Gilman, Glick differ on bed, sales taxes

Posted: Sunday, September 25, 2005

Editor's note: Candidate columns and answers to a Clarion questionnaire can be found on pages A-4 and A-5 in today's paper. Monday's election coverage will focus on the race for the assembly District 5 seat and Proposition 3.

Margaret Gilman and Betty Glick, both candidates for the Kenai Peninsula Borough Assembly, agree that finding new sources of revenue for the borough is important.

They do not agree on one of the proposed ways to raise it.

Gilman and Glick are running for Seat 2 representing Kenai.

Proposition 1, which will appear on the ballot Oct. 4, gives voters the chance to decide if the borough should levy a transient accommodation tax.

The tax, commonly known as a bed tax, would allow the borough to impose up to a 4 percent tax for short-term rentals such as a hotel, motel or bed and breakfast rooms.

The measure was introduced by Glick.

When Glick, the incumbent, introduced the measure as Ordinance 2005-05, she said it was to start a conversation in the community on whether there should be this type of tax. At the time, she said she was not taking a stance on the issue.

With the measure on the ballot, Glick said she is going to vote for it.

"This just gives the assembly another tool in the toolbox when finding ways to generate revenue," she said. "It would give us another source of revenue that would not necessarily impact the local taxpayer."

A bed tax may help prevent a property tax increase, she said. Glick added that a property tax increase would be harder on borough residents than a bed tax increase.

Gilman said she does not support a tax that targets a specific sector of the economy and will not vote for Proposition 1.

"It does not guarantee that the money generated will support the tourism industry," Gilman said.

As the proposed ordinance is written, it does not dedicate revenue for marketing the tourism industry on the peninsula, she said.

The proposed ordinance requires at least 25 percent of revenues each year from the tax to go into a room tax fund. This fund would allow the borough to enter into cooperative agreements with cities in the borough to promote tourism with funds from the tax.

Gilman said the way the ordinance is written, using money to promote tourism is optional for the assembly. She said she is concerned that future assemblies may not use the money for that purpose.

"While I believe that tourism marketing is very, very important, I'm not sure that the bed tax as it is currently written will achieve the desired effect for that industry," she said.

Another concern is that the borough has a sales tax, she said. This combined with a bed tax may be too much, she said.

She said she does agree with the assembly's decision to raise the borough sales tax. There needs to be a balance between sales and property taxes so that the tax burden is spread across all people in the borough, she said.

However, Gilman said a sales tax increase will be more of a burden on low income residents. If elected, she said she would consider proposing a sales tax exemption on food.

"It does cost money to pay for services," she said. "I think that everybody should be able to contribute something."

Glick did not vote in favor of raising the sales tax.

"The sales tax gets the local property owner — the local taxpayer — every time they go to the grocery store or the gas station. A bed tax impacts the tourist," she said. "(A bed tax) helps to alleviate the tax burden on the local taxpayer."

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