June 07, 2004
Monday

A few weeks ago, a friend asked me if approving the half-cent sales tax would fix the borough's financial problems. I told her it would help but it wouldn't totally solve the problem. The other side of the coin - the question that she didn't ask - is "would not passing the sales tax proposal make the situation worse?" The answer to that is an unqualified yes.

The sales tax increase is just one part of a strategy, the first part of which was to make a significant cut in last year's budget. Several employees have been laid off or will be laid off at the beginning of July. Some whole departments, such as the bus service, are being restructured. Unfortunately, there are significant increases in such areas as insurance and benefits that are causing other parts of the budget to rise beyond our control and the net result is that budget cuts are not helping as much as we hoped they would. We are finally at the point where we have to think about cutting whole programs if we want to make the budget significantly smaller.

The third part of the strategy is a half mill property tax increase. I have also heard that property taxes - in particular - are already too high. The unfortunate truth is that property taxes are actually lower than they need to be to sustain the appropriate level of services. Traditionally, borough taxes have been in the 7 to 8 mill range but a past borough assembly lowered taxes into the 6 mill range when it was flush with the federal disaster aid. That wasn't a sustainable level and we are paying for that decision now.

Overall, this three pronged approach is a solution in which everyone will have something to be unhappy about, but we're beyond the stage of going with the flow and hoping things get better.

If the sales tax doesn't pass, then we are looking at a significant property tax increase; at least a full mill increase to 8 mills and possibly higher. One can argue the merits of sales tax increases versus property tax increases, but at this point in time a sales tax increase raises more funds than a similarly sized property tax increase. A sales tax increase also spreads the responsibility to everyone who purchases items in this community, not just the property owners.

If the sales tax increase fails and the assembly chooses not to raise the property tax higher than 8 mills, the result will be more significant budget cuts and the likelihood that entire programs will be cut. Two of the most visible targets are the bus service and the parks and recreation budget - more specificly the operation of the Kayhi pool.

I have received several calls in recent days from users of both the buses and the pool urging me not to cut service in those areas. They don't have to convince me.

As a child, I frequently rode the local bus into town. Sometimes I still do. Not every Ketchikan resident can afford a car. By cutting the bus service, we are penalizing those who need it most. With Ketchikan's weather and elogated shape public transportation is a necessity, not a frill.

I have also had the experience of knowing several children who died in drowning accidents. We forget now, but before the pools were built in the early 1970s it was painfully normal for children to drown in Ketchikan each year. Now it is a rare thing. You can't put a price on that.

I've certainly heard many arguments against increases in local taxes. I've heard that the money (or the services it pays for) is not needed or that the economy will improve and we'll find the money somewhere and that nothing will really change. But I can't look into a crystal ball and say that things will be better in the very near future. All I can do is make decisions based on what we know now, before the end of the fiscal year, on June 30.

What I do know is that cutting the budget and raising sales and property taxes relatively small amounts will bring things into balance and provide borough residents with the services that they need in order to live here and prosper. Please vote yes on the half-cent sales tax increase on Tuesday.

Dave Kiffer
Ketchikan, AK - USA

 

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