Close vote on Haines tour taxes

Posted: Wednesday, April 19, 2000

In Haines, where nail-biter elections have become the norm, voters split down the middle Tuesday on whether to establish 4 percent bed and tour taxes.

With as many as 120 absentee and questioned ballots yet to be counted, opponents of the tour tax were ahead by a single vote, 410-409. Those supporting a tax on beds were ahead, 416-401. Outstanding ballots will be tallied at a canvas next Tuesday.

``What a town,'' said Brian Lemcke, a bar owner and former city council member who hoisted a sign on the outside his business urging voters to reject the ballot measures.

Elected officials in Haines have taken to saying the community splits down the middle on major questions. In 1998, a borough-wide question of consolidating the two local governments failed by three votes. City of Haines mayor Don Otis was elected in October by a four-vote margin.

Voters were much more certain about the bed and tour taxes in October, when the measures were approved by voters by 61 percent and 57 percent margins, respectively. Voters in that election also endorsed by 55 percent an advisory measure capping cruise ship visits at year 2000 levels.

The vote came after a summer that saw an increase in tours and disclosures about dumping of pollutants by cruise ships into waters near town.

But the Haines Borough Assembly called back the results of the October tourism tax measures after a borough lawyer's opinion that the taxes should have been put on the ballot by ordinance, not by resolution, as the assembly had done. A new election was scheduled and the bed tax question was changed to phase in the tax over two years.

In the wake of the October election, tour operators launched an advocacy group aimed at disseminating information on the industry's benefits, mounted an advertising campaign and called on elected officials to initiate tourism planning. The industry's critics have been calling for such planning since 1995.

The bed and tour taxes were first proposed a year ago by Haines Borough Assembly members as a way to help bridge a $300,000 deficit that has arisen partly due to a decline in state raw fish tax and federal stumpage revenues.

Each of those sources formerly pumped as much as $500,000 annually into borough coffers. Last year, the raw fish tax and stumpage combined brought in $298,000.

The proposed tour taxes, combined, were projected to raise $251,000, or about half the borough's budget deficit for the coming fiscal year.

Haines Borough Mayor Jerry Lapp has told property owners to expect a two-mill property tax increase this year to help fill the gap. But without new tourism taxes, the property tax increase (which would raise $330,000) would still leave the borough budget $200,000 in the red.

Tax advocates and some borough assembly members have characterized the tour tax as a public resource ``user fee,'' likening tours on public lands to fishing and logging, where fees for use of public resources pay into the borough budget.

Opponents of the tax have said it would cause ships to leave Haines for other communities and amounted to ``economic Russian roulette.'' Regular stops by large ships in Haines started in 1996, when reconstruction of the Port Chilkoot Dock allowed them to tie up downtown.

Motel owners and opponents of the bed tax have been relatively quiet since October's election. They've argued that their businesses already are marginal and that their customers -- independent visitors -- spend more than other tourists.

Haines currently has no bed tax. According to the Associated Press, the national average bed tax is 11.8 percent.

The election included a last-minute campaign blitz by tour operators Monday who publicized a decision by Norwegian Cruise Lines last week to discontinue morning dockings in Haines in 2001. The daytime dockings, a first for Haines, were announced last spring.

NCL spokesman Mike Pawlus this week said the change -- which allows its Norwegian Wind to spend a full day in Skagway -- had more to do with selling tours in Skagway than a tax in Haines.

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