The Kenai Peninsula Borough Assembly decided to place a proposed 10 percent bed tax on the ballot for this October at its June 18 meeting, but Mayor Charlie Pierce shot it down with a veto before the assembly meeting Tuesday. He says he doesn’t support a targeted tax on a specific industry and that a bed tax could deter visitors, among other reasons.
The assembly split down the middle on whether to override the veto, with four members on each side and assembly member Kelly Cooper abstaining because she owns a lodging business. Assembly members Willy Dunne, Dale Bagley, Hal Smalley and Brent Hibbert supported it. Without enough votes to override, the bed tax will stop at the assembly.
Lodging businesses and other tourism-based business owner opposed the bed tax, saying it would drive away business and was unfair to specifically target them. The assembly had been looking for a way to help fund the school district, and the bed tax would have raised an estimated $3.3 million. In Homer, where the tourism industry drives the economy, the bed tax raised significant controversy.
Smalley and Dunne tried to revisit Cooper’s conflict of interest determination, but she held to it, saying it wouldn’t be fair for her to suddenly participate in the vote now. The assembly split 4-4 again on her ability to participate, with the same votes on both sides.
Bagley says the voters should have a chance to vote on the bed tax, as they haven’t been able to since 2005. In contrast, the borough has voted twice on raising the sales tax cap in the last three years, failing both times.
“If something is going to go to the voters, I think the bed tax has a better chance of passing," he said.
Assembly member Brent Hibbert expressed some frustration at the veto. He says this was the assembly’s solution to not having enough money to fund schools, and that Pierce’s veto seems to imply that he is trying to cut schools no matter what the assembly wants to do.
“I think we did own it,” he said. “We passed it, and then he vetoed it. And next we’re going to come back again, and we’re going to be deficit spending.”
School funding has been a major issue for the assembly this year, with the bubbling budget cuts at the state and pressure from the borough administration to cut expenses. The assembly agreed to fully fund schools for the coming year, but with limited tax revenue and other operating expenses to pay for, it’s been a source of tension.
