• Next month, the question of rescinding the winter sales tax holiday goes back on the council table
By Naomi Klouda
Applying the year-round food sales tax went down at Monday night’s Homer City Council meeting, but not without a fight. Reinstating the winter sales tax lost in a vote but comes back for discussion at the Jan. 14 meeting after Councilman James Dolma “reconsidered” or withdrew his ‘no’ vote.
This means the see-saw motion of whether to reapply the 4.5 percent sales tax continues to rock back and forth.
New spending proposals in the 2013 budget by Councilman Bryan Zak hinged on raising $697,000 through reinstating the 4.5 percent tax. Since the sales tax question failed, a new police dispatcher position, a cost of living allowance for city workers and all other budget items Zak proposed failed.
At the tail end of numerous testimony asking the council to not pass it, the sales tax question failed 3-2. In order to pass, the measure needed four votes.
Voting ‘yes’ were Councilmembers Zak, Francie Roberts, and Beau Burgess. The ‘no’ votes were James Dolma and David Lewis. If Dolma had voted ‘yes,’ the measure would have passed. Councilmember Barbara Howard was ill and could not attend the meeting, but had vowed to vote against it.
The ordinance stated that “the loss of sales tax revenues on the sale of nonprepared foods has had a substantial negative impact on funding for essential City services.”
These include water, sewer and road project matching funds and “has required the almost complete elimination of all non-essential City services.” That’s the argument expressed by those in favor of regaining the tax after three years of winter “tax holidays.”
But in testimony from the public, the council was challenged on the truth of “essential” services when funding was proposed for other areas.
The 2013 General Fund Budget
Two new positions were approved in the coming year, added in at the request of Homer City Manager Walt Wrede:
• A new Homer Public Works Project Manager will be hired for $90,000, but about $70,000 is to come from project funds while $18,000 is to come from the general fund. Public Works has 19 different projects currently in progress or planning, and $5 million in design funding.
Currently, the public works director has filled both the role of projects manager and oversees administrative oversight on water-sewer, roads, building maintenance and other duties.
• A part-time internet technology aid for the Homer Public Library, paid for with funds from the Online Libraries Grant of $7,280.
• A full-time IT employee, who formerly was half-time, $36,506.
• $20,000 addition to the Homer Chamber’s $21,000 appropriation.
At Monday night’s council meeting, these 2013 General Fund Budget items were not approved but are not completely off the table. At the Jan. 14 meeting, the council will look at funding these if the reconsideration on Zak’s ordinance results in passage:
• Two percent Cost of Living Allowance for city employees.
• New police dispatch position for $70,780.
• New library technician at $49,569.
• $20,000 for the Homer Senior Center.
• Bringing the City Council stipend up from $50 a month to $150.
• Additional $19,000 for the Homer Chamber of Commerce.
• $185,000 to go into reserve accounts for public arts, city hall, planning, the airport, the library, police, fire and public works.
A second measure to create a new category of sales tax on prepared foods, including frozen TV dinners, soda pop and chips, also failed in a 2-3 vote. Councilman Lewis’s ordinance sought to gain more city revenue through renewing some of the sales tax. That, too, was voted down.
City needs vs citizen wants
Keren Kelley, director of the Homer Senior Center, illustrated the benefits and drawbacks of the dilemma: Homer Seniors stood, for the first time in many years, to receive an appropriation of $20,000 from the sales tax revenue.
“This is a mixed blessing for us. We are very grateful you have identified senior services for our community as a priority and a contribution to our organization is earmarked,” Kelley said. “With the increase you are proposing, be mindful as to the effect on the low-income seniors. This increase would be detrimental to their way of life.”
Increases in heating and fuel costs already cut into a senior’s budget so they can’t buy as much food, she said.
Ten other members of the public showed up and left lengthy testimony contending more sales tax is a bad way to go.
Charles Crampton pointed out that the only choice people have when sales tax is higher, in one place than another, is to shop where it’s less. “I prefer to buy here in town to support the local community,” he said. He questioned the need to raise city salaries through COLA and the appropriation to the Homer Chamber of Commerce.
Connie Akers proposed letting the public have a crack at the budget. “I’m sure we can all find places to cut.”
Barb Brodowski, who has an accounting background, broke down the budget numbers for salaries and pointed out the huge increases in benefits even though there are no new employees added and no COLA. Much of this is due to the required PERS contributions for Public Employee Retirements, which the city manager has acknowledged are increasing out-of-control for all levels of government these days.
She calculated the city will spend an increase of $791,081 or 7.5 percent more, for personnel – not on other areas of city services. But the money to pay for this comes from “every man, woman and child in this city,” she said.
Nova Stubbs called the tax anti-family and questioned the “utopian” community-shaping going on by the council at the expense of struggling middle class families hurt most by sales tax.
Ernie Suoja urged the council to trash both sales tax measures. “A lot of seniors and people who just don’t know how to cook purchase prepared foods,” he pointed out. “It could be just plain old age or unskilled cooks, but many depend on prepared foods. Look elsewhere for funding.”
“What part of ‘no’ is it that Mr. Zak doesn’t understand?” asked John Chapple III, in reference to ballot props that twice asked voters their opinion on the tax.
Ken Castner told the council he feels ambivalent on the matter for himself, but he isn’t convinced the council has used all the tools at their disposable before reaching for more taxes. “(And) It’s probably misguided to announce what you want to do with the money, because it certainly got my quiver quivering,” he said.
Lifelong Homer resident Ray Kranich warned that in continually finding additional revenue, government grows its dependence on public money. That’s the problem currently experienced by the federal government, he said.
But, it was also a time for city council members to answer back to the public in a round of uncharacteristic speeches.
“Not everything that people said tonight rings totally true,” Lewis said. “I don’t like the way some people jump on city workers. Everyone makes a choice whether they wanted to work for the city or for themselves.”
Not funding depreciation accounts is a big mistake, Burgess said. Voters asked for city funding of the community recreation program and for the core services of water, sewer, police and fire.
“We as a council are not trying to steamroll you – this is a tough call. Just understand where we are coming from,” he said.
Sales tax is an easy and fair way for all people who use the city services to help pay, said Roberts, such as the library and the community recreation program. These are accessed by people who don’t live inside city limits.
Dolma, appointed in October to fill a vacant council seat, gave an early clue to his own ambivalence. He said he’s philosophically against sales tax but “intellectually believes it gives people outside the city a chance to share in these costs.”
The longest speech came from Mayor Beth Wythe.
“I am not in favor of reinstating the sales tax, but not for the reasons brought up. In its beginning it was voted in by people in Homer,” she said. “The tax was set to pay for the new library and for water-sewer (infrastructure.)”
In order to maintain sanitary water-sewer services, qualified professionals need to be in place, she said. “You want someone who is qualified to put your tap water in so it’s not going to kill you. You want your waste to go away and if it’s not, you want someone to come to help you fix it. … If there’s a problem, you want the police at your door immediately. Those are not free services. They are not inexpensive services.”
The mayor went to bat for city employees who need to be highly skilled and trained to do the work, but the public begrudges them equitable pay and health benefits.
City workers increasingly shoulder their own health care costs through higher deductibles and continue to go without COLA, though the cost of living has gone up 10 percent, she said.
The city’s role is to fund only basic public safety, but the public continues to ask for other kinds of services. “I personally don’t have a hardship in not affording the Boys and Girls Club or the seniors. But the roads need to be plowed. The fire, police, water-sewer and if that is all the taxes pay for, I’m OK with that,” she said.
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