At Wednesday night’s City and Borough of Juneau Finance Committee meeting, assembly members flirted with going on record with a preference for how the state generates revenue.
While they generally agreed that a statewide sales tax is not the best way to generate much-needed revenue, assembly members declined to make that stance official or endorse another method—such as a state income tax—preferring to consider the matter further before proceeding.
City Manager Rorie Watt acknowledged that CBJ has long shied away from taking specific policy positions on state matters. He said that CBJ Assembly members advocated for a broad fiscal plan in the past but stopped short of specific recommendations.
But, he said the time might be right to consider whether the city should take a position in advance of the upcoming Alaska Municipal League Conference later this month, where a hot debate is likely to unfold around the question of the state’s options to generate revenue.
Watt shared a potential resolution with the assembly for consideration. The resolution acknowledges that the state needs revenue but discourages a statewide sales tax as the mechanism to generate it.
CBJ staff and Assembly members widely agreed that a statewide sales tax is not in s best interest.
Watt said that sales tax is traditionally a municipal revenue source and that cities specifically tailor the tax rate to prevent harming local businesses. He said that adding a state layer of taxes could drive up costs for local businesses, force cities to raise property taxes to generate new revenue or cut municipal services.
Assembly members added that a statewide tax is regressive and could hamper local businesses’ recovery efforts.
New Assembly member ‘Wáahlaal Gíidaak Barbara Blake said that Juneau serves as a hub for surrounding areas and a statewide tax could hurt those communities, too.
Assembly membe Wade Bryson called a state sales tax “economically damaging” and suggested including that in any resolution about the topic.
It’s better than nothing, maybe?
Assembly member Greg Smith said he opposes a statewide sales tax but worried that opposing it could send the message that the City and Borough of Juneau doesn’t want to be part of the solution.
“I don’t like sales tax,” Smith said. “ A sales tax is problematic. But, not doing anything could be more problematic.”
Assembly member Carole Triem wondered if supporting a different type of tax instead of sales tax was “outside the wheelhouse” of the assembly.
Assembly member Michelle Bonnet Hale said that she sees taking a position on other taxes as part of the assembly’s scope because the state has shifted costs to municipalities over the years and it’s clear the state needs revenue sources.
Because state lawmakers are unlikely to visit the question until winter, Mayor Beth Weldon and Jeff Rogers, CBJ finance director, suggested a subset of assembly members work together to bring back a resolution that the assembly can consider later this year.
“I agree this needs more work, ” said Maria Gladziszewski, deputy mayor and assembly member.
• Contact reporter Dana Zigmund at email@example.com or 907-308-4891.