Bar owners walked out of City Hall beaming Monday night after the Juneau Assembly decided to wait for a legal precedent before placing a new liquor tax on the ballot.
At the same time it tabled a measure asking voters to boost the current 3 percent alcohol tax to 5 percent, on top of the 5 percent general sales tax, the Assembly voted to proceed with a ballot measure for a new high school.
Most Assembly members said they prefer to wait on the liquor issue until the Alaska Supreme Court decides whether it's legal for the Fairbanks North Star Borough to tax alcohol extra. Monday's vote means the Juneau tax won't be on the October ballot.
But in October, voters will decide whether the city should redirect $18 million in unspent bond proceeds to fix up some schools and issue $54 million in bonds to build a high school at Dimond Park.
Last October, Fairbanks voters approved a 5 percent liquor tax, effective July 1. Businesses challenged the result, now on appeal with the Alaska State Court.
The court will interpret an Alaska statute that prohibits an alcohol tax in municipalities that don't tax other items.
If voters approved the Juneau tax increase, City Attorney John Hartle had suggested that the Assembly set aside the receipts from the tax increase in case of a lawsuit.
Assembly member Jeannie Johnson said it is more prudent for the Assembly to defer its decision.
"If the state Supreme Court finds the liquor tax is illegal, how are we going to give the money back?" she questioned.
Assembly members Johnson, Randy Wanamaker, Stan Ridgeway, David Stone and Merrill Sanford voted to table the ordinance while the other four Assembly members wanted to pursue it.
"One argument against the alcohol tax is that it's not a good time. But when is a good time?" asked Assembly member Marc Wheeler, who proposed the alcohol tax increase. "We have some big alcohol problems in our community."
But opponents argued that even the Assembly wasn't sure whether the tax would go into prevention and treatment programs.
"I am against it unless I am sure this money is going to services and these services are used to their fullest potential," said Leeann Thomas, owner of the Triangle Club bar.
Matt Felix, a proponent of the increase, remains optimistic.
"As soon as the Alaska Supreme Court decides, the Assembly will have the license to go forward," said Felix, executive director of National Council on Alcoholism and Drug Dependence in Juneau.
I-Chun Che can be reached at firstname.lastname@example.org.
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