Since 2008, Homer residents have enjoyed a seasonal tax holiday on non-prepared foods, meaning no borough or city taxes at the grocery store between Sept. 1st and May 31st of each year. But the 4.5% city sales tax might be making a comeback in the Homer City Council’s ongoing conversation about next year’s budget.
The grocery tax holiday first came into being when Kenai Peninsula Borough voters approved it at the ballot box and the Homer City Council then decided to follow suit, including the city sales tax in the bargain.
Since that time, however, the grocery tax holiday – and its estimated impact of at least $750,000 a year on the city budget – has come under repeated fire from council members who have looked to undo what they did in 2008.
In 2009, the issue came to the ballot box again and Homer voters – by a large margin – voted to keep the tax exemption.
But the issue keeps coming up and now council member Bryan Zak is taking a different tack to do away with the grocery tax holiday by inserting it as a budget amendment in the city’s proposed 2013 budget.
"Right now there's no funding for a lot ... of the things that are required to be provided by the city," said Zak. "There are a lot of services that ... we're going to have to start making cuts."
Zak says he is already getting some feedback on his idea from members of the community. He says the reimplementation of the grocery tax in the winter time would be a good way to collect revenue from residents outside the City of Homer, who use city services like the library.
He first floated the idea during a council budget discussion Oct. 22nd. At that meeting, Zak told council members he wanted the see the extra money go to a variety of budget measures, including a one percent Cost-of-Living raise for city employees, $50,000 in funding for the Homer Chamber of Commerce and another $50,000 for the Homer Senior Center.
Council members Francie Roberts, Beau Burgess and David Lewis said they were open to considering Zak’s idea. Council member Barbara Howard said she might be supportive if the budget priorities were changed.
"I could not support (funding for) the Chamber or the senior center ... those are discretionary funds," said Howard. "I would only support the tax if it worked for essential services only."
If Zak’s proposal fails, he says he might explore proposing it as a stand-alone ordinance.
Meanwhile, council member David Lewis has said he would like to introduce new restrictions to the grocery tax exemption that would exclude sugary, unhealthy snack foods. Lewis says he will have such an ordinance on the table in time for the council’s next meeting Nov. 26th.