Bed tax to pay for general government?

Posted: Thursday, May 26, 2005

The Kenai Peninsula Borough Assembly has decided to plan to spend more revenue than it is capable of generating within its coming 2006 borough budget. In most cases, a borough would see this kind of a situation as being unworkable, but not the KPB. The KPB took a look at cutting its budget and decided that budget reduction is not possible even as it is spending large amounts of cash on things that the borough could live without.

The KPB then took a look at how other boroughs and cities were generating cash and the bed tax idea hit them right between the eyes.

The KPB saw that the bed tax was being used up in Anchorage to pay for a new convention center. The KPB then decided to take this "pay for a building idea" to a new level and turn it into a fund general government funding idea.

The KPB now has decided to depart from using general taxes to pay its general bills.

The KPB now has a new taxation procedure that creates "discriminatory taxes" for specific industries. This procedure means if a future assembly does not like plumbers, it will generate a discriminatory tax to force plumbers to pay more taxes than any other business type. This new taxation procedure opens a "Pandora's Tax Box" within the KPB.

Do we want the KPB to assign different tax rates to different business types? Do we want carpenters to pay a 1 percent sales tax, plumbers 9 percent, department stores 14 percent, lodging 18 percent, gas stations 8 percent or fish processors 17 percent? Is this our KPB taxation policy for the future?

The KPB currently has decided to force only its lodging businesses to pay a 12 to 18 percent sales tax by

manipulating the sales tax term and calling it a "bed tax or transitory tax," etc., while its other businesses are only required to pay a 2 to 5 percent sale tax.

This departure from general taxation to discriminatory special interest taxation is a very dangerous and slippery slope. Departure from general taxation forces a neighbor-against-neighbor spirit and is extremely unwise.

Rather than reducing the 2006 KPB budget, our assembly has decided to create a neighbor-against-neighbor struggle, which can only increase with time.

Donald Johnson, Soldotna

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