Voters in this fall’s municipal election in Sitka won’t get to weigh in on a new marijuana tax after all. When the Sitka Assembly met last night (7-13-21), members split over a ballot question proposal to levy a new tax on cannabis retail products.
The consumers’ sales tax for marijuana would have levied an additional 5 percent tax on cannabis retail products. The assembly approved it, on first reading in June. The revenue generated from the fund would have gone to the Sitka School District’s student activities fund.
Public comment on the tax proposal was divided. Mike Daly, a cannabis business owner, said the new tax would drive away customers. He said that the local marijuana industry had been hit hard by the pandemic, and didn’t have access to federal relief programs that other businesses did.
“I mean, everybody got money. We didn’t get anything. We suffered just as much trouble as everybody else. But we got no help from anybody,” he said. “You know, I’m all for supporting the kids. But putting the whole burden on three small businesses. We’re just little mom and pop businesses. We’re not big marijuana corporations, like everybody sees on TV. We’re just mom and pop operations.”
Sitka High Athletic Director Rich Krupa spoke in favor of the tax proposal. He said while they were thankful for the money the school receives from the city for activities every year, it wasn’t enough to keep up with the rising costs of keeping students in activities.
“There is no longer a ferry in Southeast Alaska, more or less. So we’re flying. Our students still fundraise,” Krupa said. “This has a possibility of lowering that fundraising to all the local businesses who have gone above and beyond and hardly ever say no to our student athletes.”
But when it came time for Assembly to deliberate, the group was divided. A vote in favor would put the proposal on the municipal election ballot this fall, and the voters would get to decide. Member Kevin Knox, who sponsored the proposal, said he wanted the public to weigh in.
“I would like to see this just, you know, go to the community and have the full debate within the community,” he said. “So that the community can decide whether or not this is appropriate.”
But Mayor Steven Eisenbeisz worried that if the voters approved the tax, the money it generates could be subject to the whims of future assemblies.
“It does scare me that we could put a ballot proposition in front of the voters that says we’re going to put a tax into a dedicated fund,” he said. “And within a month after the tax passes, a different body sitting at this table could change where that money goes, in essence, going around the voters and then their wishes.”
Ultimately the measure failed on a 3-3 vote with members Kevin Knox, Rebecca Himschoot and Thor Christianson in favor and members Kevin Mosher, Valorie Nelson, and Mayor Eisenbeisz opposed.