Daily Sitka Sentinel

Changes Submitted On Marijuana Tax

By SHANNON HAUGLAND
Sentinel Staff Writer

Sponsors of a proposed ballot question for a local tax on marijuana products will ask the item to be postponed at Tuesday’s Assembly meeting.

Assembly member Kevin Knox, one of three sponsors of the ordinance on the ballot question, said he and the others plan to propose a substitute ordinance that resolves some of the questions raised by other Assembly members and the public.

The ordinance passed 6-1 on first reading at the May 10 meeting. It would place a proposal on the Oct. 4 city election ballot that would remove the city sales tax from marijuana sales, and replace it with a special tax of 6 percent. The tax rate would raise to 8 percent in the second year and 10 in the third and succeeding years.

Tuesday’s regular Assembly meeting starts at 6 p.m. at Harrigan Centennial Hall.

The intent of the new ordinance is to use marijuana tax proceeds for student activities, offsetting costs now paid by families, the business community and the schools. The funds would allow students to participate in activities that aren’t open to them now because of the cost.

“You can’t buy equity, but without funds you are guaranteed not to reach equity,” Himschoot said.

The total cost of student activities is not available at this time. The school district currently budgets $268,476 but most activities charge students a participation fee; and teams hold fundraisers and ask for donations.

The main change that Knox, Kevin Mosher and Rebecca Himschoot would like to see in the ballot question is clarification that the funds raised through the tax would not count toward the state cap on the local contribution for education.

“Right now it counts toward the cap, which we don’t want it to do,” Knox said.

The ordinance must be passed by the Assembly by the end of July if it is to appear on the October city election ballot, Assembly members said.

Exempting the marijuana sales proceeds from the regular sales tax would reduce general fund revenue by $195,000 a year. But backers of the proposal say it would raise $210,000 in the first year, $280,000 the second and $350,000 in the third, for the student activities fund.

Himschoot said in an ideal world, there would be no barriers for participation, including the cost on families for students to take part. 

“Until we get to a place where there is no cost to participate including for travel,” she said, “we’re going to have to continue to rely on the incredible work by teams, students and families and the support from our businesses and broader community.”