Bed tax, by-mail voting on the line

By Naomi Klouda
Homer Tribune
The Kenai Peninsula Borough Assembly faced two key decisions at its meeting Tuesday night that could depend on voters, one that would change how voters register their ballots and one that would levy a boroughwide bed tax.
The idea to have voters cast ballots by U.S. mail didn’t get a lot of public attention, said Assemblyman Dale Bagley, who set the matter before the assembly for a second vote at Tuesday’s meeting.
“Only about 10 people testified on it, mostly against. I would like to see a public advisory vote before we make such a fundamental change in the way people vote,” Bagley said. “The first motion failed for this year but there is still a chance the assembly will put it to a vote (on the Oct. 7 ballot.)”
At the July 1 meeting, a resolution asked to place the question on the ballot: Should borough elections be conducted by mail? Reasoning included reaching remote areas more efficiently and conveniently. It would also reduce staff expenses and money spent training election officials. In places where mail voting is underway, voter turnout has increased, Bagley said. Traditionally, the borough sees dismal turnouts at the polls — 17 to 19 percent.
But the measure failed with three “yes” votes, five “no” and one assembly member absent (Charlie Pierce, of Sterling). Bagley said he felt that if the matter were up for reconsideration, it might pass this time, and so he asked for the re-vote. Those voting “no” were Bill Smith, Sue McClure, Mako Haggerty, Hal Smalley and Wayne Ogle.
The state of Alaska paved the way for municipalities and boroughs to adopt voting-by-mail procedures in its Senate Bill 214 this spring.
“The state opened up the question,” Bagley said. “I think they want someone else to be the guinea pig. If the Kenai Peninsula does it first, they can see how it goes.”
One problem is that the plan wasn’t well vetted before the public. If the assembly had passed the measure at the July 1 meeting, a lot of voter confusion could result on Election Day, Oct. 7, Bagley said. At that point, they would have been handed the change without voting on it.
“I think this is too big of a change for nine members of the assembly to make. I don’t want to imagine the headaches it would create if we went this fall to voting by mail. A lot of people might throw away their ballots in the trash without realizing it,” Bagley said. He proposed to change the ordinance originated by Homer Assemblyman Bill Smith to allow voters’ input first.
Bed tax
The momentum to install a bed tax in the Kenai Peninsula Borough has met with a greater mix of public input, with potentially affected business owners both for and against the idea. A recently formed group, the Homer Voice for Business, contends the bed tax would hurt Alaskans, since in-state visitors make up a large portion of the Homer tourist market. Others noted that the tax would be too steep for many visitors, who might choose to take their business elsewhere or spend less in other areas, such as eating out. Homer already carries a sales tax of 7.5 percent, so the bed tax would push it near 12 percent.
Elsewhere on the peninsula, support for a bed tax has gained momentum.
Survey results were collected at the Soldotna Chamber of Commerce’s Breakfast and Benefits event in May, attended by more than 200 Soldotna Chamber member businesses. The tabulated results, released in the most current Homer Chamber of Commerce newsletter, showed 53 businesses want the tax and another 57 say they favor it if the money goes to support tourism infrastructure. This forms more than 50 percent of that voting body. Another 28 said they weren’t so sure the tax was a good idea, and 17 said they didn’t want it.
The City of Seward has had a bed tax for 18 years. The 4 percent tax fee goes to the Seward Chamber of Commerce specifically to market the city of Seward as a destination point for tourists and new companies. The residents of Seward voted for the tax in 1996, and so far, the system is getting a thumbs up from city officials and employers that rely heavily on that marketing, the Seward Phoenix Log reported.
Whether to place the issue on the ballot has been debated by the Kenai Borough Assembly on three occasions with public input. Twice the assembly voted it down without placing it on the ballot. Alternative versions have been proposed and those have been knocked down.
McClure, of Seward, said there are several reasons the bed tax has hit roadblocks at the borough level. One is that Seward already sees a heavy tourism sector.
“Some larger groups like CIRI think it’s unnecessary because they already spent a lot of money marketing,” she said. “Others think there are too many tourists as it is. Others don’t like the proposals that include giving a portion of the bed tax to schools or other programs. The opposition is a mixed bag.”
The city of Seward has already said on the record that it supports the bed tax at the borough level because any additional marketing for the region helps Seward without costing the city any more than its current tax. The city would opt out of a borough tax because it already has one in place.
At Tuesday night’s meeting, the first step was for the assembly to consider whether to pose the question to voters.
The ordinance, sponsored by Bill Smith, of Homer, proposes that 75 percent of the tax collected in unincorporated areas of the borough go to tourism promotion for the borough. The remaining 25 percent would be used for borough schools. Tax collected in cities would go to their coffers.
“I’m trying to keep pressure off the general mill rate, which hopefully if this bed tax passes, it will help do that,” Smith told the Homer Tribune.
Shanon Hamrick, executive director of the Kenai Peninsula Tourism Marketing Council, said that a 4 percent bed tax is estimated to bring in about $2.4 million, based on 2013 taxable accommodation sales numbers.
Of the $2.4 million, about $1.4 million would go back to cities, $796,609 would go to borough marketing and $265,536 would go to schools.
“In order for the borough to maintain our schools for as good as we can, we’re going to be looking at spending more money on them than we have been,” Smith said.
While other percentages and allocation amounts were considered, Hamrick said KPTMC proposed a 4 percent bed tax, the same as what the city of Seward currently has in place.
Homer and Seldovia both have sales tax rates of 7.5 percent. A 4 percent bed tax would create a total tax of 11.5 percent, still under Anchorage, Juneau and Sitka’s 12 percent bed tax rates.
“In many respects we have a competitive environment to get tourists to come, and so (I) just wanted to be within … a good, reasonable tax that we see in other communities,” Smith said.
As laid out in current code, an accommodation tax would be on a per-night basis. However, hotel or motel room rentals for 30 or more consecutive days would not be taxed. The tax would not be imposed until after April 1, 2015, to allow for businesses to make the bookkeeping transition.

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Filed under elections, Kenai Peninsula Borough, tourism

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