A proposed 5-cents-per-beverage-container excise tax failed to pass the Ketchikan Gateway Borough Assembly. (KRBD photo)

A proposed 5-cent tax on beverage containers, such as plastic water bottles, was rejected Tuesday by the Ketchikan Gateway Borough Assembly.

The excise tax was sponsored by two assembly members, but was drafted by Kim Hodne and Trevor Shaw. They’re both Ketchikan School Board members, but were not acting in that capacity.

Hodne came before the assembly on Tuesday to support the measure. He said it’s a broad-based tax that would apply to everyone, including visitors. And, he said, it’s a way to raise revenue for local nonprofit organizations.

“It’s a nickel. It’s 30 cents a six pack of Coke, a six-pack of Budweiser, whatever it is. Every bottle of whiskey, every liter of pop, it’s a nickle… A dollar-20 on that case of water,” he said. “My wife buys at least two cases of water a month. It’s going to cost me $2.40 to support nonprofits. I don’t have the means to write checks to nonprofits to support them. This is a way of me indirectly being able to support nonprofits.”

Hodne clarified that milk, milk alternatives and juice would be exempt from the tax.

Other members of the public addressed that topic. Speaking in support of the proposal, Deborah Hayden said it’s an avoidable tax – people can choose to not purchase bottled or canned beverages.

Stuart Swiger, though, said he’s opposed to the idea, and believes the borough should cut spending rather than tax more.

Maggie Hurt spoke in support of the proposed tax. She admits she doesn’t always pay close attention in class, but this issue intrigued her.

“All of a sudden my teacher brings it up and I’m all like, ‘I’m fascinated. Go on.’ So, I’m like, ‘I wonder if my dad’s going to the assembly tonight, so I can go.’ And, now I’m here and I think that you guys should totally do it. And I’m pretty sure people my age will be totally OK. Everyone has 5 cents,” she said. 

Judith McQuerry was one of the assembly sponsors. She said she likes the idea because it covers everyone.

“It may cut down on some of the litter in the community. Probably not much, but that may be a benefit,” she said. “And, frankly, it’s a way of funding our nonprofits.”

Felix Wong was the second sponsor. He said the proposed tax would fund grants in the short-term, giving time for the borough to come up with another idea.

The proposal called for the tax to sunset in two years.

Other assembly members were not convinced, though. Glen Thompson said the tax is not fair.

“You’re going to have a liter bottle of pop that’s 5 cents, and a little tiny sports drink that’s 3 ounces, that’s 5 cents; and we’re not going to charge anything for a McDonald’s cup of coffee, which is what I find on the side of the road,” he said. 

Stephen Bradford argued that if the assembly wants to move forward with such a tax, it should be a special sales tax that goes in front of voters.

McQuerry countered that the tax was proposed as an excise tax because it’s too late to get a special sales tax on the October ballot. She said it would have to wait a full year to go before voters.

Borough code requires voter approval for sales taxes, but not excise taxes.

The motion to introduce the proposed beverage-container tax failed 4-2. McQuerry and Wong were the only supporting votes.

In other matters, the assembly narrowly voted to introduce an ordinance that would remove the senior sales tax exemption for alcohol, tobacco and marijuana purchases. The vote was 3-3, and Mayor David Landis broke the tie in favor of introducing the measure.

Those voting against removing the exemption were Thompson, Bradford and Mike Painter. Rodney Dial was absent.

That ordinance will come back to the Assembly for a public hearing and second vote on Oct. 2.