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Story last updated at 10:41 PM on Wednesday, September 23, 2009

Homer Proposition 1:

How can it be right when it feels so wrong?


Homer Ballot Proposition 1, which voters will decide in the Oct. 6 municipal election, feels like a trick question. After all, it was just a year ago that 60 percent of the voters throughout the Kenai Peninsula Borough and 67 percent of those in Homer, approved a tax holiday on nonprepared food items. The Homer City Council could have followed in the steps of other peninsula cities and allowed the city sales tax on nonprepared food to continue, but it didn't. The council followed the direction voters gave.

The council knew in doing so there would be consequences. It's Finance 101, whether you're balancing the family's or the city's budget: Less money to spend means you can't do everything you once did. If the council thought removing the city sales tax would have dire ramifications for the city and residents, council members should have taken the heat and kept the sales tax in place.

Just as council members knew there would be consequences, voters also knew when they approved the food tax holiday there would be consequences. Their "yes" vote meant they were either willing to do with less -- enjoy fewer city services -- or they believed that the tax holiday would provide the push local government needed to tighten its belt and focus its priorities.

Has anything changed in the past year that would make voters change their minds?

By putting Proposition 1 before voters, the city council has created a no-win situation. Saying "no" feels like rejecting motherhood and apple pie.

Saying "yes" feels like caving in to a spoiled, stubborn child or being bullied to say voters last year were stupid and a year later they've wised up.

Either way, it just feels wrong. That the proposition is before voters is proof that the city needs a comprehensive, fair, consistent tax policy. Ideally, that policy will take into account what the borough and other cities on the peninsula are doing. In the meantime, residents must wrestle with the sound arguments on both sides of this issue.

Arguments favoring a "yes" vote include: The city's tax burden should be shared among property and sales tax and other fees. Sales tax means people who don't live within the city limits help pay for the services they use. Alaska's tax burden in general is not onerous. In fact, the Tax Foundation, a nonpartisan, educational organization based in the nation's capital, said that this year residents of Alaska had the lowest average tax burden in the nation because "of their modest incomes and extremely low state and local tax burden." Cuts being proposed in the city's draft budget have the potential to hurt Homer's quality of life. Passage of the proposition doesn't mean no cuts to the city's budget, it just means the cuts will hurt less. The proposed sales tax on nonprepared food items from Sept. 1-May 31 is only 3 percent, lower than the 4.5 percent levied during the summer months, so residents still are receiving a tax break. Residents choose to live in a city because of the services that city provides; most are willing to pay for those services. Most of the services also are here because residents asked for them. Those who want fewer services (and taxes) could and should choose to live outside the city limits. At best, the tax holiday is symbolic; it is unlikely this particular tax relief makes or breaks anybody's budget.

Arguments favoring a "no" vote include: Residents voted on this issue a year ago. It is poor public policy to keep bringing an issue before voters until those in power get the answer they want. Economic times like these beg for new ways of doing things. Asking to establish a smaller tax on nonprepared food items for nine months out of the year a year after voters approved no sales tax on nonprepared food items for nine months out of the year isn't exactly a new way of doing things. Businesses are re-inventing themselves during these challenging economic times. Shouldn't government do the same? A tax on groceries is regressive; it's time to take a look at Homer's tax structure. Paychecks in Homer are not keeping up with the high cost of living here, so residents are making adjustments. The city should do the same. Last year's vote indicated that people were willing to do with fewer services if it meant paying less in taxes.

While it feels wrong to be voting on the issue, there is no wrong in the outcome of the vote. Either way, the Homer City Council will get some direction from voters. Again.

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