Assembly sends food tax exemption change to voters

Editor's note: This story has been updated to correct errors. The non-prepared food item tax measure approved by the assembly included an amendment to put the question to voters on the October municipal ballot.

 

The Kenai Peninsula Borough will ask voters whether the seasonal sales tax exemption on non-prepared food items should be reduced to six months out of the year. The move would extend the period the 3 percent sales tax on groceries is collected by three months — it will be collected from April 1 through September 30.

On Tuesday the Kenai Peninsula Borough Assembly approved the ordinance after an amendment was passed to send the measure to voters on the regular election's ballot. It will make the allowed collection period the longest it has been in more than six years.

Assembly member Kelly Wolf also requested a reconsideration vote on the ordinance set for the next assembly meeting April 21. 

The ordinance will appear under unfinished business on the next assembly meeting's agenda, said Borough Clerk Johni Blankenship. The assembly will have to decide whether to approve the reconsideration vote before it is retaken, she said. 

Soldotna city council member Linda Murphy, who spoke as a resident during the assembly meeting, thanked assembly president Dale Bagley for proposing the ordinance.

Bagley’s ordinance was an alternative to one proposed by assembly member Blaine Gilman, which would have allowed the borough and borough cities to tax food nine months of the year.

Murphy said she would have preferred Gilman’s plan, but six months would also be beneficial.

Soldotna City Manager Mark Dixson said if the assembly hadn’t passed the ordinance, Soldotna residents would likely have seen a property tax increase. The increase would be an alternative form of revenue generation, he said.

If the city chose to raise its mill rate, and the borough raised its rate as a way to offset local fiscal issues, Soldotna residents could have seen a double increase in property taxes, Dixson said.

Soldotna resident Daniel Lynch spoke at the meeting. He likened food to oxygen and asked the assembly to focus on other avenues of generating funds.

“If you don’t care about morality, consider democracy,” Lynch said, referring to the choice of borough residents to vote down the extended period of allowed collection six years ago.

Resident David Brighton said he felt a grocery sales tax was an appropriate way to increase revenues. His biggest concern was the current proposed statewide cuts to education.

The seasonal exemption currently in place, passed by voters in 2009, cost the borough nearly $4 million in potential tax revenues annually, according to the ordinance.

 

Reach Kelly Sullivan at kelly.sullivan@peninsulaclarion.com.

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