A raft of sales tax exemption changes and a new tobacco excise tax took another step toward making this October’s borough ballot Monday. Petersburg’s borough assembly voted to advance the tax questions and they’ll need just one more meeting’s approval before going to local voters.
Several of the proposals would change or end Petersburg’s sales tax exemption for senior citizens and a few of the ballot questions generated a little discussion and dissension.

Assembly member Jeigh Stanton Gregor reiterated that he thought all the changes should be decided by local voters. “As a citizen I don’t think I’ll vote for some of these but as an assembly person I will definitely vote for it because I think it is up to the voters to decide whether they want these.”

One change would sunset the senior exemption after 2019. Only those people who’ve already qualified for the exemption by the end of that year would continue to qualify. For everyone else the senior exemption would end.
Vice mayor Cindi Lagoudakis did not support that change. “And I guess my only concern with this particular ordinance is it sets up two classes of people and a very arbitrary date. And that to me doesn’t seem entirely fair. So I will not be voting for it.”

The initial vote on that exemption was 3-2, and it failed, with Lagoudakis and Bob Lynn voting no. During a break in the meeting, however, the assembly learned John Havrilek had been listening in to the meeting and was trying, but unable, to add his vote. At the end of the meeting, the assembly agreed to reconsider the sunsetting vote. That means it will be up for second and possibly a third reading at the assembly’s first meeting in August.

Several other senior exemption ballot questions were passed in second reading this month with little or no discussion. One would eliminate the senior exemption for Alaska residents outside of Petersburg’s borough. Another would limit the exemption only to purchases of groceries and home heating fuel for all seniors. Yet another would create a one-year residency requirement for the senior exemption. All those passed 5-0 without discussion.

Another change came out of a recommendation from the borough’s sales tax committee. That group suggested raising borough’s overall sales tax exemption or cap from 12-hundred to 15-hundred dollars. For big ticket items, over that cap amount, purchasers do not pay any sales tax.

Assembly members wanted the voters to consider raising it to two thousand dollars. Committee chair Sue Flint asked the assembly to consider the smaller increase. “We felt like that was the same as Wrangell and as Sitka and one of the things we learned during that process was that Juneau fishing boats were filling up in Petersburg because they liked our sales tax cap and we want to keep that happening.”

Meanwhile assembly member Nancy Strand was not interested in the smaller increase. “In Juneau the tax cap is 75-hundred. So I suspect there’ll be still a large number or Juneau boats filling up here. Even with the 2000 dollar tax cap.”

Kurt Wohlhueter offered an amendment to raise the cap only to 15-hundred dollars. That failed 3-2 with Bob Lynn and Strand voting no. The main motion unamended with the 2000 dollar tax cap then passed 5-0.

An excise tax on cigarettes tobacco and e-cigarettes also passed unanimously in second reading. That would add two dollars for a pack of cigarettes or 45 percent of the wholesale cost of other tobacco products, if voters approve that change.

The assembly will take up the final readings of those ballot questions in August.