October 02, 2006
Monday

An important thing to remember is that the vote this Tuesday is not about reforming Ketchikan's tax code. It's about the choice this community gets to take care of its own needs by providing funding for the White Cliff Center. This community project has been thoroughly-researched and has lots of community support (almost 400 names on that list of endorsements, to start with). In my opinion, it will be a place for people of all ages to participate in healthy community activities year-round.

Wow! An expensive, full-page ad by the Downtown Business Association (DBA), now that got my attention! After reading the ad though, I'm really curious. Who is in the Downtown Business Association, and which of the downtown businesses do they represent? The group just popped up to formally take a public stand on tax issues, and so far, all of the downtown businesses I've talked to were under the impression that the organization has been inactive or defunct for the past several years. Trying to find out more about this group, I searched the Alaska Public Offices Commission website to learn when it registered, or who their contributors are. Oddly, this search resulted in no records, which is noteworthy.

If you or your business is active in the Downtown Business Association (DBA), it'd be great to hear from you, to find out more about who the group represents, what its goals are, and how it operates. Are there dues and members, and what businesses are involved? Are there open meetings and officers, and who signs the checks? How are decisions made? Of notable importance, who is responsible to ensure that the group is acting in accordance with state campaign disclosure laws? That would all be useful information, to also help the community evaluate the validity of the claims that have been put forward, and to get a sense of how many people and businesses the DBA actually represents.

Speaking as an individual taxpayer of both sales and property tax, and as a year-round resident, I appreciated the sales tax examples presented by the DBA. It got me wondering though, so lets look at the math supporting the somewhat misleading claim that Ketchikan is the "most expensive place to shop in Southeast Alaska," implying that the small increase proposed would actually send business elsewhere. To analyze this claim, let's actually compare apples to apples -- what someone would actually pay in sales tax in different cruise destinations, using, say, a $7500 necklace as an example:

In Skagway, the tax paid would be $300 (4% sales tax, no cap.)
In Juneau, the tax paid would be $375 (5% sales tax, $7500 cap.)
In Ketchikan, the tax would be $60 (6% sales tax, $1000 cap.) With the proposed increase, it would be $65.

Hey, let's do our shopping in Ketchikan!

Of course, it's true that on a $100 purchase, the comparison is $4, $5, and $6, but without also analyzing the local property tax rates, we don't know what the average taxpayer in those communities pays. Fortunately the state of Alaska helps shed some light on that. From: www.dced.state.ak.us/dca/osa/pub/05Taxable.pdf, by my reckoning, we see a clearer picture of the cost of property taxes from 2005 in the same communities:

Skagway: $1,538 property tax per capita
Juneau: $1,059 property tax per capita
Ketchikan: $873 property tax per capita

Adding in the combined property and sales taxes we get:

Skagway: $6,403 combined sales+property tax per capita
Juneau: $2,127 combined sales+property tax per capita
Ketchikan: $2,069 combined sales+property tax per capita

Yeow! It's not only a great community here in Ketchikan, but there are some other real benefits as well!

So, should Ketchikan raise the sales-tax cap? An interesting policy discussion. The explanation often offered for a cap on sales tax is that local merchants of larger ticket items - appliances, boats, cars - are better able to compete with Seattle merchants with the cap in place. Should the sales tax be seasonal? That's another interesting and valid discussion. Some businesses assert that it would be a headache to administer, others think it's a great idea.

With the sudden flurry of activity, is the DBA actually advocating raising the cap, implementing a seasonal sales tax, or offering other solutions? If so, who do they represent and let's get them involved and working TOGETHER with other interested community members and elected officials to figure out what's the tax structure that best balances a range of community interests!

Again, I'd like to point out that the vote on Tuesday is not about reforming Ketchikan's tax code. It's about the extraordinary opportunity before Ketchikan to make our community a better place to live and work year-round. I'll be voting yes on propositions 1 and 2.

Forrest Gibson
Ketchikan, AK - USA

Received October 02, 2006 - Published October 02, 2006

About: "Local resident, property owner, musician and technology consultant."

 

Send A Letter -------Read Letters

E-mail the Editor at editor@sitnews.us

Sitnews
Stories In The News
Ketchikan, Alaska