The Homer City Council is asking residents to approve a year-round sales tax of less than 1 percent to help pay for the long-anticipated new police station.
The council introduced at its April 23 meeting an ordinance that calls for a year-round, 0.35-percent sales tax to raise funds for the station.
The funds raised through the tax would be used to pay off a $5 million general obligation bond the city plans to purchase. This would cover the majority of the estimated $7.5 million police station project.
Council members debated the pros and cons of several different sales tax options, but eventually decided to go with a lower, year-round tax, saying a seasonal tax at a higher percent would be more harmful to city residents.
“We did go through a number of possible amendments to … this ordinance that we discussed during our Committee of the Whole meeting, in which we realized that a three-month sales tax increase that crosses two quarters was a high tax rate and onerous on business owners,” said council member Donna Aderhold.
The ordinance, which will have its second reading and public hearing on May 14, includes a sunset clause, something council member Tom Stroozas has pushed for in previous discussions about levying a sales tax. The 0.35-percent tax will end on Dec. 31 of the year the city has raised enough money to pay off the $5 million bond.
“What this increase in sales tax will mean to each and every one of us, is for every $100 that we spend, we’re going to pay an additional 35 cents in sales tax, a mere 35 cents,” Stroozas said. “And we are going to get the benefit of a new police station if this bond is approved by the voters, and an opportunity to pay this off early because this tax, based on today’s historical records as far as our annual sales tax collected is concerned, will generate about $40,000 more each year in revenue that we’re going to have to pay for the bond and for the maintenance of the building.”
Council member Heath Smith further amended the ordinance to put the proposition asking residents to approve the bond and sales tax in a June special election, rather than during the regular election in October.
Council members also introduced two more police station-related measures on Monday: one to allocate $102,500 from the Police Station Reserve to fund a 10-percent design, geotechnical investigation and site survey for the police station, and to put up $5,000 from the Police Station Reserve for educating the public about the special election.
Smith also proposed an amendment to the design and survey funding ordinance to remove references to the 10-percent design, which the council approved.
Reach Megan Pacer at firstname.lastname@example.org.