Starting next year, agriculture businesses in Ketchikan can apply for an exemption from borough property taxes.
The Borough Assembly approved that exemption during their Oct. 7 meeting in an effort to encourage local food production. Member Grant EchoHawk spoke about the risks of the island community relying too heavily on outside shipments.
“Going back to the COVID pandemic, any kind of interruption in shipment has [a] pretty devastating impact on our community,” EchoHawk said. “Being able to foster growth in the agriculture space, I think, will have a benefit to our community and [in] ensuring that we have food independence.”
The tax break will only apply for ten years, a limitation suggested by EchoHawk. He said he wanted to help businesses get a foothold in the community, but that eventually those tax revenues should be collected again.
“The first couple years are always the most critical with a new business,” EchoHawk said. “They can then figure out the infrastructure, figure out the logistics, marketing, distribution, and then the goal is, at the end of 10 years, free up those funds so we can use it elsewhere in the community.”
The subsidy applies to any land or structures used for farming and producing at least $2,500 worth of agricultural products. And thanks to an amendment by the state legislature this year, it also covers mariculture businesses, like kelp farming, which the assembly noted has potential for growth in the coming years.
Staff estimated that based on current eligible businesses, the borough would lose at most about $10,000 annually in tax revenue from the exemption. Borough attorney Glenn Brown told KRBD he expected the actual amount would be much smaller.
In the same meeting, the assembly eliminated the $100 application fee for leasing borough-owned tidelands, removing a small hurdle to potential mariculture or tourism businesses.
