Haines: Tour tax may reach ballot in the fall

Posted: Sunday, September 15, 2002

The fate of the borough's 4 percent tour tax may be put before voters this fall. A group of 10 sponsors Tuesday filed an application for a petition to ask voters to repeal the tax.

The question could appear on a special election ballot before year's end.

Sponsor Bart Henderson said getting rid of the tour tax, which voters approved in both l999 and 2000, is key in reviving Haines' stagnant visitor industry.

Henderson blames the tax for driving away Royal Caribbean International cruise ships in December 2000, and keeping ship numbers down since. "Absolutely. It was the main factor that sent them away. They're going to say it was other things to be politically correct, but the tax is why they pulled out."

Voters passed a citizens' initiative in October 1999 to place the extra levy on tours, which are already subject to standard sales tax.

The borough assembly threw out that vote on a legal technicality, but a similar measure passed the following April. The assembly turned down a request from tour operators to delay implementation of the tax after RCI pulled out.

The tour tax was added to the existing 4 percent city and 1.5 percent borough sales taxes, rising to the 9.5 percent tax on most tours conducted in the borough.

The tax has been in effect two tour seasons. According to borough sales tax figures, it raised $180,000 in fiscal year 2002. The assembly budgeted for a 5 percent increase in tour tax revenues this year.

With a budgeted fund balance of $277,000, the borough doesn't need the tax to stay in the black, Henderson said. "It's obvious that the tour tax is surplus."

He noted that while the borough shows a surplus, the city budget, more closely tied to the health of the visitor industry, was adopted with a $230,000 deficit. Henderson, who led opposition to the tax in previous elections, said the decline in Haines economy, can be directly tied to the levy.

The previous bankruptcy of the Halsingland Hotel, decline of business development in Fort Seward, and Norwegian Cruise Lines' announcement it won't be back next summer are all related to the tax, he said. "Anybody who can't trace the demise of the economy to the tour tax doesn't want to see it."

The assembly could rescind the tax, but hasn't considered it because a formal request was never presented, said mayor Jan Hill.

Hill said she'd be reluctant to repeal the tax on an assembly vote. "If we voted it out, we'd see another initiative to get it back on the ballot again. I want to do some homework and see how it would work before we consider that."

After the petition application is certified, sponsors will have 90 days to collect the signatures necessary to place the measure on a special election ballot. Borough Clerk Karen Harvey said a vote could be held as soon as late November.

How the expected October consolidation of the borough and the city would impact the current borough's initiative process is not certain, city manager Marco Pignalberi said Wednesday.

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