A 1 percent sales tax that took effect in Haines decades ago is being questioned by local fishermen. The issue was taken up by the Finance Committee last week, and will go to the assembly in the near future. As a result, the question of whether to repeal the tax, which goes toward tourism and economic development, could end up on the October ballot.
JR Churchill brought the question to light at an assembly meeting a few weeks ago. He says the tax has been around too long and needs to be revisited by Haines voters.
“Had I of known that this would be for the rest of my life, I would not have voted for it,” Churchill says.
The 1 percent tax was voted into effect in 1985 to help the borough pay off a legal settlement. That proposition passed 230-207 with the addition that once the lawsuit was paid off, the tax would then go to tourism. Two years later, Haines voters decided again to keep the 1 percent tax for tourism. In 2001, voters decided that the tax money should go toward tourism and economic development. And in 2005, voters elected to have that tax be implemented borough-wide.
Churchill says the initiative should have had a sunset clause, or end date, attached to it.
“What a sunset clause would have done was, it would have given the tourism industry fair warning. In three years, four years, whatever that time frame may have been, six years, this is going to end. So they would have started brainstorming real hard on ‘How do we go about this? How do we alternately fund this?’ But that’s not what happened. Now, it’s like a drug. Free money? It’s tougher to break than crack-cocaine.”
The tax is expected to bring in more than $500,000 this fiscal year. Churchill was one of several fisherman that spoke out against the tax at last week’s finance committee meeting. He says he doesn’t agree with public money going to help fund private industry. And if it does, where’s the share for the commercial fleet?
“You can only be kicked around so long before you get a little ticked,” he says.”And we’re well past that, we really are. This isn’t an incentive, we’re not incentivizing tourism, we’re subsidizing tourism. And we’re doing it with tax dollars.”
But there were plenty on hand that think the tax should stay right where it is. They say that money benefits the whole town.
Leslie Ross is the director of tourism for the borough. She says the money from that tax goes to a lot more than just tourism marketing. And it goes far.
“The 1 percent, I don’t believe is a handout to tourism, I believe it’s an investment,” she says. “For one, it’s paying for a department. And it’s not just paying for the tourism department; it’s going into economic development. I will agree strongly that I think there can be a better utilization of the monies that are going into economic development. I don’t think that was specified: this whole thing doesn’t go into tourism.”
Several tour operators and other tourism stakeholders spoke for the tax. Longtime resident Don Turner owns Turner Construction. He says the 1 percent tax helps Haines in ways people might not realize.
“The community as a whole benefits from the 1 percent,” Turner says. “I know that construction does, and the stores, and everything else. I’m not advocating doing away with the sales tax.”
Chamber of Commerce board president Kyle Gray told the group that there’s a ripple effect when it comes to money spent by tourists. He says that money going into economic development is vital to Haines.
“If we want to have another conversation perhaps later, about different ways that we could use the 1 percent that we collect and different ways that we can spend it on economic development, that would be something we’d be interested in having,” he says. “But at this point, we’d just like to support keeping the 1 percent.”
Both sides made points for and against the tax, and in the end the Finance Committee, which on Tuesday included Tresham Gregg, Diana Lapham and Ron Jackson, voted 2-1 in favor of sending the tax repeal idea to the assembly. Gregg was opposed. The assembly has a quick turnaround on the issue as it needs to pass by its Aug. 23 meeting to get it on the ballot for voters. That means it has to be introduced at an assembly meeting this month.
Churchill maintains that he just wants the idea of repealing the tax to go to the voters. And, he says, from there “let the chips fall where they may.”