The Haines Borough has less than two weeks to pass an operating budget for fiscal year 2020. As the legislature and governor continue to debate Alaska’s budget, the borough may face a shortfall in funding from the state. Now the assembly is considering a variety of options to make up for the gap, including budget cuts and new taxes.
The borough manager’s budget released in April provided flat funding for most municipal departments. Since then, there have been no significant changes made to the document. However, assembly member Brenda Josephson recently proposed cuts to the library, museum and stipends for the borough assembly.
The proposal was met with resistance from library and museum staff.
At a finance committee meeting Monday, several assembly members discussed a different approach to balancing the budget: new taxes. Assemblyman Tom Morphet proposed putting the question of new taxes to voters.
“This is a starting point. It doesn’t bother me, the prospect that the voters will vote all of these ideas down. What bothers me is that without this interaction directly with the voters, we are not doing very well in terms of facing our future budget questions or our current budget questions for that matter,” Morphet said.
The finance committee voted to send two tax proposals to the assembly for consideration. The first is a retail tax on alcohol and marijuana and the second is a seasonal adjustment to the borough’s sales tax. The sales tax would be lower in the winter and higher in the summer.
An excise tax on marijuana was repealed last year due to concerns that it had a negative impact on local growers selling to retailers. A tax paid by consumers buying the product was proposed as an alternative. Morphet thinks it should apply to alcohol as well.
“I don’t know that it’s necessarily fair to tax one drug over the other. So I like the idea of the same tax on alcohol and on marijuana,” Morphet said.
Not everyone was on board with the tax proposals. Assembly member Stephanie Scott said she was concerned about having a higher sales tax during the summer.
“The time I spend the most money here in Haines is in the summertime because that’s when I have projects that I’m conducting and taking care of,” Scott said. “It’s not going to benefit me at all or other people like me that build in the summertime.”
The Haines Chamber of Commerce met the day after the finance committee meeting to discuss the borough’s budget process. Members of the board agreed that they favored cuts over tax hikes.
Haines residents will vote on the proposed taxes during the October municipal election if they are introduced this summer.
Meanwhile, the borough must pass its final operating budget. There are two more opportunities to provide input on the budget: during the committee of the whole meeting on June 5th and the assembly meeting on June 11th.