City residents to get sales tax break on rent
Sales taxes within Ketchikan city limits are going up this April as the city’s new seasonal sales tax rates take effect. Including the borough’s flat 2.5% sales tax, the new rates charge 8% from April through October and 5.5% during the winter months. The new system passed the council last year.
But thanks to a change finalized at the council’s March 2 meeting, renters will pay the winter rate year-round. That essentially amounts to a 1% sales tax cut on rent.
Since the city only taxes the first $1,000 of monthly rent payments, that means renters will pay a maximum of $55 in sales tax each month. That’s $10 less than the current maximum. Finance officials say it’ll cut the city’s annual revenue by roughly $190,000 a year.
The tax break passed 6-1 with Council Member Jai Mathani as the lone vote against. He said he was in favor of the exemption, but voted against the modification in protest of the overall seasonal sales tax system.
City staff are hosting a Q&A on the seasonal sales tax rates on March 7 at 6 p.m. in the council chambers at City Hall.
Ketchikan Public Utilities electric and water rates going up
While renters will get up to $10 off their monthly rent bills thanks to the tax break, residents will also face slightly higher utility rates starting in April. A 1.5% hike to electricity rates and a 4% raise in water rates will cost the average resident an extra $4.33 each month, according to the city’s estimates. City officials say the hikes are necessary to cover higher electricity costs from the Southeast Alaska Power Agency and debt for water system infrastructure projects.
The rate hikes also passed 6-1 with only Mahtani in opposition.
And it likely isn’t the last rate hike in the near future. Ketchikan Public Utilities’ Electric and Water divisions each ran deficits last year, and the council is planning to discuss a larger rate-setting policy this July.
Assembly to talk school district budget
Over at the White Cliff Building, Ketchikan Gateway Borough Assembly members are scheduled to discuss their expectations as the local school district builds its budget. Though the school board sets its own budget, the assembly has the final say over how much borough money goes towards education each year.
Ketchikan’s school district is preparing for deep cuts. Superintendent Michael Robbins told the school board that the district is facing a $3 million deficit and is considering laying off 15% of its workforce.
The board adopted a so-called Reduction in Force plan last month, a contractually mandated step that outlines the procedures for layoffs. So far, it’s unclear who might get the ax, but Robbins has said the district is looking at cuts across the board, from teachers and administrators to maintenance staff and others.
Adding to the budget woes is the district’s $4 million health insurance debt to the borough. The assembly and school board have agreed on a plan to stop the debt from growing but have yet to come to terms on how the district will repay the debt.
Assembly members will discuss the budget in a work session scheduled for Monday evening.
Ketchikan’s borough OKs $25K for trollers’ legal fight, final vote to come Monday
Also on Monday, the assembly is set to take a final vote on a proposed $25,000 donation to the Alaska Trollers Association’s fight against a lawsuit that threatens to shut down the Southeast king salmon troll fishery. A Washington state conservation group asked a federal judge to shut down the fishery to protect an endangered population of killer whales in Puget Sound.
Communities across Southeast Alaska, including Ketchikan’s city and borough, have passed resolutions opposing a king salmon fishery shutdown. The $25,000 contribution would go towards the Alaska Trollers Association’s legal expenses.
The assembly approved the payment earlier this month in first reading. It’ll be back Monday for a final vote.