A 1% city sales tax increase took effect last week. This action raised the local sales tax from 6% to 7% overall.
The tax increase was discussed over several work sessions and regular meetings by the council in the late fall before being approved in November. According to City Council discussions regarding the ordinance change, the increase will achieve an additional $625,000 in sales tax revenue in 2024.
Prior to this the city had not raised the general tax rate in over 25 years.
The tax increase includes services and rent for housing. In addition to the 1% raise in sales tax, the council also voted to raise the tax cap on taxable sales and services from $3,000 to $5,000.
While the Alaska statewide sales tax rate is nonexistent, municipalities have the authority to institute their own taxes on goods and services. According to the State of Alaska’s Department of Commerce, individual municipalities’ tax rate ranges from 1%-7%. Cordova’s new rate is higher than other areas in the state which are a typical rate of 2-5%.
Residents reacted to the news of higher taxes on the public Cordova Bulletin board on Facebook in a thread that quickly garnered over 100 comments in a matter of hours. Some residents brought up the fact that a year-round tax is a burden on residents when the seasonal influx of workers arrives in the summer. The option of a seasonal tax was discussed at the City Council in past meetings and budget work sessions, but was ultimately found less desirable than a year-round sales tax.
While the general tone of the comment thread was not supportive of the motion, others shared why they understood the hike was necessary. Cathy Sherman, a Council member, commented on the public thread to remind residents that the City Council accepts public comments and correspondence related to agenda items at each meeting.
Sylvia Lange is a local business owner who operates the hotel side of the Reluctant Fisherman Inn and says that as a business person, she feels a seasonal tax will hurt her business.
According to Lange, similarly to many other businesses in town, the Reluctant uses more goods during the summer season such as fuel and electricity. Despite this, she still supports a seasonal tax as a community member who lives year-round in Cordova.
“I think a seasonal tax is better for the community because we need to incentivize people to be here in the winter,” she said.
Lange says that a thriving community is good for business: “I need a healthy community for my business to be healthy, and so the community always has to come first.”
Lange echoes what other residents had expressed – that she understands the difficulty of making budget decisions for the city.
“It’s never going to be a one-size-fits-all solution. But it should be fair and I don’t think a year-round tax is good for this community,” she said.
Looking ahead, Cordova City Council will hold the regular city election on Tuesday, March 5. Voters will choose to elect two city council seats, D and E, both of which are regular three-year terms.
In addition to the council, voters will also have the opportunity to elect two School Board Members and two Hospital Services Members. Board members of the school and hospital boards also serve three-year terms.
Cordova residents are qualified to vote in regular elections if they are registered to vote in state elections and have lived in Cordova for at least 30 days prior to the election. Those residents who wish to register to vote in the upcoming election can do so online at elections.alaska.gov or fill out a physical application made available at City Hall in the lower level of the Cordova Center.
Residents who wish to declare candidacy must file the necessary paperwork with the city clerk before Feb. 5. Any qualified voter who meets residency and age requirements may declare candidacy for the regular election. Residency is required for one year immediately preceding the election as per Cordova Municipal Code 15.20.010.
