Focus of Bed Tax Debate on Money, Not Voters

Shaylon Cochran

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     Much like the last two Assembly meetings, the actual question before the body didn’t get much of the attention. The ordinance that was, and still is up for debate simply asks whether or not to put the question on the fall ballot: Shall the Kenai Peninsula Borough Ordinance providing for the imposition of up to 4% transient accommodations tax be ratified?

     That changed at the meeting; it's now down to 3%. But for many who testified, that was still too much.

     “We’re against the bed tax concept because your sales tax is already designed to tax visitors the way it’s structured,” said Kirk Hoessle.

     Even though the specific question was about what will be on the ballot, the fact that that question has to do with taxes is what dominated the conversation.

     Many lodge owners and others in the industry argue that even if the tax doesn’t dissuade people from visiting, it will leave less money in their pockets to spend while they’re on vacation. Another argument was that the Peninsula has too many tourists as it is. Places like Cooper Landing already lack the infrastructure to safely accommodate the huge rush of visitors they get now.

     What a lot of the debate boils down to is the funding of tourism and marketing on the Kenai. For more than two decades, the Borough has exercised its authority to promote itself through the Kenai Peninsula Tourism and Marketing Council, KPTMC. And every year at budget time, there’s lengthy discussion about whether the Borough should continue to fund that organization. It’s received $300,000 in grants per year for the last six years. It’s estimated that the new tax would generate somewhere around $2 million. Promotion dollars should come from all sectors of the tourism industry, not just the hotels and inns, said Alicia Maltby, executive director of the Alaska Hotel and Lodging Association.

     “It’s targeting my membership, and then being used to market the entire industry and we can’t stand behind that," said Maltby.

      But supporters of the bed tax are hopeful that, if it does indeed end up on the ballot, voters will look to Seward. They’ve had a bed tax in place there since 1996, and have seen tremendous growth in tourism, not the drop in visitors some predict.

     Originally, the bed tax was to be split, with a portion going to the school district and the rest to tourism. The schools were dropped when the tax itself was dropped down to three percent. The ordinance did pass Tuesday night, by a 5 to 4 vote, but Assembly member Kelly Wolf moved for reconsideration. So there will be one more round of discussions at the next meeting August 5th before we know if this will be on the ballot or not.

 

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