The Kenai Peninsula Borough Assembly on Tuesday rejected an ordinance that would repeal the winter grocery tax exemption.
However, the option to reduce the seasonal sales tax exemption on groceries is not completely off of the table.
During Tuesday’s meeting, the assembly postponed a vote on assembly president Dale Bagley’s proposed substitute ordinance that would keep the sales tax exemption in effect for six months of the year, from Oct. 1 to March 31.
“The voters have approved this seasonal sales tax exemption for groceries twice in the last year,” Bagley wrote in a memo. “For the assembly to completely eliminate this exemption would be contrary to their wishes.”
President of the Kenai Peninsula Educators Association David Brighton said he was in favor of the tax, which would go toward funding for education through the Kenai Peninsula Borough School District.
“We pay less taxes than any other state,” Brighton said. “Passing this tax keeps the district whole.”
Having a diversified revenue stream is important for every government, Brighton said. Taxing groceries is one way to accomplish that, he said.
Soldotna resident Linda Murphy said it was relevant to consider that the last time the issue was put before Kenai Peninsula voters the state was not experiencing financial constraints. The city of Soldotna would lose $785,000 if it was not able to collect the sales tax year round, which translates to a 2.1 mill increase in property tax.
“This repeal is an absolute necessity,” said resident Lori Kapp.
James Price, who has been supporting the sales tax exemption that was “passed by a majority vote,” in 2008, and 2011, said the borough has a history of repealing decisions made by Kenai Peninsula voters.
“There are better ways to get money than tax it off the backs of the people who buy groceries,” Price said.
Kasilof resident George Pierce said to repeal the exemption would be a “slap in the face to voters.”
Soldotna resident Daniel Lynch said that for people with fixed incomes who barely have enough to make it through the week, the sales tax exemption makes the difference between being able to feed themselves.
Nikiski resident Jesse Bjorkman said he usually fights against taxes, but funding education should be the priority.
Assembly member Kelly Wolf said he was torn between Bagley’s ordinance, which he called the “compromise” and letting “the people speak” by upholding the exemption.
Living in state where minimal state taxes are garnered, permanent fund dividends are received and senior citizens have property tax exemptions, making the choice to pay a little more on groceries is a realist decision, Gilman said.
Following the assembly’s discussion and rejection of Gilman’s ordinance, Bagley suggested tabling the six-month taxation ordinance until the next meeting on April 7.
Reach Kelly Sullivan at kelly.sullivan@peninsulaclarion.com.
