Juneau Assembly considers ballot questions to lower food tax, raise pot tax

Juneau City Hall

A group walks in front of Juneau City Hall on May 10. (Photo by Rashah McChesney/KTOO)

Juneau voters have been approving and renewing temporary sales taxes for 33 years.

They’ll probably be asked again in the October municipal elections ahead of a 3 percent temporary sales tax’s 2017 sunset date. In committee Monday, the Juneau Assembly took a step toward putting that sales tax in front of voters again.

It makes up about one-quarter of the city’s budget. The city could collect more than $26 million from the tax next year. The funds are spent on government operations, capital improvements, school activities and general government spending.

Next Monday, the full assembly will consider the ordinance. It would put two questions to voters: Should the tax should be renewed again? And, should it be permanent?

Another question that could end up in front of voters is whether food should be taxed the same as everything else. Deputy Mayor Jesse Kiehl asked assembly members to consider a lower tax on food.

“I asked the finance director to estimate what the loss of city revenue would be if we reduced the sales tax on food by 1 percent. In effect, 5 percent on tissues and t-shirts and cell phones and 4 percent on groceries,” Kiehl said.

The city could lose just over $1 million annually, according to a spreadsheet the finance director circulated in committee.

The assembly has considered reducing or completely scrapping its sales tax on food. That discussion was coupled with the body’s controversial decision to scale back seniors’ sales tax exemptions last year.

Assembly member Jamie Bursell said there could be a backlash if the sales tax structure changed again.

“I think that we would have a large number of people, specifically the seniors in town looking at this, like, if we’re saying $1 million is something we don’t really need, we can lower that tax rate, then why did the exemptions get taken away in the first place? I’m just thinking that they would come back with that,” Bursell said. “My question is, do we need $1 million or don’t we?”

Proponents of reducing the tax on food say they want to make it easier for low-income Juneau residents to survive.

Kiehl told assembly members that food is one area of spending for a family that cannot be avoided.

“Frankly, that we tax groceries at all is — my Yiddish grandmother would have called it a shanda. It is for shame,” he said.

The committee also voted to send an ordinance to raise the sales tax on retail marijuana from 5 percent to 8 percent to the full assembly. The city estimates it could raise up to $455,000 extra.

The assembly’s next meeting is May 13.

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