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Food tax petition cleared

Posted: Friday, June 06, 2008

An initiative petition proposing a seasonal exemption from sales taxes on groceries has been certified by the Kenai Peninsula Borough clerk's office, and signature pamphlets should be hitting the streets shortly.

The initiative sponsor, James Price, of Nikiski, said he should have the pamphlets by today and begin collecting signatures by the weekend.

Price is head of Alaskans for Grocery Tax Relief Now (AGTRN), a group advocating seasonal tax holiday on non-prepared foods that would run from Sept. 1 through May 31, and tax food only during the tourist season.

He said Thursday that he had not yet lined up folks to help collect the 1,380 signatures he'll need to put the measure on the Oct. 7 municipal ballot, but doesn't expect to have much problem finding volunteers.

The borough, he said, is realizing increased revenue from the 1-percent increase in the boroughwide sales tax that took effect in January, as well as from rapidly rising property values that are generating higher revenue streams.

Price was a sponsor of a similar initiative in 2002 that sought to eliminate taxes on food year round. That ballot measure was eventually rejected by voters, largely because schools were struggling to make ends meet and the tax break was expected to cut borough revenues by as much as $2 million. Borough sales tax revenues go to pay for school operations.

The new plan would leave intact the revenue stream from food during the summer months when the borough population swells with visitors, but give year-round residents a break during the fall, winter and spring periods. That and the fact that the state is enjoying a oil revenue surplus and has seen fit to boost funding to municipal governments and schools means such a tax break is affordable.

Price called the situation "an alignment of the stars" during an interview in early May shortly after filing the initiative petition with the clerk's office. "I believe the borough can weather this change," he said.

Borough Finance Director Craig Chapman on Thursday provided what he termed "a real rough estimate" of the impacts on the borough and its cities. He said it could cost the borough about $1.8 million, the city of Kenai about $480,000, Soldotna about $710,000, Seward some $260,000 and Homer in the neighborhood of $525,000.

In a recent letter to Price, acting Borough Clerk Johni Blankenship said the petition had met all the required conditions qualifying it for signature gathering; that is, it violated neither the Alaska Constitution nor the single-subject rule.

Blankenship did note that the borough's legal department has determined that if the ballot measure is adopted, it is likely some interpretation may be necessary concerning what would be included under a definition of non-prepared foods.

The clerk said that should voters approve an ordinance (the ballot measure would be Initiative Ordinance 2008-02), its terms would be enforceable as a matter of law.

Thursday, Blankenship said Price would need to turn in his signatures by July 21 to get on the Oct. 7 ballot. The clerk's office would have 10 days in which to verify the signatures. A written summary of the initiative to appear in a voter pamphlet would go to the assembly for approval in early August.

In May, Price said he hoped to begin collecting signatures at the Kenai River Festival this weekend. However, the festival now charges $200 for a booth devoted to a political activity.

Josselyn O'Connor, festival director, said that such signature collecting activities were once deemed nonprofit and fee-free booths were allowed, but that changed around 2003 when the festival began charging a fee for political booths.

The festival charges vendors various fees depending on what they sell, and all collected fees are rolled back into the Kenai River Center's river and wildlife education programs, O'Connor said. Nonprofit organizations that are not charged fees are asked to provide some kind of hands-on activity for children as part of the booth's theme.

O'Connor also said there would be no fee or restriction on Price or anyone else wishing to wander through the festival grounds to collect signatures.

Hal Spence can be reached at hspence@ptialaska.net.



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