Sales Tax Increase or Property Tax for Klawock Residents? You Decide! No Options for Budget Cuts However... - P.O.W. Report

Wednesday, September 13, 2017

Sales Tax Increase or Property Tax for Klawock Residents? You Decide! No Options for Budget Cuts However...

From the Klawock Mayor:




The City Council unanimously passed an ordinance on Monday to raise the sales tax from 5.5% to 6.5%. This tax increase will be on the ballot for voter approval. The Council has decided to designate .5% of the increase, if passed, to go to the City and .5% to Klawock School.

The City has a mandatory minimum financial obligation to the school. With the uncertainty surrounding State and Federal funding sources, it is crucial that we take steps to solidify Klawock's financial independence.
If the tax increase fails, the City of Klawock will likely implement a property tax. I do not want a property tax. Nobody wants a property tax.

I am urging you to vote yes on the sales tax increase. The increase is a necessary step.

Other measures include, but are not limited to, economic development initiatives, 14(c)3 finalization, expanding City boundaries through annexation, and the ongoing effort of getting the "big 5" entities to work together for the Citizens Klawock. (City, School, Heenya, SEARHC, and the Tribe) These "big 5" have the access and the know-how to bring prosperity to Klawock.

Thanks for reading. Show up to the meetings and hold us accountable, this is YOUR City!!

Additional Information:

The sales tax hasn't been raised since 1998 when it went to 5.5%. Based on fiscal year 2017(FY17), .5% equals $54,500 to City and School (1% = $109,000).

FY17 minimum payment to the school cost the city $143,391.

The property tax means no one in Klawock would ever actually own land. If you fall behind on property tax, you may lose your land, even if you own the property. Additionally, appraising property for tax purposes is a resource-intensive process compared to the voluntary reporting mechanism of sales tax.

The City cannot afford to pay $3,000 per appraisal to implement the property tax. Therefore, it is likely that each property owner would be required to pay the cost of the appraisal out of pocket, plus the lump sum payment of the assessed property tax.

The public usually rates property taxes as the most unpopular of all taxes.

The property tax is, however, the most stable and reliable revenue source and because it can be secured by the property, it is almost impossible to evade. It will be a big hit to the budget for those on a fixed income. There might be tax breaks available later, but not necessarily. EVERYONE pays property tax. But that ensures that a broad segment of the population shares the burden. This option is hard to swallow in my opinion.

These are just a few of the reasons you need to vote yes for a 1% increase.

The property tax doesn't require a vote to be implemented. The municipality has the right to levy a property tax; I just don't want to. Please, help me avoid this option.

The other measures I mentioned, (economic development initiatives, 14(c)3 finalization, expanding City boundaries through annexation), are all being actively pursued. We are putting an extraordinary amount of effort into Klawock's progress in every aspect.

Expanding our boundaries will allow us to take advantage of taxing anything within those boundaries (including fish boxes!). 14(c)3 finalization will strengthen our argument for annexation if, for instance, we owned the right of way in the Klawock Lake sub-division and the Big Salt sub-division. This is possible through 14(c)3. The Alaska Native Claims Settlement Act (ANSCA) allows for commercial, residential and public use allotments. Taking advantage of the land acquired from Heenya under this law will enable us to draw in businesses and create housing opportunities.

We are not relying solely on a tax increase to get us through this weak economy. We are literally and figuratively attempting to expand in every direction.

Read More: City of Craig New Fees and Rates + the 2018 Operating Budget

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