The City of Homer held its second public meeting Wednesday to collect residents’ sentiments for revenue options that could eliminate the city’s budget deficit. The Revenue Solutions Town Hall Meeting drew a little more than 55 city residents. KBBI’s Quinton Chandler has more.
The Revenue Solutions Town Hall Meeting relied on the same polling system used by the city in its Closing the Gap Town Hall held in July. Classroom Clickers, which are handheld remotes, were distributed to each person in the audience. Audience members used their clickers to vote against or in favor of a set of budgetary options the city council is exploring. Homer Mayor Beth Wythe says the meeting made it clear residents want the city to find a viable solution.
“People are not interested so much in a bare bones budget as they are in figuring out a way to create revenue that will allow them to maintain a reduced budget,” says Wythe.
The revenue options to consider were: raising the property tax mill rate, eliminating the City of Homer $20,000 Property Tax Exemption for Primary Residence, reinstating a seasonal sales tax on non-prepared foods, raising the sales tax rate, employing a 1% seasonal sales tax increase, and lastly, repealing or temporarily suspending the Homer Accelerated Roads and Trails (HART) Fund. The HART Fund was created to pay for city road and trail improvements. The most popular options were increasing sales tax by 1% during the summer months and using city revenues that would normally be dedicated to the HART Fund to fill the budget deficit.
“Either one of those items would make pretty strong headway into resolving our current near million dollar revenue shortfall,” says Wythe.
Homer resident John Velsko is strongly against raising sales taxes year round and he’s also wary of raising them during the summer months.
“The state, because of their fiscal predicament, are talking about a state sales tax. We’re already at 7.5% combined with the Kenai [Peninsula] Borough and the city sales tax. It becomes onerous on people,” says Velsko.
Velsko did vote to use the HART money.
“I think if they put it to the voters most voters would say do we need to keep $7 million in a fund that we’re not using most of the time. The sales tax revenue that it siphons off would be just about enough money to plug the gap,” explains Velsko.
Mayor Wythe says it would take a vote of the people to tap into the $7 million HART Fund. But she believes city residents were more in favor of suspending the fund and using its allotted sales tax revenue, not dissolving it completely.
“Because everybody was recognizing that we still have roads to maintain. We still have roads to build. We still have trails that we would like to see built. So we need some money to still be available and so the $7 million that is currently available would be available for those projects or a dire needs project that might come up during a suspension period,” says Wythe.
In terms of immediate cash raisers Scott Adams is most in favor of a seasonal sales tax on non-prepared foods, a 0.5% - 1% seasonal sales tax increase, and a bed tax which requires the borough’s blessing.
“But, what I’d really like to see is more businesses come in and not just people being taxed. I think that’s a bad way to go because it affects a lot of people and it doesn’t give people a good feel about the city,” says Adams.
Adams also believes the City of Homer could scale back its services to adapt to the current fiscal climate.
“I’d like to see the city go back to 1985-1986 when the price of oil dropped to $8-$9 per barrel. See what the city did and maybe take some items from that learn something and go from there,” says Adams.
Mayor Wythe warned against severely downsizing city services. She says the fallout would be felt most by city employees.
“The employees of the City of Homer have jobs because they have to support their families as well. I don’t believe other people in the community would look at taking several hundred dollars a month per year reduction in income and not be willing to start to look for another job,” says Wythe.
Residents did vote on the question of not raising new revenues and reducing the deficit by only cutting city services. The majority voted against that option.
