Bed tax measure rises

Assembly may introduce revenue-generating idea

Posted: Monday, January 31, 2005

Assembly member Betty Glick of Kenai has proposed an 8-percent bed tax on hotel and motel rooms rented for less than 30 days as one way to counter the loss of state revenue-sharing dollars.

"In view of the pending budgetary issues facing the Kenai Peninsula Borough and the ongoing quest for solutions, I am submitting this ordinance (2005-05) for discussion purposes, and for consideration by the assembly as one potential option for increasing revenues," Glick said in a memo to the assembly.

Municipalities across the state use bed taxes, she said, adding the ordinance is based on transient accommodations tax provisions in the Matanuska-Susitna Borough code.

Approval of such a tax would ultimately be up to voters. Bed taxes are considered sales taxes and must be ratified at the polls. The ordinance, which is up for introduction Tuesday, includes a provision to put it on the Oct. 4 ballot.

Glick has asked the borough's legal department to research whether a portion of any bed tax collected inside cities could be returned to those cities as if they'd imposed a bed tax of their own. The idea, she said, would be to make any bed tax levy uniform across the borough.

The borough administration is analyzing Glick's measure. However, because of various intricacies of the sales tax code, there is, as yet, no determination about how much revenue might be derived from the tax.

"We are trying to break it down to see what that would bring in," said Troy Tankersley, accounting supervisor for the sales tax division.

He said the borough likely would have a figure by the time the ordinance gets to public hearing, provided the assembly votes to introduce the ordinance Tuesday.

Glick has asked that the proposed ordinance be scheduled for at least three public hearings.

The assembly will conduct public hearings on three pending ordinances at Tuesday's meeting.

Ordinance 2005-01 would make housekeeping changes to the borough code regarding the payment of health insurance premiums. Ordinance 2005-02 would incorporate the goals of the city of Soldotna Action Plan into the 1995 Soldotna Comprehensive Plan. Ordinance 2004-19-33 would rescind an unused $60,000 appropriation to the School Capital Improvement Fund and return the cash to the Land Trust Fund.

The assembly also is expected to introduce Ordinance 2005-06, authorizing the lease or sale of 12.5 acres of land in the Cooper Landing area to Cooper Landing Senior Citizen Corporation at less than fair market value. The land would be used for a senior housing project.

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