The decision to extend the seasonal one-percent sales tax increase for two additional years to pay down school bonds has not been very controversial compared to many propositions put before Sitka voters recently. But there are mixed opinions about the issue.
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You can approach prop 1 with a deep, institutional memory of Sitka’s finances over the last twenty years. Or you can look at it like Tim Fulton, who serves on Sitka’s school board. He says prop 1 will free up needed cash.
“If we put relief on the General Fund, there’s more access to funding for our schools.”
Prop 1 would move nearly $2-million in debt from the General Fund column in the city’s ledgers, to the column under 1-percent seasonal sales tax. While this is really no more than an accounting maneuver, it happens to save the General Fund about $380,000 dollars in payments each year.
The savings will not necessarily be forwarded to schools. But, Fulton says, it’s not a bad start.
“Honestly, there isn’t an arrangement. But I think that this assembly — and I’m very optimistic about our next assembly candidates — that they’re willing to work with the schools, and they see education as a priority.”
Assembly member Mike Reif might agree. “It’s really neat to see that this community has embraced this way of doing things to keep our schools in very nice condition.”
Reif co-sponsored the ballot ordinance, with Thor Christianson. Sitka is carrying a total of about $30-million in debt on school bonds — 70-percent of which will be reimbursed from the state. These projects, like the Performing Arts Center and other major school improvements, were originally funded through the seasonal sales tax.
The bonds in prop 1 — for the remodel of Sitka High School and Baranof Elementary — were passed in 1996, prior to the seasonal sales tax. But Reif says there’s room in the seasonal sales tax fund to cover those bonds.
“We’re actually collecting a little bit more money in seasonal sales tax, than we’re obligated to pay the state each year for our bonds.”
It will mean keeping the seasonal 1-percent sales tax around a couple of years longer — until 2024, rather than 2022. If tax revenues continue to rise, it would be possible to pay down the bonds sooner.
But there are still those who think extending the seasonal sales tax is a breech of faith with the public. Fred Reeder testified on the ballot ordinance before the assembly when it was first introduced in February, and his opinion hasn’t changed. I called him about this issue and he told me “If you go to voters and tell them a tax is going to sunset, you’ve got to be honest and leave it where it is.”
Reeder is a former mayor, and the port director for Cruise Lines Agencies of Alaska. He told me that he went to the assembly just to speak for himself: He is genuinely worried about the public losing faith in government if the tax never sunsets.
Not everyone shares that worry. Aaron Swanson is running for assembly in this election, saying he’d like to represent a younger constituency. Extending the sunset is not a problem for him.
“My thought is that instead of fluctuating the tax between 5- and 6-percent in the fall and in the spring, is to just leave it at 6-percent year round.”
As a school board member, Tim Fulton says he is worried about the perception that the goal line is moving. But with this latest remodel of Pacific High, he thinks the district has pretty much completed the work it started when it first started bonding back in the nineties.
“I don’t see us coming back to the citizens of Sitka for increasing this seasonal sales tax anymore.”
But, Fulton says, he wouldn’t mind having a conversation about Sitkan’s expectations for their schools, and how to fund them.