Borough puts proposal for seasonal sales tax on hold

The proposal would increase the sales tax during summer months and reduce it during winter months.

Kenai Peninsula Borough voters will not be asked this fall whether or not they support a new seasonal sales tax model that increases the sales tax during summer months and reduces it during winter months. That’s after sponsors on the borough assembly withdrew the motion Tuesday, though they said they’d like to consider the move next year.

The idea of a seasonal sales tax rate was raised and recommended in the final report of the borough’s Tourism Industry Working Group, which met from December to May to consider the impacts of tourism on the borough. An ordinance introduced by Assembly Vice President Kelly Cooper — who also served as vice chair of the working group — says that the seasonal sales tax will increase borough revenues without increasing the cost to borough residents.

A fiscal note by Borough Finance Director Brandi Harbaugh projects an annual increase in revenue of around $4 million, which Cooper says she expects will be translated into a mill rate reduction for borough residents who own property.

But Cooper on Tuesday, during a meeting of the borough assembly’s finance committee, said that since introducing the ordinance in July she’s come to think that the timing “isn’t right.” Instead, she said, she’d like to see community meetings held around the borough this winter to raise awareness and assuage concerns about the proposal. At the start of the assembly’s meeting on Tuesday, she withdrew the ordinance.

Borough Mayor Peter Micciche, also a sponsor of the ordinance, said that he’d like to return to the idea by next year’s election.

“This is the right thing to do for our taxpayers,” he said.

A second proposal, to create a working group to better quantify the potential costs and benefits of the seasonal sales tax, was also withdrawn by its sponsor, Tyson Cox.

A full recording of the assembly’s Tuesday meetings and the text of the ordinance can be found at kpb.legistar.com.

Reach reporter Jake Dye at jacob.dye@peninsulaclarion.com.