The Kenai Peninsula Borough Assembly met Tuesday night. It approved a new contract with Central Peninsula Hospital that will cover the next decade. The Assembly also heard another round of testimony about a proposed borough-wide bed tax.
Borough Mayor Mike Navarre’s administration is looking for ways to shore up the borough budget on its way out. Sales tax adjustments have been batted around, but the measure that’s getting all the attention right now, is a bed tax.
It’s not a new idea, and in the past it hasn’t found a lot of support. The eight percent that was initially proposed was estimated to generate $3.8 million. That would nearly cover the $4.1 million dollar deficit in this year’s budget.
Lodge owners, like Terry Johnson, who runs the Salmon Catcher Lodge in Kenai, say they’ve got enough competition to fill their rooms without raising prices to accommodate a borough tax.
"You’re not taxing the dipnetters, Fred Meyers, Wal-Mart...so they get free parking, they come down and they bag fish. They put nothing into the economy other than buying food and maybe a license. So, the reason I subdivided is because I’m ready to sell.”
Mike Warburton owns Ocean Shores Hotel in Homer. He suggested to the assembly that maybe it’s time to increase the sales tax cap, which has stood at $500 since the borough adopted a sales tax back in the 60’s.
“When I was a kid in Moose Pass, my mom was pushing for a sales tax. She said it would help keep property taxes down and Anchorage people would help pay for the Kenai Peninsula. I didn’t realize when it went in ‘65, the tax cap was $500 then and hasn’t changed in over half a century. It’s way behind the curve.”
The Assembly voted in favor of member Dale Bagely’s amendment, lowering the tax to 6 percent. A final vote on the measure will happen at the next meeting August 15th.