Resolution 18-047 Supporting Kenai Peninsula Borough Ordinance 2018-12, Increasing the Borough Sales Tax Rate 0.5% Subject to the Approval of the Voters for the Purpose of Funding Education.

CITY OF HOMER

HOMER, ALASKA
RESOLUTION 18-047

Mayor

A RESOLUTION OF THE CITY COUNCIL OF HOMER, ALASKA,SUPPORTING KENAI PENINSULA BOROUGH ORDINANCE 2018-12
INCREASING THE BOROUGH SALES TAX RATE FROM 3.0 PERCENT TO 3.5 PERCENT, SUBJECT TO THE APPROVAL OF THE VOTERS,
FOR THE PURPOSES OF FUNDING EDUCATION.

WHEREAS, The Kenai Peninsula Borough is facing difficult fiscal times that has resulted in the need for new revenue to fund schools and balance the  budget without  deficit spending;and

WHEREAS, Spending savings is not a long term sustainable option; and

WHEREAS, It is in the best interest of the City of Homer to have adequately funded Borough services, especially schools and education; and

WHEREAS, The Kenai Peninsula Mayors, Council members and City Managers met in a work session with the Kenai Peninsula Borough Assembly and Administration on May 7th to discuss Borough revenue challenges; and
 

WHEREAS, At the work session the Borough Mayor indicted the need for a strong and solid voice among Peninsula communities regarding how to solve the revenue issues facing the Borough; and

WHEREAS, A number of revenue options were discussed including a drastic increase from 3% to 5% of Borough sales tax coupled with a 1 mill decrease in the mill rate; and

WHEREAS, The City of Homer depends on sales tax revenue to fund over 70% of general fund services; and

WHEREAS, Sales tax is an important mechanism for the City to capture revenue from area residents who use City services; and
 

WHEREAS, A5% Borough sales tax on top of the 4.5% City of Homer sales tax would leave no room for even a modest City of Homer sales tax increase to fund needed capital projects such as the Homer Police Station; and
 

WHEREAS, While the City of Homer can support a modest .5% increase of the  Borough sales tax anything more than .5% would severely negatively impact businesses· in the City of Homer; and

WHEREAS, A reduction in the mill rate is ill-advised during tight financial times; and

WHEREAS, Any increase in sales tax disproportionately affects  the hospitality industry since sales tax is assessed on lodging transactions on a daily basis; and

WHEREAS, Capturing revenues lost through property and sales tax exemptions should be re-examined  by the Assembly  as an option for addressing any future revenue shortfalls rather than additional sales tax increases.

NOW, THEREFORE, BE IT RESOLVED that the City Council of Homer, Alaska, supports

Kenai Peninsula Borough Ordinance 2018-12 increasing the Borough sales tax rate from 3.0 percent to 3.5 percent, subject to the approval of the voters, for the purposes funding education.

 PASSED AND ADOPTED by the Homer City Council this 14th day of May, 2018.

CITY OF HOMER

BRYAN ZAK, MAYOR

ATTEST:

 MELISSA JACOBSEN, MMC, CITY CLERK

   Fiscal Note: N/A