Bill Smith, KPB Assembly Member from Homer has introduced Ordinance 2014-25, the “Area wide Transient Accommodations Tax,” also called the “bed tax.” He asks KPB to establish a 4 percent “bed tax” that KPB businesses will charge visitors. It is proposed to collect this tax as a “pass thru” from the KPB to the Kenai Peninsula Marketing Council (KPTMC).
Now let’s peel the onion.
‘The KPTMC currently receives $300,000 per year from the Borough for marketing. This is an NGO (non-governmental organization), receiving taxpayer monies without any financial audit provided. Audits provided by KPTMC to the KPB: none. The explanation for use of funds: Tourism?
Estimates of revenue to be raised by the tax are between $2.0 and $2.4 million. Use of funds? Tourism. This is so absurd it is almost laughable. An additional $2 million-plus to do what?
What is a “pass thru”? It means the KPB collects the tax and immediately transfers the monies to the KPTMC. No checks, no balances — just pass it on. Incredible. Seniors will remember this as “payola in the 60s”; “graft in the 70s”; “corruption in the 80s” and now it is a modern day politically correct term “pass thru.”
The new bed tax is an unaccountable tax to be funneled to an outside organization, with no responsibility for disclosure, except it’s for tourism.
Who markets cruise trips to Seward? Homer? Princess Lodges? The cruise lines.
Who are a majority of people staying at local owned facilities? Alaskans.
Who pays this tax? Alaskans.
Approximately 60 percent of guests staying at local owned KPB facilities are Alaskans.
Let’s try some common sense.
In February of this year, Mayor Navarre announced that the voter approved increase in residential real estate property exemption, along with senior retention of that exemption was forcing the KPB to take $1.3 million out of reserves. He would have to find a way to make up the difference. Restructuring budgets to accommodate the public demands for tax relief would have been the fair and prudent method.
If we really “need” a bed tax let’s direct it to the Borough reserves and stop the negative rhetoric about KPB residents for voting for tax relief; let’s enhance technology access for teachers and students or do both.
If the Mayor and Assembly insist on the bed tax, Mayor Navarre and all Assembly members should be required to execute an agreement to not accept a position or money from KPTMC, now or after leaving office. KPTMC funds should be forfeited for violating that agreement. The forfeiture must be immediate and non renewable.
In addition, before KPTMC receives any funds from KPB, it should be required to provide an audited financial statement from a recognized accounting firm.
Ordinance 2014-25 should be defeated 9-0. The stench for the potential of financial malfeasance and corruption is way too obnoxious. There are many politicians spending time in federal facilities for less financial malfeasance than this.
Dear Mr. Mayor and Assembly members, vote no, on Ordinance 2014-25.
