An effort to get a proposed borough-wide bed tax on next year’s ballot has been postponed until March.
This is the second attempt in as many years to bump up borough revenues through a temporary accommodations tax.
The borough assembly held a public hearing on Dale Bagely’s proposal to let voters weigh in again on whether to put the tax in place at a rate of six percent for businesses in the borough and three percent for those inside the cities. The current pitch also includes a tax for RV’s. Bagley says there are some other adjustments he’d like to make to his proposal. Sales tax in the borough is earmarked exclusively for education. A bed tax might get more traction if some of the money it brings in goes back into promoting tourism.
“After talking to the mayor’s office (we’re) looking at maybe trying to do some kind of amendment to tie in funding to the Kenai Peninsula Tourism and Marketing Council and the Kenai Peninsula Economic Development District to a percentage of the revenues that come in on the bed tax. It’s still subject to assembly appropriation, but I am working with the borough's legal department to come up with something on that," Bagley said.
Even with lodge owners potentially getting a little something back for collecting the tax from visitors to the Peninsula, it will likely be a tough sell. Sterling-based fishing guide Joe Conners puts up some of his clients in his lodge. He’s not a fan. He and others in the business say they’re being unfairly targeted because sales tax in the borough for other products and services is capped at $500.
“If you buy a car for $5,000, a family of four buys it, they pay (sales tax) on the first $500. That family of four comes to my place for a week, pays $5,000, the entire $5,000 is taxed, because I have to break it down to mom, dad, the two kids for each day," Conners said.
But proponents say the tax is relatively small compared to other places that have something similar, which is basically everywhere, and that doesn’t seem to have stopped people from visiting even when the tax is upwards of 15 or 20 percent. Larry Persily, who was former mayor Mike Navarre’s chief of staff, made his case to the assembly from a more tax-friendly viewpoint.
“I’m here on behalf of all my tax-supporting, progressive friends who say ‘please tax us. Please.’ You’re leaving money on the table by not having a bed tax in the borough. It’s 12 percent in Anchorage. Fairbanks, Juneau, Kodiak, everyone else has one. As visitors to the Peninsula, we enjoy our time here and we come down because of what the Peninsula offers, not because a hotel room or a B&B might be a couple dollars cheaper," Persily said.
Assembly member Kelly Cooper moved to add one more public hearing before the assembly votes on whether or not to put the question on the ballot next year. That will happen in March.