An effort to extend the timeframe in which groceries are taxed in the Kenai Peninsula Borough was voted down in the assembly’s meeting Tuesday.
Sales taxes on non-prepared foods in the borough are only applied in the summer tourism season – three months out of the year. Assembly Member Dale Bagley, of Soldotna, proposed extending the tax period to six months — from October through March. The change would have made the borough nearly one and a half million more dollars.
“We are looking at a mill rate increase next year, and I think in two more years it’s proposed to go up again. And this would help alleviate that. In fact, I don’t think a mill rate (increase) would be needed,” said Bagley.
Several members of the public spoke out against the idea. They said the people had already voted on this. The exemption was upheld at the polls in 2008, 2011 and 2015. The majority of assembly members agreed. Kelly Cooper, of Homer, said she liked the idea of picking up more tax revenue from tourists in the spring and fall, but that it was too soon to address the issue.
“When you voted in 2008 and 2010 (and 2015) — I’m sorry you had to keep going back. But that doesn’t mean I don’t believe we should never reconsider it again. There may be a point where we would have to, at some point. I just don’t think it should be every year or every other year,” said Cooper.
Assembly members Gary Knopp, of Kalifornsky, and Willy Dunne, of Homer, pointed out that the borough administration is going to roll out a raft of changes to the entire tax code for the assembly to consider in the next few meetings, so changing sales taxes before holding that larger discussion seemed untimely.
Several members also said they liked an idea proposed by Patricia Patterson, who owns Lucky Raven Tobacco, in Soldotna. She suggested rewriting the sales tax code to more narrowly define what is exempted.
“There are many, many items that I take tax out of that (are) not food. There is no reason that gummy bears should be tax out. Let’s really make it food. And then we can keep this nine month, three month, you can make more money, and I don’t think families are not feeding their family because they can’t get a candy bar,” said Patterson.
Dale Bagley and Assembly President Blain Gilman, of Kenai, were the only members in support of a longer tax period. Gilman, said everyone should chip in to pay for borough services.
“Philosophically, I think it’s important that everybody pay some tax. That if you don’t pay taxes — any taxes at all — you’re not going to value your services. You’re going to want things, but you’re not going to want to pay for them,” said Gilman.
The assembly is expected to begin discussion on tax code changes at its next meeting, at 6 p.m. May 17th at the George A. Navarre Borough Building in Soldotna.