Voters will now decide whether Sitka adopts a new cannabis tax. On Tuesday (6-29-22), the Sitka Assembly voted to put a consumer’s sales tax on marijuana on the municipal election ballot this fall.
The new ballot proposition would eliminate the standard city sales tax on cannabis and replace it with one that would gradually increase to eight percent. The proceeds would benefit the Sitka School District’s “Student Activities Fund,” which pays for travel, supplies and other expenses.
Assembly member Thor Christianson said he supported putting it on the ballot but he didn’t know if he’d vote in favor or against at the polls.
“Its essentially eventually gonna be about a 2 ½ percent hike in taxes, because most of this is gonna be a transfer from the money that we were already taking for normal sales tax,” Christianson said. “Honestly if I’m going to vote against it as a citizen, that would be why, just because of the hole its going to put in the general fund. But I have no problem putting it on the ballot to let the people of Sitka decide.”
It’s not the first time the assembly has considered putting a marijuana tax out to the voters. In 2021, a ballot prop that would have levied an additional five percent tax on cannabis failed on a split vote. Assembly member Kevin Mosher was a no vote last year. This time, he voted in favor.
“We talked about it quite a bit. The very first go around we made some adjustments, some compromises, and I feel like this is fair,” Mosher said, and added that he supported putting the prop out to the voters for a decision.
So what exactly are those compromises? The ballot prop the assembly settled on is different from the ordinance brought forth by sponsors Rebecca Himschoot and Kevin Knox in May. Initially they’d proposed a tax that would have gradually increased to 10 percent, but that was reduced to 8, and they also added language to confirm that the revenue collected from the tax would be separate from the city’s annual contribution to the Sitka School District.
Assembly member Kevin Knox, concerned that there’s still some confusion about the ballot prop out there, and wanted to reiterate that the tax is not in addition to sales tax, it replaces it, and it’s levied on consumers, not businesses.
“Its not technically income that the business is losing or gains and then loses…its a consumer tax just like our sales tax,” Knox said. “Totally in favor of seeing this on the October ballot, myself, and if it passes tonight, looking forward to continuing the dialogue with the community and seeing how it fares.”
No one from the public commented on the final vote, but at previous meetings the ballot prop has been supported by a handful of educators and parents who say the tax is necessary in order to help fund student activities, which have become increasingly more expensive, especially with less accessible ferry service for student travel.
The measure was also challenged at previous meetings by a few cannabis business owners, who are concerned that the new tax will make legal cannabis less competitive against Sitka’s existing illegal market.
At the first reading in early June, the ordinance passed 5-2 with member Crystal Duncan and Mayor Steven Eisenbeisz opposed. It passed 5-0 in their absence on final reading. It will appear on the ballot in the October 4 municipal election.
Read KCAW’s Additional Coverage Here:
Sitka School Board endorses plan to tax cannabis to support student activities