Ketchikan Assembly to discuss revenue options

Ways to increase revenue for borough and school services is the subject of a work session scheduled during Tuesday’s regular Ketchikan Gateway Borough Assembly meeting.

The assembly will meet Tuesday instead of its usual Monday because of the President’s Day holiday.

During a policy discussion in mid-January, the assembly asked borough staff to look into various revenue options. They include extending the voter-approved tobacco excise tax, and dedicating 100 percent of the proceeds to local schools.

Currently, 85 percent of the tobacco tax goes to schools, totaling about $1 million a year. According to the borough, allocating the full amount would add about $200,000 a year for education.

The tobacco tax is set to expire at the end of 2021. The assembly could extend it and amend the allocation, or let it expire and bring forward a new tobacco tax ordinance.

Another proposal is to eliminate the in-city exemption for the borough’s transient occupancy tax – a hotel tax. Currently, the borough doesn’t charge that 4-percent fee inside city limits because the City of Ketchikan collects its own 7-percent hotel tax. If the borough removes that exemption, it could collect about $400,000 a year paid by those renting rooms, according to borough information.

Another proposal would increase the borough’s hotel tax to 6 percent.

Increasing the sales tax cap is an annual discussion. The borough currently has a $1,000 sales tax cap on individual items. That means a piece of jewelry, for example, that costs $4,000 would be taxed only on the first $1,000.

Changing the tax cap to a proposed $2,000 would most likely require cooperation between the city and borough. Some local elected officials have also suggested raising the tax cap on specific categories, such as jewelry.

Another proposal is a car rental tax. Each 1-percent rate increase would bring in about $20,000, according to the borough.

Tuesday’s assembly meeting starts at 5:30 p.m. in borough assembly chambers at the White Cliff building. Public comment will be heard at the start of the meeting.