Resolution 16-044 Supporting Kenai Peninsula Borough Ordinance 2016-09 Seasonal Non-Prepared Food Items

CITY OF HOMER
HOMER, ALASKA

Lewis

RESOLUTION 16-044

A RESOLUTION OF THE CITY COUNCIL OF HOMER, ALASKA, SUPPORTING KENAI PENINSULA BOROUGH ORDINANCE 2016-09, AMENDING KPB 5.18.200 TO CHANGE THE SEASONAL EXEMPTION FROM SALES TAXES OF NON-PREPARED FOOD ITEMS TO APPLY FROM OCTOBER 1 TO MARCH 31 OF EACH YEAR.

WHEREAS, In 2008 Kenai Peninsula Borough (“Borough”)  voters passed Initiative Ordinance 2008-01 exempting non-prepared foods from sales tax from September 1st through May 31st each year; and

WHEREAS, In 2011 Borough voters defeated Proposition 1 which would have repealed the Borough’s seasonal exemption of sales tax of non-prepared food items; and

WHEREAS, In 2015 Borough voters passed Proposition 1 which repealed a 2008 borough ordinance that allowed general law cities like Homer to levy their own sales taxes on non-prepared food items; and

WHEREAS, The Kenai Peninsula Borough is the tax collecting agency for the City of Homer; and

WHEREAS, This seasonal sales tax exemption has resulted in annual reductions in Homer sales tax revenues of approximately $735,501 in fiscal year 2011, $794,163 in fiscal year 2012, $812,065 for fiscal year 2013, and $833,473 for fiscal year 2014; and

WHEREAS, Due to the State of Alaska’s projected severe budget deficit, proposed State budget cuts will seriously impact the Kenai Peninsula Borough and its cities this year through an anticipated decrease in revenue sharing, significantly reduced school district funding , and substantially reduced capital project grants and appropriations; and

WHEREAS, In accordance with Homer City Code 9.16.100, changing the exemption period would require  Homer City Council adopt an Ordinance; and

WHEREAS, Passage of KPB Ordinance 2016-09 would reduce the City of Homer seasonal sales tax exemption for non-prepared foods from 9 months to 6 months and be part of a solution for continuing to provide City services beyond 2019 when the suspension of HART ends; and

 WHEREAS, Kenai Peninsula Borough Assembly Member Dale Bagley introduced Ordinance 2016-09 to amend KPB 5.18.200 to change the seasonal exemption from sales taxes of non-prepared food items to apply from October 1 to March 31 of each year; and

WHEREAS, The dates of the exemption period coincide with typical quarterly filing periods and helps the sellers administer the exemption; and

WHEREAS, Making this ordinance effective July 1, 2016, would keep the exemption in place until May 31 this year, providing time for the local businesses to adjust their systems.

NOW, THEREFORE, BE IT RESOLVED that the Homer City Council supports Kenai Peninsula Borough adoption of Ordinance 2016-09.

PASSED AND ADOPTED by the Homer City Council this 25th day of April, 2016.

CITY OF HOMER

_________________________________________
DAVID G. LEWIS, MAYOR PRO TEMPORE
 

ATTEST:

______________________________
JO JOHNSON, MMC, CITY CLERK

Fiscal Note: N/A