Kodiak city councilors are scheduled to decide today whether to raise the city’s sales tax cap.
The second reading and public hearing for the tax cap ordinance, which would quadruple the cap to $3,000, is on the regular meeting agenda. If approved, the change will go into effect on Jan. 1, 2018.
At a work session Tuesday, some councilors seemed intent on voting yes.
Councilor Gabriel Saravia said he would not second any motion to adjust the cap.
Councilor John Whiddon agreed.
“I will support the $3,000 cap. I think we’ve waited a long time,” Whiddon said, stating that the increase is needed to continue services currently provided by the city.
Councilor Rich Walker has in the past spoken in favor of amending the ordinance to increase the cap a lesser amount, possibly to $1,500. He voted in favor of the ordinance in the first reading, however.
He did not speak on his intentions for tonight’s vote at the Tuesday work session.
A motion to amend the ordinance would require it to go through another public hearing at the next regular meeting and would push back the effective date.
Many residents have given public comment on the ordinance. Some have said the increase will push consumers to purchase goods in Anchorage or online.
Another pointed out that it would increase the cost of business for those who purchase supplies, repairs or other services in town.
Residents have also spoken in favor of increasing or eliminating the cap, however. One called it a tax break for the rich, who can afford the higher cost purchases.
Whiddon said he understands business concerns.
“I’ve been in a business that failed, quite frankly, that had to close the doors when Wal-Mart came to town. We couldn’t compete. I understand the competitive nature of business that people are facing and the fear they have of losing everything they’ve got if things don’t go well for them and their business,” he said. “With that said, we have a responsibility to the entire community.”
He said the recently formed Economic Development Committee was put into place to help local businesses “and create a business environment where they can flourish.”
Council will also vote on an ordinance that would exempt residential and commercial property rentals from the sales tax cap increase. Therefore, if this ordinance is passed, customers would continue to only pay sales tax on the first $750 of the rental price.
All councilors have expressed support for this ordinance.
In other business, council will vote on:
– the first reading of an ordinance that would allow harvesters to sell seafood directly from their vessels in the city harbors
– a contract with Kodiak Historical Society for operation of the Baranov Museum through June 30, 2020
– authorization of a $600,000 Alaska Clean Water Fund loan for phase one of a Wastewater Treatment Plant 20-year upgrade
–adoption of priority lists for state and federal capital project funding requests
Snoderly can be reached at (907) 512-2624. Follow her on Twitter, @KDMjoann