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
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
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
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
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.
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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