The Skagway Borough Assembly approved its 2019 budget at a meeting on Thursday. Assembly members approved a three-month sales tax holiday and a wage increase for municipal employees alongside other budget items.  

Since conducting a wage study in 2007, the municipality has monitored increases to the cost of living and made adjustments to the employee pay scale accordingly. These adjustments, known as a cost of living allowance, happen sporadically at the discretion of the assembly. The last time the borough increased the cost of living allowance was two years ago.

In principle, assembly members expressed support for raising wages for municipal workers in order to compensate for increased living expenses in Skagway.

However, Assembly Member Steve Burnham Jr. said that while he supports an increase in wages, he thinks that a cost of living allowance needs to be updated more regularly.

“We should either decide to keep up with it or not ever do it,” Burnham said. “Rather than it comes up one year and we go, ‘We don’t want to do it, so we’re not going to do it.’ Every time it comes up it gets bigger because we’re getting further and further away from the increase would have been had we just kept up with it.”

Assemblyman Dave Brena agreed, saying that in the future the borough could attempt to build these regular increases into contracts with municipal employees.

Despite these reservations, the assembly voted unanimously to implement a cost of living allowance increase of 2 percent. This will cost roughly $95,000 annually.

An ordinance to implement a sales tax holiday was also on the agenda for the meeting Thursday. The proposal aimed to encourage local shopping during the holidays by eliminating sales tax on all retail sales taking place between November 1st and December 31st.  There was some disagreement over the period of time that the holiday should be in effect.

Assembly member Dan Henry made a motion to extend the proposed sales tax holiday from two months to six months. He said that the Borough should take any opportunity it can afford to give a break to the citizens of Skagway.

“If we as a city government can afford to give any benefit at all to the local citizens of Skagway, I think we should never miss the opportunity to do exactly that. How this was paired down, I’m really not sure. It certainly is not the case that we can’t afford to do so. We most certainly can afford to do so,” Henry said.

Steve Burnham Jr raised concerns about the loss of revenue. He said that if the sales tax holiday were to be extended from October to March, the borough would collect roughly 129,000 dollars less in revenue.

Assembly member Tim Cochran also mentioned that citizens of Skagway already benefit from one of the lowest mill rates for property tax in Southeast Alaska.

Henry countered that only property owners benefit from that low mill rate and those who don’t own property deserve a break as well.

“Somebody who pays rent or is rooming somewhere, what have you, somebody who doesn’t own property of course doesn’t benefit whether the mill rate is at 7, 17 or 27,” Henry said.

The amendment to extend the sales tax holiday by four months failed 4-3, with Mayor Monica Carlson breaking the tie.

After the vote, Assemblyman Orion Hanson made a motion to extend the proposed sales tax holiday by one month, from October 1st to December 31st. That motion passed 4 to 2 and was approved as the final version of the sales tax holiday.

Other budget items that were approved include a $1.3 million loan for the Redwood Water Tank project and $888,000 in funding for the Pullen Creek stream walk. The stream walk funding was approved on the condition that the money is spent on improvements to the existing walk, rather than the extension planned for phase two of the project.

The improvements include replacing the footbridge south of Pullen Pond, constructing a dock on the pond and creating a series of informational signs.