Candidate views: Bill Smith, Assembly District 8, Homer

Sales tax needs new approach

Posted: Tuesday, September 27, 2005

The Kenai Peninsula Borough has been facing difficult funding decisions. The assembly felt compelled to raise the sales tax to 3 percent in order to avoid a large property tax increase together with serious cuts to services, including essential school programs. Our borough has always been a leader in funding education, and I think we should remain committed to education.

I believe we must take a fundamentally different approach to sales tax. There should be a package presented to voters that would allow some sales tax to be dedicated to the general fund as well as the school district. This way the voters would be directly asked to support the level of funding for schools and the level appropriate for general government. The bed tax would be replaced by dedication of a portion of sales tax to the general fund.

The bed tax is targeted solely at room-renting visitors, but will return little to the visitor industry or the effected cities. I believe that a targeted tax should be used to support the economic sector it targets. Thus a bed tax should be used for visitor support services and facilities. An example: visitors have long requested more public restrooms. If the city of Homer had bed tax revenue, it would have money to furnish this amenity and help draw more visitors. The pittance offered the cities by Proposition 1 would be hard to collect and would be inadequate for our needs.

I join many people in protesting the assembly decision to rely on a 40-year old vote to legitimize raising the sales tax without voter approval. This misstep prompted many to join the petition to limit sales tax. I will be seeking to amend the tax code and then taking the issue to the voters. This does not mean I support Proposition 5. Proposition 5 would not only limit sales tax to 2 percent, it would put minority rule in place for sales tax amendments. Propositions 4 and 5 seek to unreasonably limit the ability of this Kenai Peninsula community to govern itself through the representative process. Proposition 4 would institute policies, such as 60 percent voter approval for projects over $1 million, that are unreasonably obstructive as well as undemocratic. Proposition 5 also limits the ability of the assembly to raise the tax cap and limits the timing of ballot questions. If Propositions 4 and 5 pass, 41 percent of the voters could control our tax policy and capital projects. These are not democratic initiatives because they seek to give control to a minority.

I have long been active in planning and development issues in Homer and have a number of ideas for saving money at the borough and building our business infrastructure. My proposals include a streamlined subdivision process, a freight hub and opening the assembly to all borough residents via Web and teleconference.

It is important that we turn down Propositions 4 and 5, and I would appreciate your support to bring a fresh view to the assembly.



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