Assembly scuttles boat tax

Posted: Sunday, November 18, 2001

Juneau Assembly members put a new boat tax on hold Friday, opting to turn over the issue to a work group for more discussion.

Earlier this month, Assembly members proposed a property tax on commercial boats during a discussion about reducing property tax on commercial aircraft. Air carriers this spring protested assessments they said were inequitable and unfair.

Assembly member Dale Anderson said a meeting with commercial boat operators Thursday was productive, but suggested the issue needed more work. Boat owners want a new tax to be fair, equitable and broad-based, he said.

"In my opinion, we should move forward with aircraft taxes but hold onto watercraft taxes for further review," he said.

The Assembly Finance Committee agreed to use a version of the tax proposal that doesn't include commercial boats. A subcommittee or task force will continue to work on the issue, with the expectation of finishing work by April 1, under the panel's direction.

Finance Committee Chairman Jim Powell said a delay will give people time to digest possible changes and evaluate recommendations made by the Mayor's Fiscal Task Force.

"I think we're headed in the right direction," he said. "Holding off on this one makes sense."

The proposed ordinance would decrease property taxes on commercial planes and helicopters by about 60 percent under a schedule that varies by aircraft weight. The change should reduce city revenues by $180,000, the city said. The boat tax proposal was expected to generate about $60,000.

Mayor Sally Smith asked for more information about city revenues and exemptions.

"I don't mean to pit watercraft against aircraft, but how are we going to make up the $180,000?" she asked.

City Manager Dave Palmer said the Assembly will evaluate city revenues and expenditures during this spring's budget discussions.

Mike Bethers, who spoke for charter operators at Friday's meeting, said he supported the Assembly's decision to remove the boat-tax provision. He suggested the city work on a business taxation plan with all affected parties that identifies the purpose and need for new taxes.

If the city is going to tax boats, all segments of water-related industry should be covered, including freshwater and saltwater vessels and those that are powered and nonpowered, Bethers said.

Auke Bay charter fisherman Jim Preston, who operates Big Jim's Charters, volunteered to help with boat-tax proposal. Some of the numbers in the current plan seem unreasonable, he said.

"I feel ... this was moving way too fast with very little public notice from the affected industry," he said.

Tax changes need to be in place on Jan. 1. A new boat tax wouldn't take effect until January 2003 if an agreement is reached next year.

A public hearing on the aircraft tax proposal is scheduled for noon Nov. 23 in the Assembly chambers.


Joanna Markell can be reached at

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