Assembly set to vote on bed tax

Mar 5, 2018


The vote to put the bed tax question on the fall ballot has been on hold since December.

The Kenai Peninsula Borough Assembly is set to finally vote on a bed tax ballot measure this week. This latest attempt at a bed tax was first introduced late last year, but was postponed until

Tuesday’s meeting.



Different efforts have been made to get a bed tax for the borough for years. More recently, a four percent tax failed as a ballot measure in 2014. Last year, amid a mayoral election that hinged largely on the borough’s $4 million budget gap, another bed tax proposal was left off the fall ballot so that voters could weigh in on a bump in sales tax. That too failed. So here we are again, with many of the same budget concerns and yet another attempt to get a few more dollars out visitors before they leave. Assembly member Dale Bagely introduced the latest ordinance that would put a six percent bed tax on the ballot this fall. That was back in December. And actually, even that was a slightly amended version. The original called for an eight percent tax in the borough and just four percent in cities with a similar tax.

“So this was an ordinance that we did work on last year, or similar to one we worked on last year. It was introduced as eight and four and at the time, we made motions to take it to six and three and to add RVs. But it failed (the Assembly) 4-4. So I’m bringing it back with the six and three and the RV sites in it. And it does go to the voters on October 2nd, 2018," Bagley said in December.

Maybe it goes to the voters on October 2nd. Despite those ongoing budget concerns, picking up free money from tourists still doesn’t have the full backing of the borough administration under Mayor Charlie Pierce. As he continues to look for a way to bridge the budget gap this year without new taxes, he says new revenue will have to be part of the mix in the years ahead. But that’s probably only going to happen by way of ballot initiative. Don’t expect it out of the Mayor’s office.

“I can deal with new taxes. I think everybody out there can. But what they want to see and want to know is what did you to get us to where you can justify a new revenue source and the only way to get that is via a tax. I’m being honest. I’ve looked at it. We’re going to need a new tax. And we need to talk about it and explain it so that there’s some confidence in the process," Pierce said.

This current version does look a little different than previous attempts. The numbers, as noted, are a little different. At six percent, the bed tax would likely generate in excess of $3 million for the borough. That’s a good start to closing the budget gap. The new version also applies the tax to RV’s. That’s not something that had been in the mix before, and is generally seen as a more equitable way to apply the tax. What didn’t make the cut was getting some of the money raised back into the Kenai Peninsula Tourism and Marketing Council and the Kenai Peninsula Economic Development District. Bagely said in December, when the measure was postponed, that they would try to figure out a mechanism for that, however, no language like it appears in the ordinance the assembly will vote on Tuesday.