In a 3-2 vote, the Skagway Borough Assembly last week failed to send a one-percent sales tax increase to a public vote. The tax hike’s purpose would be to help the municipality pay for major projects. It would raise sales tax up to six percent from April to September and to four percent in fall and winter months.
It all started with the wish for a pool. Community members expressed support for a six-lane pool along with a hot tub and therapy pool. The ‘aquatic wellness center’ would be part of the recreation center expansion.
The proposed sales tax hike was originally meant to fund that aquatic center. But discussion about the long list of expensive projects Skagway is taking on prompted the assembly to expand the scope of the sales tax increase to pay for loans and bonds generally. Assembly member Jay Burnham tried to reverse that change.
“I honestly don’t think a lot of people want a general tax,” Burnham said. “But a lot of people in town I feel want a swimming pool and want an expanded rec center and the things that go with it.”
At previous assembly meetings, members of the public did say they wanted a pool. But the supporters were not at this meeting.
“We can’t afford a swimming pool at this time,” said Mavis Irene Henricksen.
“I think we’re looking at putting a huge burden on the people of this community for what little value you get,” said John Tronrud.
“This is gonna come back to bite somebody,” said Viola Gazzara.
They questioned whether it was prudent to levy a higher tax on residents and visitors to Skagway for what they consider a luxury. The sentiment among some assembly members was the same.
“Rec center’s about $550,000 a year and they bring in about $100,000. That’s a big subsidy,” said Tim Cochran. “We do not have the luxury of a population that can maintain our enterprise fund so we have to subsidize it. But as Mr. [Tim] Bourcy said a couple meetings ago, we’re creating a welfare state here in Skagway because everyone expects us to pay for everything and that this money is going to keep coming in without a bottom. But there is a bottom.”
Assembly member Angela Grieser responded.
“The large group of people that I’ve been talking to want to pay more taxes to pay for it,” she said. “They want to pay for it, they’re not asking for it to be given to them. And I don’t find any harm in letting it go to vote.”
If the assembly were to approve a sales tax hike, it would need to go to public vote. Jay Burnham’s proposed amendment to focus the tax increase on funding the aquatic center failed.
Jay Burnham and Grieser voted against the ordinance. Cochran, Spencer Morgan, Steve Burnham Jr. voted in favor. The ordinance failed, because it needs four affirmative votes to pass. Dan Henry was not present at the meeting.
The conversation about the pool is not over. The assembly tasked an ad hoc committee to come up with recommendations on the recreation center expansion design options. The committee meets Tuesday at 1 p.m.
Speaking of other expensive projects on the horizon for Skagway, the assembly approved the guaranteed maximum price in the contract with Bettisworth Architects and Dawson Construction for the new public safety facility project. The architects estimate the project will cost no more than $12.9 million.
Gateway Project Manager Chad Gubala was at the meeting to talk to the assembly about how to use about $9 million in state grant funds for port improvements. Since voters rejected the tidelands lease with White Pass and the assembly voted to suspend work on the Gateway Project, Gubala is looking at other ways to use the state funds.
“You’ve got $9 million of grant funds available for port infrastructure option, granted we have limited options on what we can do,” Gubala said. “This is where you’re gonna be making your money, so this is a choice you want to make prudently.”
One major component of the Gateway Project was to build a new floating dock to accommodate a larger class of cruise ships. Gubala said the municipality could use the state funds to ‘procure’ a floating dock, and possibly place it at the ferry terminal for combined use. Another option would be to use the grant money for small boat harbor improvements that could also accommodate heavy haul industry. Gubala says companies such as Casino Mine expressed interest in using Skagway’s port for heavy haul operations.
The final option is to give the grant funds back to the state. Gubala asked the assembly for direction as soon as possible, because the deadline to spend that money is just six months away.