Last Wednesday evening, the City and Borough of Juneau Assembly Finance Committee agreed to add heat to a long-simmering topic and consider whether food sold in the borough should be subject to sales tax.
Citing rising inflation, a growing fund balance in city coffers, and an overall desire to reduce the cost of living in Juneau, committee members agreed the time is right to explore the issue and will revisit it in March.
According to Jeff Rogers, CBJ finance director, prior assembly members have considered repealing the tax on food over the last 20 years. He said three special committees or task forces have reviewed the idea and advanced it for further study.
“In all of the documents I found and reviewed, I find no instance where the Assembly decided against removing sales tax from food. In all cases, the concept was discussed and then appeared to die under its own weight as other priorities became more pressing,” Rogers told committee members.
Rogers said that the city could lose significant revenue — about $6 million a year — by exempting sales tax. He also cautioned that defining which foods are exempt is “contentious and emotionally charged.”
Assembly member Maria Gladziszewski said she felt the time was right to revisit the issue — even with the topic’s difficulties.
“I don’t think we should put it off one more time. I would like to see this assembly take some time to work on it. It’s not going to be easy,” she said, adding that determining how to make up the lost revenue could prove a difficult task.
Assembly members Michelle Bonnet Hale, Alicia Hughes-Skandijs, Greg Smith, Christine Woll and Carole Triem agreed with Gladziszewski’s sentiments.
“I appreciate that it’s a big lift, but this is a thing I really think we should work on. There are folks who are really going to benefit from it. I’d love to see us work on this and get it accomplished,” Hughes-Skandijs said.
Mayor Beth Weldon and Assembly member Wade Bryson said they agreed in principle. But, they said they have concerns about moving ahead at this time when the economy is still uncertain from the pandemic.
“I’d like to give this back to the community, but the next couple of years are going to be pretty tough,” Bryson said.
Weldon pointed out that much of the money the city is holding is a result of federal relief.
Ideas for making up lost revenue include eliminating other exemptions or exempting food from sales tax but increasing the overall sales tax rate to 6% either seasonally or year-round.
Increasing the tax rate requires voter approval and could appear on the October ballot if the assembly decides to pursue that option.
Contact reporter Dana Zigmund at dana.zigmund@juneauempire.com or 907-308-4891.
