Assembly fails grocery tax, marijuana buffers

The Kenai Peninsula Borough Assembly failed two ordinances Tuesday: one that would have extended the nonprepared food tax and another that would have required more distance between marijuana establishments and certain types of businesses.

The non-prepared food items tax, commonly known as the grocery tax, has been a topic of discussion since the general election last October, when voters opted to repeal Soldotna’s authorization to collect year-round grocery tax. After the election, the tax returned to a nine-month exemption and three-month application pattern. Soldotna voters will participate in a special election Tuesday that will decide whether a commission will form that could draft a charter for Soldotna to become a home rule city, a move driven by the loss of revenue from the grocery tax.

Assembly member Dale Bagley, who represents Soldotna, introduced an ordinance to extend the tax from three months to six months. He said one part of it had to do with the lost revenue for Soldotna, but the change would also help businesses by lining up the tax with the fiscal quarters for businesses. Because the majority of Soldotna residents voted to keep the year-round tax, he said he felt he was listening to his constituents.

“This would tie it in with the fiscal quarters, and it would bring in more revenue for the cities of Soldotna and Homer,” Bagley said.

Many members of the public testified against the ordinance, saying the assembly should respect the past votes on the topic and leave the nine-month exemption as is. James Price, a Nikiski resident and one of the proponents of the citizens’ initiative, testified at the assembly’s Tuesday meeting that the struggle over the tax felt Sisyphean.

“I’ve gone and collected signatures on this issue,” Price said. “When I go to collect signatures, the biggest complaint I get from people is, ‘Why should I sign this initiative, James? The assembly is going to do what they want to do anyway.’ … I tell them to sign anyway because we have the opportunity to change things.”

Price and several other commenters urged the assembly not to pass the ordinance, citing reasons ranging from excessive burden on families shopping for groceries to reminders that the borough administration is in the process of reviewing the sales tax code entirely and that the grocery tax seems premature.

Others commented on elements of the proposed change. Patricia Patterson, the owner of Lucky Raven Tobacco just outside Soldotna, said she would love it if the tax exemption lined up with the fiscal quarters because reporting is so difficult now. However, she said she would like to see the assembly revisit the definition of nonprepared food items as well.

“I take gum and take sales tax out of it, candy bars,” Patterson said. “The food that is not food does not have sales tax in it. I think this borough could actually make some of the money they need … if they just rewrote what is taxed and what is not taxed.”

Several assembly members said they understood the reason for the proposed ordinance but had listened to the public and would have to vote against it. The assembly failed the ordinance 2-7.

The borough assembly also voted down an ordinance that would have set a mandatory distance between marijuana businesses and local option zoning districts and would have changed the way that those distances are measured from the shortest pedestrian walking route to a straight line between property lines. Assembly member Stan Welles, who introduced the ordinance, read a study on the negative effects of marijuana in his rationale and said one effect would be that the number of stores overall would be reduced.

“I agree, the distance isn’t going to mean a thing,” Welles said at the meeting. “But by distance, you do reduce the number of these entities in our community.”

The ordinance came on the heels of another that overhauled the borough code for forming local option zoning districts, which the assembly has been considering since December 2015. The assembly passed the rewrite unanimously Tuesday.

Multiple members of the public spoke out against Welles’ ordinance, saying it was singling out marijuana establishments and making it harder to find a place to build one; others spoke in favor, saying they wanted to keep marijuana as far from anywhere children could be as possible.

Assembly member Brent Johnson amended Welles’ ordinance to eliminate a clause including local option zones, but it would leave the change in measuring distances. Johnson said the shortest pedestrian walking route is too subjective and he would prefer the borough planning department measure the mandatory distances between marijuana establishments and schools, churches and correctional facilities from property line to property line.

“We don’t know how (the presence of the marijuana industry) is going to turn out because we’re at a crossroads,” Johnson said. “One thing we do know is that children are valuable and that we want to protect children as much as we can. Changing the way measuring is done isn’t really going to affect that many people.”

Other members of the assembly disagreed, saying it was unfair to change the rules now that marijuana business entrepreneurs had begun applying for licenses and sunk expense into their applications. The ordinance failed to pass by a 6-3 vote.

The measurement system for the mandatory distances around marijuana businesses — 1,000 feet from schools and 500 from churches, correctional facilities and recreation or youth centers — will still be measured by the shortest pedestrian walking route, the same way mandatory distances for alcohol licenses are measured in the borough.

Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.

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