Counterproposal: Assembly’s seasonal tax allows Juneauites to have our cake and eat it too

By Paul Kelly

Coming back into the public discourse this election season, it’s looking like Juneau citizens could again be deciding whether or not we exempt groceries and utilities from a sales tax. The citizen’s group Affordable Juneau has their own proposal they’re trying to get on the ballot. The Assembly has a competing proposal that it’s been cooking up.

Affordable Juneau is right that it’s expensive to live in Juneau. They’re right that with a sales tax, too much of the burden to support city services has been falling on the people who can afford it least. They’re also right that a sales tax exemption on groceries and utilities shifts the burden away from people buying what they need and more towards people buying what they want.

As a taxpayer myself, this sounds great. As an Assembly member, I’m asking myself a familiar question. How are we going to afford it?

Their ballot proposition fails to identify the deep and devastating cuts to city services a reduction in revenue of that magnitude would require. Sales tax revenue is projected to bring in $56.1 million over the next year. That money goes to street repair and maintenance, supporting childcare, keeping our school facilities maintained, making sure our firefighters and police have the equipment to respond to emergencies, and many other initiatives that help make Juneau a place worth living. They don’t account for the estimated 20% less we’d be bringing in.

The Assembly has a counterproposal that addresses the financial hardships of our constituents without compromising government services. In our summer months, so many nonresidents come to our city. They’re used to spending their money in places with a much higher sales tax than ours. So, let’s take advantage of that. Our back-of-the-napkin math shows that by raising the sales tax to 7.5% in the summer, we can afford to lower it to 3.5% the rest of the year, and exempt grocery and utility costs all year. 

Furthermore, both the state and federal governments are shifting their costs onto local governments like ours. We’ve already seen that in the form of reducing state support for education and federal support of our libraries. The Assembly’s proposal actually brings in more revenue; relieving some of that cost-shifting from year-round residents.

In the end, our proposal allows Juneauites to have our cake and eat it too. We can make Juneau more affordable for residents trying to get by and we can afford to provide the services that our citizens expect and demand. The year-round resident comes out ahead as we capitalize more on our summer visitors.

This proposal doesn’t work however without community support and public discussion. Share your opinion with us or offer suggestions to make our proposal better. Email us at Borough.Assembly@juneau.gov before our Finance Committee on July 9, or come testify at our next Assembly meeting July 28.

• Paul Kelly is an areawide member of the Juneau Assembly elected in October of 2023. He lives in Twin Lakes with his wife and two stepchildren.