Soldotna residents ruled out a move to being a home-rule city in a special election Tuesday, voting down a proposal to form a commission to draft a new charter.
According to unofficial results posted after the polls closed at 8 p.m. Tuesday, the measure failed by a margin of 63.68 percent to 36.32 percent with 298 votes opposed to 170 in favor. Those 468 votes represent a voter turnout of about 14.56 percent. That’s consistent with voter turnout in most Soldotna elections, said City Clerk Shellie Saner.
“It’s about what I’m expecting. I expected us to keep where we are with our average on the normal election years,” Saner said. “… Our normal turnouts are, in the years that there is a borough mayors race, they’re generally higher, but our average turnout on a normal year are 500 to 600.”
Becoming a home-rule city would give Soldotna greater ability to determine it’s own powers and policies, versus its current status as a first-class city. The issue largely driving the vote is a proposed exemption of sales taxes on nonprepared foods in the winter. A previous boroughwide voter initiative stopped the borough from collecting sales taxes on groceries in the winter, but the Kenai Peninsula Borough Assembly passed an ordinance that general-law cities would still continue to do so. The measure will come up for borough vote in the October 2015 general election. If it passes, Soldotna will no longer collect its 3 percent sales tax on groceries in the winter.
That could have anywhere from a $785,000 to $1.2 million hit on the city’s budget, administration has said. So the move to home rule was an attempt to get ahead of that curve by giving the city to ability to set its own taxation policy.
City Council Member Keith Baxter was one of seven residents who threw their hat in the ring to be on the charter commission. He said he saw the move to home rule as a way to limit taxes in Soldotna, as the council has discussed raising property taxes if the sales tax revenue is lost. He doesn’t like that idea, because property taxes will be a larger burden on Soldotna residents, rather than sales taxes, which are paid by anyone shopping in Soldotna, he said.
“If we were to make it up dollar for dollar in property tax, my property tax would have to increase 400 percent, so that’s a tough one to swallow if you live in city limits and are raising a young family and you pay property tax,” Baxter said.
Those supporting the measure have said it was about having local control over issues like taxation, rather than having to comply with the direction of the borough. Those opposed have said the proposed move to home rule was just a way to circumvent the wishes of voters who passed the winter grocery sales tax exemption.
“We should have the opportunity to make decisions locally, about our tax structure and things of that nature, and I guess this is a preview of how people locally inside city limits do feel about their sales tax,” Baxter said.”
But the matter wasn’t just about the sales tax issue, according to voters Tuesday. A new Soldotna resident, here about a year, who gave only his first name as Ken, said he voted against forming a charter commission because he didn’t have a good enough idea of how far the change in city powers would go.
“I felt like they never said why they wanted to. They said it would give them more power, they didn’t say to do what,” he said.
Adeena Wilcox also noted a lack of information as reason for her no vote.
“I don’t think a lot of the residents are informed enough on it and I think the election happened a little too quickly for most voters, and I think that if there were something else on the ballot we’d probably have a larger turnout,” she said.
Baxter said that, in retrospect, he thinks those in favor of home rule, himself included, should have done more campaigning and voter outreach on the issue.
“I was hopeful that people who weighed the issue on merits of the issue would agree that home rule would be a better path forward for Soldotna. And after the vote that just appears not to be the case,” he said.
So Soldotna will remain a first-class city. Baxter said he doesn’t yet know how the council will now approach the grocery tax issue, if the city is forced to honor the tax exemption after the October election.
Soldotna does have a healthy budgetary reserve and could even run a short-time deficit of a million dollars if need be, Baxter said, though he prefers a balanced budget.
“Soldotna is going to be fine moving forward,” Baxter said. “We do still have property tax revenue. We do still have sales tax revenue. We do still have a guarantee we will be able to collect sales tax on nonprepared foods even if the summer peak months, so that’s all very positive. Yeah, I’m just a little surprised that it wasn’t closer.
Election results are posted on the city’s Elections page on its website, at http://www.ci.soldotna.ak.us.