No rest for bed tax debate

Business owners, private citizens voice support, opposition

Posted: Thursday, March 24, 2005

The proposed Kenai Peninsula Borough bed tax issue was brought to the Kenai and Soldotna chambers this week.

Both chambers hosted forums at their weekly luncheons for panel members on both sides of the issue to present their views and for the public to ask questions.

The borough has a projected budget shortfall this year of between $5 million and $7 million. A tax on guests who stay at hotels, motels and bed and breakfasts has been proposed as one way to boost revenue. The amount of the tax has not yet been decided.

The next hearing for the ordinance is scheduled for the April 5 assembly meeting.

Borough assembly member Betty Glick, who introduced the proposed ordinance, was on the panel at both luncheons, as was Jon Faulkner, co-owner of Land's End Resort in Homer, Kenai Landing in Kenai and the Van Gilder Hotel in Seward; and Paul Carter, owner of the Hotel Edgewater in Seward and representing the Kenai Peninsula Tourism and Marketing Council was at the Soldotna luncheon. Sharon Brower of Kenai, owner of the Grouchy Old Woman Bed and Breakfast represented her own views at the Kenai luncheon.

Glick said she proposed the ordinance as a way to decrease the budget shortfall but also to fund tourism marketing in the borough. The ordinance was proposed to get the public talking about it, she said, adding she has not yet taken a stance on the issue.

"Most every place you go, you pay a bed tax," Glick said, citing the Matanuska-Susitna Borough as an example.

Carter said the marketing council supported the tax with the provision that some money raised from the tax be put back into a fund to promote tourism and marketing in the borough.

"We need a sustainable, long-term funding source," Carter said.

He said the council would want the tax to be named a tourism tax, a marketing arm of the borough would need to be started and that the tax would need to be broad-based to include all forms of lodging — from hotels to RV parks. In addition, he said the council would want to see credit given back to cities that already have a bed tax, such as Seward.

Brower agreed and said she would support the tax if money is rolled back into selling the Kenai Peninsula.

Faulkner opposed the bed tax and said such a tax would essentially charge hotels in order to support government salaries, medical costs and retirement benefits.

"That is wrong," he said. "This is nothing but an easy way out to grab money from the private sector and support government."

He said a tax would decrease demand for his product and hurt his business.

He also said the assembly is responsible for creating the budget problem and now wants to tax hotels to get out of the situation.

Faulkner said more funding for marketing the region is not what is needed.

People use the Mat-Su marketing council as an example of what funding for marketing the peninsula could do, he said, adding that is faulty logic. The Mat-Su is the fastest growing region in the state — which is why there has been a healthy tourism industry there, he said.

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