Business reactions to ballot vary

Canceled tax would be hard to bring back

Posted: Sunday, August 01, 2004

If the city's temporary 1 percent sales tax fails to pass in October 2005, the community would be hard-pressed to bring it back, some Juneau business people said Friday.

On Wednesday, the Juneau Assembly decided against putting the sales tax measure on the ballot this October in favor of ballots to build a second high school and spend bonds for other school projects. Assembly members feared that too many ballot measures would turn off voters and they would not get anything passed.

Now the Assembly has left itself one chance for voters to approve the sales tax ballot measure next year; otherwise, the tax sunsets Dec. 31, 2005.

School and city officials appeared at the Juneau Chamber of Commerce luncheon Friday to discuss the latest ballot proposals.

If renewal of the 1 percent sales tax fails to pass next year, the Assembly could always bring it back later, but many in the business community would be hard-pressed to support it, Chamber of Commerce Executive Director Chris Wyatt said. Business owners would view it as a new tax and feel they are already taxed enough, she said.

Although it is consumers who pay sales taxes, the tax affects how much they decide to buy, said David Summers, owner of Alaska Knifeworks downtown.

The city assesses a total of 5 percent sales tax on goods and services. A one-percent tax is permanent. Another 1 percent is temporary and sunsets Dec. 31, 2005. The other 3 percent also is temporary and sunsets June 30, 2007. The temporary taxes can be renewed through voter approval.

Summers has found that some customers are surprised by a sales tax in Juneau after they've shopped in Anchorage, which does not have a city sales tax. The state does not assess a sales tax either.

A 1 percent sales tax is especially significant for consumers making expensive purchases, Summers said.

"The power to tax people is a powerful tool and can't be used lightly," said Summers who advocates no sales tax or a statewide sales tax.

The Assembly made the correct move in putting the sales tax off a year to focus on school projects, chamber board president Mike Story said.

Whether the business community supports the 1 percent sales tax next year depends on the projects for which the money is earmarked, Story said.

Some projects the tax may fund include the expansion of the city sewer system, a new airport terminal, an expansion of Statter Harbor at Auke Bay, a new downtown parking garage and tying Eaglecrest Ski Area to the city's electric grid.

Jim Williams, president of North Pacific Erectors, said he would have supported renewing the 1 percent sales tax this year because it serves as an economic driver for the community. The Assembly had a higher priority to place the school issues on the ballot this year, he said. It has next year to focus on passing the sales tax, he said.

As for the measures that likely will be on the ballot in October, the business community had mixed reactions to building a $54 million high school at Dimond Park in the Mendenhall Valley.

John Grummett, an insurance broker with Shattuck & Grummett Inc., said economists were predicting a smaller population and questioned school officials about the need for a second high school.

Juneau School Board Vice President Bob Van Slyke said birth rates are cyclical and he thinks Juneau is going increase in population.

"I'm not convinced the rate will be constant," Van Slyke said. "I'm optimistic about Juneau. I think the economy will grow."

If the district could cut the dropout rate in half, it would automatically have more students, he said.

Dot Wilson, co-owner of Coastal Helicopters, said the high school students who work for her company said they did not see a need for a second school.

Juneau School District Superintendent Peggy Cowan said some students have done well under the high school's current conditions, but others need a less-crowded learning environment.

Chamber board member Bob Hamilton said he has observed Alaska Native children perform better academically when class sizes have been smaller.

The Assembly will meet Aug. 9 to consider introducing ordinances to place the school measures on the ballot.

Story said he is not sure if the chamber will take a position on the measures. It supported the last proposal for a second high school, which voters defeated in a special election in May.

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