largely a tax on the poor. Our existing tax rate is already too high and we can't afford more taxes to expand the Borough government, we're having a hard enough time funding the present level of government we have now.

Thanks for listening.

Samuel Bergeron
Ketchikan, AK - USA

About: "I live and work in Ketchikan and love the State and City I live in.I've served on the Gateway Borough Assembly and I'm the past Tribal council President of Ketchikan Indian Community. I also served on the tribal council as a member. I have six years deliberative body experience. I'm planning to run for office this fall, I am still deciding on the position I will seek."



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