City rejects ballot plan to adopt seasonal sales tax

Posted: Monday, August 20, 2001

SKAGWAY (AP) -- A ballot proposition to institute a seasonal sales tax during the summer tourism months was rejected by the Skagway City Council.

The proposition would have replaced the 4 percent annual sales tax with a 5 percent sales tax that would be in place for the six months between April and September. The sales tax would be zero between October and March.

During the summer months, the town of about 860 people swells with hundreds of thousands of tourists.

The proposal would have brought in an additional $700,000 during the tourist season and meant about $226,000 less during the off-season. City Council Member Dan Henry said city services are stretched thin from visitor-related costs.

Henry said the city's emergency services are a ''rubber band that is being stretched too tightly.''

Following more than an hour of public testimony, the council voted unanimously Thursday not to put the matter before voters this fall. Most of the testimony was in opposition to the plan.

Steve Hites, a local businessman, told the council that the tax would strain already tenuous relations between Alaska and cruise companies.

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