Voters asked to extend tax Oct. 3

Tax extension provides city up to $25 million in revenue each year

Posted: Thursday, September 07, 2006

City officials say $106 million to $125 million in services would be lost over five years if voters don't renew the 3 percent sales tax in October.

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Voters will be asked Oct. 3 to approve Proposition 1, which extends the temporary tax for five years. The tax is estimated to generate $21 million to $25 million a year for general city government services and capital improvement projects.

"The sales tax is a critical component of funding city operations and it's really important - to continue the level of services the city provides - to have this sales tax continue," city Finance Director Craig Duncan said.

Juneau resident Mae Tanner believes the temporary sales tax should be discontinued.

"They have done all the projects the tax is supposed to pay for," Tanner said. "They never should have been using it for the nuts and bolts the way it has been."


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Tanner said the temporary sales tax should be used only for special projects and not for ongoing city services, because those force the tax to become a permanent fixture.

"Every few years it comes up and it's not going to stop," Tanner said.

The city has a sales tax of 5 percent in place, but 3 percent of that is for an areawide sales tax that expires at the end of June 2007. A 1 percent permanent sales tax is on the books and another temporary 1 percent sales tax passed in October of 2005.

About 40 percent of funding for the general city government services is generated by the 5 percent sales tax, city special projects officer Maria Gladziszewski said.

"The biggest single source of funding for general city services is sales tax revenue," she said.

District 1 Juneau Assembly member Merrill Sanford said extending the sales tax is important because of the revenue it provides for basic services the community relies on, such as public safety and street maintenance.

"There's some money that goes toward libraries and there's some money that goes toward snow removal too," he said. "If we don't have that 3 cents worth of sales tax, those things that it goes to right now, we will have to cut other budget items or increase property taxes."

The 3 percent sales tax extension is broken down into three parts, Duncan said. One percent of the sales tax goes toward police, fire, street maintenance, snow removal, ambulance service, parks and recreation, libraries and other general purposes. Another 1 percent goes toward roads, drainage, retaining walls, sidewalks, stairs and other capital improvement projects. The last 1 percent is designated for water and sewer system extensions, youth activities and the emergency budget reserve.

Each 1 percent equates to about $7 million in revenue annually, Duncan said.

Sanford, a former district fire chief, said it would be a difficult task for the Assembly to sort through what services are essential and what would need to be cut if the proposition didn't get voter approval. Public safety services are essential, but other services that enhance the quality of life in Juneau might not be able to be provided without the tax, he said.

"It would definitely be a big shuffle to figure out what we had to have and what we didn't need to have," Sanford said. "It would be a big catastrophe for us."

Bringing the issue back to the voters time and again allows the community to hold city government accountable for its actions, District 2 Assembly member Jonathan Anderson said.

"We want to be able to judge whether our city and borough is doing a good job at what they're doing," he said. "So this is actually a people empowerment issue."

The temporary 3 percent sales tax would go into effect on July 1, 2007, if voters approve the proposition.

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