Proposed ordinances for a sales tax cap and motor fuel excise tax died in the second reading during the city council meeting on Feb. 21.
Ordinance 1163, concerning sales tax exemptions, to decrease the cap on a single purchase transaction sale or service from $7,500 to $3,000, and Ordinance 1164, motor fuel excise tax both went down in defeat.
Initiatives to put the ordinances to a public vote will be discussed in the next city council meeting, eventually creating a resolution to set a date for a special election.
Many people wrote to Mayor Clay Koplin and the council in opposition of the new taxes, while some spoke during the council meeting and public hearing.
“We have reached out to many of our large volume customers and discussed the impacts of these taxes on their business,” Matthew Lindsey, vice president of operations at Shoreside Petroleum Inc., wrote in a letter to the council. “Based on those discussions we believe if these taxes are left in place they will drive large vessel traffic away from Cordova.”
Leo Vargas, Trident Seafoods’ Cordova North plant manager, made note of similar concerns in his letter.
“We have serious concerns with the new .04 cent fuel tax and sales tax cap increased to $7,500,” Vargas said. “This action will increase our total fuel spend, increasing our operating for the season and our fishermen will have to bear some of that cost, thus making the difference in price of fuel from other locations a lot more noticeable.”
Councilmembers Jeff Guard and Anne Schaefer reminded those in attendance that if the taxes were not passed, there would still be responsibility to find a solution for the budget.
“I also am generally not in favor of getting rid of the tax cap…if we don’t have a good way of funding the government,” Schaefer said, in agreement with Guard’s statements in support of the tax cap and motor fuel excise tax. “We’ve cut so much at this point that we can’t cut our way out of it. We need to think longer term.”
Schaefer made note of the three-year plan implemented after the strategic planning process.
“There’s no point in doing a planning process if that’s not how you’re going to operate,” she said. Schaefer urged residents to think long term and remember that yearly budgeting has not worked for the city.
She agreed that the sales tax cap, as written, may have unintended consequences for select businesses and suggested the council work towards a compromise, such a decrease from $7,500.
Councilman David Allison suggested creating exemptions for building permits as he and the council searched for a solution that wouldn’t hurt year-round residents, while also spreading the tax burden evenly throughout the community.
“It’s supposed to be a government of the people, by the people, but we gotta make it work,” Guard said.
