Sales tax revenues spur long-term development

Posted: Sunday, May 15, 2005

Vantage Point By Robert Hale, publisher of the Juneau Empire.

Friday's Juneau Chamber of Commerce luncheon, which featured six 5-minute presentations on six of the components included in the proposed extension of a seven-year, 1-percent sales tax, ended up being as much about long-term economic development as it was about capital improvement projects.

The presentations were centered around items that are currently under consideration by the Juneau Assembly's finance committee. Last week that panel moved to recommend to the full city Assembly the tax extension, and finance committee members roughed out their priorities and assigned the amount of monies they think should be spent on each.

The list of priorities won't be firmed up until the first or second week in June, however, and between now and then residents have time to contact their Assembly members to let them know which projects they think are most important for the community.

The projects discussed Friday, and for which a total of $49 million would be provided by way of the sales tax, include a downtown parking and transit facility, deferred maintenance and Statter Harbor improvements, expansion and enhancement of Juneau International Airport, an area-wide expansion of the city's sewer and water system, a community center at Dimond Park in the Mendenhall Valley and a mid-mountain chair lift at Eaglecrest Ski Area.

Each of the projects would be funded only in part by the sales tax monies. For the $10 million downtown parking facility, for example, the city would need to rely on $7 million in federal transit funds if its receives the $3 million it is requesting in sales tax funds. Airport funding would come from several sources, including the Federal Aviation Administration and revenue bonds, and the Dimond Park community center would seek grant monies to round out its funding.

Based on last week's informal ranking of the projects, the sales tax proposal would look like this if it went on the ballot today: The Dimond Park recreation center would receive the bulk of the funding at $27.3 million, the airport expansion would be funded at $10.9 million, the sewer expansion project would receive $7 million, the downtown parking facility would receive the $3 million it is requesting, and Eaglecrest would get the $800,000 it is asking for.

Some interesting points about the tax proposal were raised Friday by several chamber members. One advocated the idea of a community advisory vote prior to placing the initiative on the ballot. Such a vote would give Assembly members a clear indication of which projects the community deems most important. Another suggested not placing the projects on the ballot as a package that would be collectively accepted or rejected by voters. Rather, he said, the city should see if it can structure the initiative so that residents can vote on the projects they think would benefit the community most.

A couple of people spoke about the importance of the city and its residents thinking about which of the proposed projects are really needed and which are mere wants.

One chamber member expressed reservations about having tax dollars tied up for seven years and another suggested that the city consider sunsetting the tax or, at the very minimum, focus on projects that clearly provide for long-term economic development and that would "move the economy forward." A third suggested taking care of the city's infrastructure - the sewer and water expansion project - thereby paving the way for future development and, more importantly, the creation of more affordable housing for Juneauites.

It was noted several times that the lack of affordable housing is an issue that is at or near critical mass. Assembly member Merrill Sanford, who made the presentation on the sewer expansion project, said the housing situation is so bad that "our children and grandchildren have to leave and go somewhere else to be able to afford a home." With the Kensington mine set to go on line, with Wal-Mart having purchased the old Kmart store and with Home Depot looking for land on which to build, one chamber member wondered aloud where people who come to Juneau for jobs are going to live. That's a great question.

What I heard at the chamber luncheon shed light on two or three key things. One was that a ballot measure containing a half-dozen community improvement projects could be a tough sell if it's an all-or-nothing proposition. Restructuring the initiative could be quite a challenge for the city's legal department, but I think most voters would favor voting on what they consider to be most important than on the full-meal deal.

The idea of an advisory vote also seems to have merit. What Assembly members learn through that exercise could tell them everything they need to know about what to include in the sales tax proposal. If taxpayers are being asked to make a seven-year financial commitment, you'd think the Assembly would want to go for what matters most.

• Robert Hale is publisher of the Juneau Empire. He can be reached at robert.hale@juneauempire.com.



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