The Kenai Peninsula Borough building, pictured Sept. 12, 2018, in Soldotna, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)

The Kenai Peninsula Borough building, pictured Sept. 12, 2018, in Soldotna, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)

Ordinance removing voter approval on sale tax cap increase withdrawn

The cap has been $500 since 1964 when the borough was established.

An ordinance removing required voter approval to increase the borough’s sale tax cap was withdrawn from Tuesday’s Kenai Peninsula Borough Assembly meeting agenda.

The ordinance, introduced by assembly members Kelly Cooper and Kenn Carpenter, would not raise the sales tax cap, which has been $500 since 1964 when the borough was established.

Carpenter, who was a co-sponsor of the ordinance moved to take it off the agenda. He said he included it on the agenda to get voter feedback, and said he has received said feedback.

Another ordinance to increase the sales tax cap from $500 to $1,000 was introduced at Tuesday’s meeting, and will be heard at the August assembly meeting.

Prior to 2005, voter approval was not required to increase the cap on the amount of sales subject to the borough’s sales tax.

In 2005, voters approved an initiative imposing a requirement that any increase in the maximum sales tax may not take effect until ratified by voters during borough elections.

In a May 23 memo from Cooper and Carpenter, they said $500 in 1964 would be worth $3,222, due to inflation.

“In the last few years increased sales tax and property tax exemptions, reductions in state funding for schools and local governments, and the ongoing needs for borough services have made it increasingly difficult for the assembly to balance the budget,” the memo said.

Two recent attempts to raise the sales tax cap failed at the ballot, according to the memo.

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