Sitka's Crescent Harbor is one of many recent capital projects. Moderator Thad Poulson said, "Sitka's infrastructure is first-rate." But there were still serious concerns that Sitka was too expensive for young families. (Flickr photo/Kool Kats)

Sitka’s Crescent Harbor is one of many recent capital projects. Moderator Thad Poulson said, “Sitka’s infrastructure is first-rate.” But there were still serious concerns that Sitka was too expensive for young families. (Flickr photo/Kool Kats)

How bad are things in Sitka? The legislature is slashing the state budget, school funding is down, and local government is spending more than it brings in. But for a group of about 30 Sitkans who turned out on a beautiful spring evening to discuss the community’s future, the mood was optimistic. And while they agreed that some things were bad – like housing and food prices – most thought Sitka was facing a challenge rather than a crisis.

Downloadable audio.

The meeting was held in Harrigan Centennial Hall, which will close in a month and reopen at the end of next year, expanded and remodeled, shortly after Kettleson Library wraps up a similar overhaul.

Outside were a rebuilt harbor, a new seawalk, and 20 miles of repaved state highways.

Panelist Rachel Roy, with the Sitka Tribe, framed what she sees as the problem in Sitka .

“I think it’s necessary to be able to find ways to keep the community affordable. To keep people living here. To be able to operate businesses. To be able to start businesses. To be able to thrive in our community.”

The forum never strayed too far from its very first question: Is affordability a reasonable expectation in Sitka? Sentinel publisher Thad Poulson moderated the panel, which, in addition to Roy, was comprised of Sitka Sound Science Center director Lisa Busch, former municipal administrator Gary Paxton, Northern Southeast Regional Aquaculture general manager Steve Reifenstuhl, and insurance agent Mike Venneburg.

This is Lisa Busch.

“I really don’t think it’s the job of the government to make our lives affordable. The government doesn’t set the cost of goods. It doesn’t set salaries for private and non-profit sectors. It can control taxes, but it doesn’t control airfare. We live on an island, so transportation is always going to be expensive. Getting things here is always going to be expensive.”

Mike Venneburg has held a seat on the Sitka Economic Development Association for 18 years. He looked at affordability as part of a bigger picture.

“If you look at the schools and the hospital and some of the issues they’re having, growth is the thing that will fix things. If you look at institutions like that that are going to have costs that are going to increase — I mean Sitka’s a place that’s stayed on a very even keel for a long time. Our population’s the same as it was 20 years ago.”

Both Gary Paxton and Steve Reifenstuhl came down on the side of growth: Paxton, at the industrial park that now bears his name, and Reifenstuhl, in support of the continued expansion of Silver Bay Seafoods, the lead tenant at the park.

But there were members of the audience who felt this was missing the point. Owen Kindig recommended higher taxes on undeveloped land, to promote the construction of more housing. After housing, Charles Bingham touched the most sensitive affordability nerve in Sitka.

“From September, 2003, to 2011, our food costs rose 46.3 percent.”

Bingham read from a copy the Sitka Community Food Assessment, which was released last year.

“For a standard market basket our cost was 57-percent higher than Portland, Oregon, 37-percent higher than Anchorage, and 21-percent higher than Juneau. And that’s not sustainable.”

Food prices triggered some of the more robust exchanges of the evening. This is assembly member Michelle Putz, who attended in the audience.

Putz – Would we be willing to increase the mil rate by 3 or 4 mils so that…
Paxton – Absolutely not, Michelle!
Putz – …so that we all could not have to pay tax on food?

That was panelist Gary Paxton, who later apologized for his outburst.
The mil rate — and a mil is a tenth of a percent — is the Sitka property tax rate. It currently stands at six mils, or $6 of tax for every $1,000 in property.

Paxton thought higher property taxes would just be passed on to renters, many of the same people Putz wanted to relieve by eliminating the sales tax on food. But he was not able to close the door on the argument.

Panelist Lisa Busch also made this observation: "Sitka isn't gentrifying. It's getting older. And that actually represents an economic opportunity." (Flickr photo/Germán Parra)

Panelist Lisa Busch also made this observation: “Sitka isn’t gentrifying. It’s getting older. And that actually represents an economic opportunity.” (Flickr photo/Germán Parra)

This is Lisa Busch again.

“I don’t disagree with you, Gary. But I think Michelle makes a point about taxation on food. It is something that bothers me. I know it’s part of our economic picture right now for running the government, so I don’t think I would be in favor of increasing the millage rate to get rid of the tax on food. But I guess I would ask the panelists and the audience, What do you think of the idea of lowering the tax on food in the wintertime, and raising it again in the summer?”

Audience member Sherry Aiken didn’t wait to be called on. She responded, “But we still have to eat year-round!”

“I think taxation on food is one of the worst things we can do. $5.26 for a gallon of milk — I have a 13-year-old. It’s just unbelievably expensive. I had one bag of groceries, no meat, at $50-60. The thing is, I can understand some things I can reduce, but I can’t stop eating.”

Aiken added that she was fortunate to be able to ignore food prices, within reason. This prompted forum moderator Thad Poulson to call for a show of hands: Who would support a need-based tax exemption on food? Almost every hand went up. Later, he also called for a show of support for Sitka Community Hospital in its current form – also with a strong positive result. And again, for raising the property tax in Sitka – which also received near-unanimous support. Poulson also found some agreement on raising the sales tax by 1-percent in summertime to support the schools.

The willingness to tax ourselves was meaningful to Gary Paxton.

“This is not a crisis in having city government run itself. It’s a function of responding to reduced state funding, and ensuring that we can provide our school system with enough money so that they don’t lose any more than 3 teachers. So I just wanted to say as a matter of perspective, Thad, that things are a lot better than we think we’re doing.”

Paxton thought a couple of the new tax ideas might be reasonable, but Steve Reifenstuhl thought voters might object.

“We come up against a wall. We’re going to vote on a tax. If that tax gets voted down, that wall gets closer, and the city has to react. They have to start cutting programs. They’re forced into it. If it gets approved, we get some relief and go on.”

Thad Poulson recalled Sitka in 1968, with a property tax of 9.5 mils, a sales tax, and a state income tax. There were no pollution controls; raw sewage was pumped directly into the ocean. All that — and more — has changed.

“We had tumbledown schoolhouses. They’re all in perfect condition now. Our water was coming virtually untreated from Indian River, and now it’s totally purified. The infrastructure in Sitka is first rate. We’re paying less per capita now than back in the day. So, the good old days were not necessarily the good old days.”

Earlier in the evening, fisherman Eric Jordan observed that economic growth would make Sitka a more desirable place to live – and make it more expensive. As the town hall came to a close, he lined up behind the positive thinkers.

“I agree with the people who say we’re in amazingly good shape. We can thank (former administrators) John Stein and Gary Paxton, the assembly people who’ve been on here for years. This community’s well-situated to handle the problems. However, the force of the gales to come. I just wish the state had the kind of leadership we do. And I want to thank all the panel members for putting up with Mark Gorman, and letting me hold the mic.” (Laughter.)

With that faint praise, current city administrator Mark Gorman thanked everyone for attending, saying he had learned a lot. He quoted an earlier comment by Gary Paxton that bureaucracies want to expand, and want to do good – and both are expensive. Gorman said, “I want to do good – maybe at half the price.”