Panel: Extend 1% sales tax for nine years

$26 million would pay for Valley rec center; $20 million would go to airport

Posted: Friday, June 17, 2005

If voters agree with the Assembly Finance Committee, Juneau's temporary 1 percent sales tax will last nine years the next time around.

The committee on Thursday voted to put a nine-year tax on the city ballot. Juneau's temporary 1 percent sales tax expires Dec. 31 and needs voters' approval for renewal in the October election.

The biggest expenditures would be $26 million for a Mendenhall Valley community center and swimming pool and $20 million for airport renovation.

The Finance Committee previously planned to extend the sales tax for seven years. But to fund all the proposed projects, the committee voted 7-1 for the longer term. Assembly member Merrill Sanford cast the dissenting vote. Assembly member Daniel Peterson was absent.

Mayor Bruce Botelho said the Assembly should simply ask voters for a permanent 1 percent sales tax.

"Let's be honest with ourselves and the public that this is where we are going," Botelho said.

Juneau has one permanent 1 percent sales tax and two temporary sales taxes - one 1 percent and the other 3 percent.

City Manager Rod Swope said sales taxes generate almost half of the city's revenue and are critical for the city's operations.

"If we don't have the sales tax, we may as well hang a sign on the door and say, 'Closed business,'" Swope said.

Committee members didn't decide whether to make the 1 percent or the 3 percent temporary sales tax permanent but said they will have more discussions.

Assembly member Randy Wanamaker said he originally preferred to renew the sales tax for only five years because he was worried that the public might not support a longer term. But the public comments he has received favored extending it for more than five years.

"They understand that it is the means of funding projects," Wanamaker said.

A nine-year 1 percent sales tax would generate an estimated $64.5 million.

The city would spend $7.7 million building a parking garage downtown and $7.5 million expanding Juneau's sewer system.

Eaglecrest Ski Area would get $800,000 for a mid-mountain lift. The lift would allow the ski area to open early.

Juneau International Airport would get $20 million to rebuild the north wing of the terminal, renovate the east wing and add a new baggage claim area.

The committee doubled its contribution to the project after the airport informed the Assembly that officials had underestimated the project by $16 million.

Airport Manager Allan Heese said the contribution puts the airport in a better financial situation. He said the Federal Aviation Administration would cover half the increase.

The Docks and Harbors Department would get $2.5 million for deferred maintenance and Don Statter Small Boat Harbor expansion.

"This doesn't do us anything," said Port Engineer Mike Krieber. "That is less than half of what we need. We are still looking at another substantial round of fee increases."

The Dimond Park Community Center would receive $26 million, about $1.3 million less than what the committee had agreed earlier.

David Summers, president of the Juneau Chamber of Commerce, said the Assembly should remove Dimond Park Community Center from the list because it is a popular project and can be funded through a general-obligation bond.

"The money should be used to support important infrastructure improvements," Summers said.

Joan O'Keefe, chairwoman of the city's Parks and Recreation Advisory Committee, said she still prefers that the Assembly appropriate $27 million to the project so the center would have an eight-lane swimming pool.

The Assembly will take final action on the 1 percent sales tax proposal in early August.

Sanford, the only Assembly member who voted against the nine-year renewal, said a seven-year extension is already a stretch to him.

"We need to budget and prioritize," Sanford said. "We cannot fund every project that comes to us."

• I-Chun Che can be reached at ichun.che@juneauempire.com.



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