City looks to extend 'temporary' sales tax

Five-year tax generates $32 million to $33 million

Posted: Wednesday, July 07, 2004

The city's 1 percent temporary sales tax will expire on Dec. 31, 2005, and the Juneau Assembly is considering whether to put an extension of the tax on the October ballot.

The Assembly needs to consider the matter carefully because other competing proposals will likely be on the October ballot. Voters will be asked to support bonds to repair local elementary schools and perhaps construct a smaller high school, according to Mayor Bruce Botelho.

"We don't want to overburden our voters," Botelho said.

Effective Jan. 1, 2001, the additional temporary 1 percent sales tax was approved by voters to fund the rehabilitation of schools, the expansion of Bartlett Regional Hospital and the construction of a recreational facility at Robert Savikko Park. The five-year sales tax will have generated about $32 million to $33 million by expiration, according to city finance director Craig Duncan.

Because the 1 percent temporary sales tax is project-specific, the Assembly Ad Hoc Capital Improvement Project Committee had been meeting to prioritize the various projects under consideration, which include expanding the city's sewer system ($23.8 million), building parking garages downtown ($27 million) and constructing a new state capitol building ($85 million).

The committee also asked the city's chief architect, Catherine Fritz, to scale down the first phase of the Dimond Park Community Center project from $35 million to $28 million. The revised version will have a smaller library space, a six-lane swimming pool instead of a standard eight-lane pool and little public meeting space.

The Assembly Finance Committee will review all the projects later this month and decide what to put on the ballot.

"It's going to be a balancing act," Botelho said.

But there is also a chance that the Assembly might not have the 1 percent sales tax proposal on the October ballot.

A five-year temporary 3 percent sales tax will expire in June 30, 2007. One percent of the tax funds general government operations, 1 percent goes to capital improvements and another 1 percent sponsors emergency budget reserve, capital improvements and youth activities. The 3 percent sales tax generates about $145 million.

"There are some concerns that the 1 percent sales tax will affect the 3 percent sales tax," Duncan said. "If the 1 percent sales tax is not approved, we just don't do some projects. But if the 3 percent sales tax, for some reason, is not approved by the voters, there will be a catastrophic impact on our services because a third of our operation budget comes from sales tax."

Either way, the Assembly will need to decide in early August.

According to the city clerk Laurie Sica, if the Assembly wants to put the 1 percent temporary sales tax on the ballot, it needs to introduce an ordinance in its first meeting in August. It has a public hearing at its next regular meeting on Aug. 23.

• I-Chun Che can be reached at

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