Opposed to a Kenai Peninsula Borough As-sembly vote Tuesday to increase the borough sales tax to 3 percent effective in October, the group Alli-ance of Concerned Taxpayers, or ACT, filed two initiative petitions with the borough clerk's office Wednesday aimed at reversing that decision at the ballot box.
The first initiative would lower the sales tax cap to 2 percent, the current sales tax. The second also would cap the sales tax at 2 percent, but would require that future sales tax increases be approved by 60 percent of voters.
Sponsors plan to place one of the two initiatives on the fall municipal ballot.
The referendum was written in response to Mayor Dale Bagley's revenue enhancement Ordinance 2005-09, which among other things, allows for an increase in the boroughwide sales tax to 3 percent.
"The intent of these initiatives is not eliminating future tax hikes, but to require voter approval for increases as required by law," Fred Sturman, an initiative sponsor, said in a press release Thursday.
ACT argues that the administration of Bagley simply ignores laws it doesn't like by claiming a public vote is not needed to raise the sales tax. ACT says Alaska statutes say new sales and use tax or an increase in the rate of levy of a sales tax approved by ordinance does not take effect until ratified by a majority of the voters at an election.
If the initiatives were approved by the clerk's office, sponsors would be required to collect 1,530 signatures from registered voters of the borough within 90 days.
James Price of ACT said he questioned why the borough administration chose to raise taxes rather than downsize borough government.
Efforts at cutting government have been made, however. The borough budget adopted Thursday sliced General Fund spending by almost $45,000 and reduced spending in all funds by more than $300,000. Those cuts include some personnel, as well as other line items.
The borough has been facing serious cuts in state aid and increases in retirement and insurance coverage costs.
