Ketchikan Assembly votes to resurrect pot tax ordinance

 

The Ketchikan Gateway Borough Assembly voted Monday to bring back a tabled ordinance that would charge a 10 percent excise tax for marijuana retail sales within the borough.

The proceeds from that tax then could be directed toward grants for local nonprofit agencies.

The motion by Assembly Member John Harrington to bring back the pot tax passed 6-1 with Assembly Member Stephen Bradford voting no. The ordinance was indefinitely postponed by the Assembly last year. It now will come back the Assembly at its next meeting on August 7.

The pot-tax vote was the result of a larger discussion about how the borough can continue to financially assist local nonprofit agencies. The borough has been using money in its economic development fund, but that fund has been depleted.  

There was a proposal to form an ad hoc committee of Assembly members and representatives from nonprofit agencies to come up with recommendations.

But, Assembly Member Rodney Dial was not in favor of that kind of committee. He said those agencies already have had an opportunity to provide input on how to raise more revenue through a survey and a meeting with borough officials.

“The way I kind of took that survey was the grant community pretty much said quite loudly: ‘Raise taxes. Just not in my backyard,’” he said. “And, I would like to see a plan from the manager that we can all discuss that they could come and give input on, and we could debate it and amend it if we need to.”

Dial had proposed using revenue from a tobacco or marijuana tax to fund agencies. He also proposed charging a sales tax on performances hosted by local nonprofit agencies, like plays and concerts.

Dial said another 50 cents per ticket shouldn’t be a major hardship for nonprofit agencies to collect if that money is going to go back to them anyway.

“Everybody needs some skin in the game and I guess that’s what I’d ask from the arts community, is, maybe take a bite of humble pie here and realize we’re all in this together,” he said. “You’re looking for some tax increases, right? That’s the only way we’re going to do this. When you’re saying basically that old couple on Social Security that hasn’t gotten an increase in the last couple of years — they need to pay more so that we can continue to have tax-free ticket sales for First City Players, I think a lot of people are going to have a problem with that.”

Assembly Member Mike Painter agreed. Citing the survey results, which polled 10 local nonprofits, he said it’s “appalling” that agencies don’t want to charge sales tax to help fund their activities.

Assembly Member Felix Wong disagreed with Dial’s assertion that nonprofits have no “skin in the game.” He cited the many volunteers who put time in to make sure events are successful.

“And not just people who volunteer time off from work, but the people who work in the nonprofits themselves,” he said. “They put in far more time than any amount of money can compensate for.”

Assembly Member John Harrington noted that keeping track of and collecting sales taxes would add an extra burden to nonprofit agencies. He said a different revenue source should be found. He also suggests that the borough cut some agencies from the grant program.

Assembly Member Judith McQuerry said she would like to establish more specific criteria for agencies that apply for borough grants. She favors creating an ad hoc committee to come up with a plan for the Assembly to consider.

Assembly Member Glen Thompson invited local nonprofit representatives to comment on the Assembly’s discussion. The Rev. Evelyn Erbele, who works with First City Homeless Services day shelter, reminded the Assembly that there are far more nonprofit agencies in Ketchikan than those receiving funding from the borough.

She said it’s unfair to single out the few that have applied for grants.

“If a 501C-3 is going to be asked to start paying taxes on selling a theater ticket, then I would ask that the Girl Scouts start paying taxes for every box of cookies they sell,” she said. “And the Boy Scouts for all their popcorn. And the ball teams for all the hot dogs that they sell at Dudley Field.”

A 501C-3 is a group with federally recognized nonprofit status.

Erbele said there should be much more discussion about any new nonprofit tax, because not all the agencies would benefit as the borough grant program currently exists.

Dial agreed with Erbele. He said he’s not trying to single out any one nonprofit agency.  

Kathleen Light of the Ketchikan Area Arts and Humanities Council also spoke. She said nonprofits participating in a meeting with the borough did not want taxes raised on anyone. Light said the group wanted to continue working with the borough toward a solution.

Agnes Moran of Women in Safe Homes noted that a survey with only 10 results was not statistically representative and shouldn’t be used as such.

In addition to resurrecting the marijuana tax ordinance, the Assembly voted to postpone creating a committee to investigate the future of borough nonprofit grants.  The Assembly instead asked Borough Manager Ruben Duran to bring back a plan for further discussion.