My Turn: City should take another look at proposed sales tax priorities

Posted: Sunday, July 17, 2005

The June 8 headline in the Juneau Empire - "Study: City's economy is going nowhere" - should frame the debate for the upcoming municipal election. The Juneau Economic Development Council published a sobering snapshot of Juneau's economy in its June 2005 Juneau Economic Indicators. And it's not a pretty picture. "In the context of a growing national economy, Juneau's lack of growth indicates a real decline relative to the nation as a whole. Juneau's annual gross business sales continue to increase, but population declined last year by 280 people after increasing slightly the previous four years. Juneau's population is aging, with relatively few residents between 20 and 35 years of age. This important age group typically adds vitality to a community's entrepreneurial and civic life. A significant problem for young Juneau residents is the lack of affordable housing." As former presidents of the Juneau Chamber of Commerce, we believe that the proper context for a public discussion about Juneau's economic challenges is our Oct. 4 municipal election.

Of particular concern to us is the extension of the "temporary" 1 percent sales tax. The Assembly recently decided what it wanted the revenue from this tax to fund and proposed the tax last for nine years. Historically, the 1 percent has been used for distinct infrastructure projects and has not lasted longer than five years. If approved by Juneau voters, this nine-year 1 percent sales tax would generate an estimated $64.5 million. The biggest chunk ($26 million) would go toward a swimming pool/water park and $20 million would fund airport renovation. $7.7 million would go for a parking garage downtown and $7.5 million for expansion of Juneau's sewer system. Eaglecrest would receive $800,000 and Docks and Harbors would get $2.5 million for deferred maintenance and Auke Bay's Statter Harbor.

If we approve this "temporary" 1 percent sales tax, we are locked in for nine years. While some of the revenue would be invested in critical infrastructure (sewers, airport, harbors), no single project is funded sufficiently and projects that would most alleviate our economic malaise are significantly underfunded. We believe that the Assembly's inclusion of a second city-owned and operated swimming pool and water park is irresponsible. That it tops the list as the Assembly's most important and expensive priority is just plain wrong, especially in light of current economic indicators. Further, this unnecessary facility will lose money from the day it opens and will be heavily subsidized by more taxes. Numerous past presidents of the Juneau Chamber of Commerce do not support the planned course of action, including Jim Scholz, Jim Weber, Kathy Kolkhorst Ruddy, Romer Derr, Bruce Abel, Scott Spickler, Jim Collard, Beverly Ward, and Renda Heimbigner.

Juneau is losing population. We need affordable housing and we can't get it without functioning city sewer systems in reasonably priced subdivisions. We need to keep the capital in Juneau and that can't happen if our Assembly allows our airport to deteriorate.

Finally, local sales taxes are regressive, meaning the less you earn, the higher your tax rate. Why would the Assembly burden our most vulnerable residents with a regressive tax for nine years? We've already been hit with huge property tax hikes due to increases in assessed valuations of real property. Many families work hard to save for a down payment on a home and then struggle to make payments and keep up with property taxes. The city should at least invest our sales tax money in essential infrastructure that will reduce, not increase the cost of living. Why force residents to pay for frills our community neither needs nor can support?

Without basic infrastructure and reasonable taxation, Juneau will continue to lose population. Before finalizing the election ballot, the Assembly should revisit the 1 percent sales tax "wish list" and think seriously about reordering its priorities.

We are concerned past presidents of the Juneau Chamber of Commerce. We are not speaking for, or on behalf of, the Juneau Chamber.

• Ron Flint was the president of the Juneau Chamber of Commerce from 1992 - 1993. Peggy Ann McConnochie was the president from 1994 - 1995.



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