By SHANNON HAUGLAND
Sentinel Staff Writer
The Assembly at its Tuesday meeting postponed a decision on dedicating sales tax proceeds from marijuana sales to school activities.
The ballot question ordinance passed on first reading May 10 and was up for final reading, but sponsors Kevin Knox and Rebecca Himschoot said they wanted to explore a few changes before final reading.
If it’s placed on the ballot and is passed by voters, marijuana retail sales would be exempt from the regular city sales tax. The new marijuana consumer sales tax would start at 6 percent the first year, and go to 8 percent the second and 10 percent the third and beyond. It would go into effect Jan. 1.
Funds from the tax would go toward student activities, with the idea that it would decrease the financial burden on families and remove barriers for participation. Extracurricular activities generally have participation fees for students, and expenses for travel.
Some Assembly members, including Knox and Himschoot, want to make sure the funds from the new tax for school activities and travel would not be counted toward the state cap. The current version of the ordinance says it will be counted toward the cap.
The school district currently budgets $268,476 for student activities, including the cost of the athletic and activities director, coaching staff, officials and referees, travel and supplies.
The ordinance specifies:
“This funding will be restricted to the support of extracurricular student activities and associated travel costs.”
Sponsors said that ideally students and families would not need to pay to participate, thereby removing a barrier to taking part in sports and other activities. The overall cost of all student activities is not known at this time.
The estimated loss to the general fund from exempting marijuana sales from the city’s regular sales tax is estimated at $195,000. The new tax is expected to raise $210,000 for student activities the first year, $280,000 the second and $350,000 the third.
Knox said today he’s hoping that he and Himschoot can work with city staff to fine-tune the ordinance to address concerns before the next Assembly meeting.
The final regular meeting to consider ballot questions on first reading is July 26.
The school district creates its own budget, and the Assembly approves a level of local support for the district, which for fiscal year 2023 was close to $8.8 million. In its contribution, the Assembly specified that $60,000 would go toward Performing Arts Center utilities; $122,000 would go toward Blatchley pool operations; and $150,000 for building maintenance.
If the ballot measure passes, the marijuana retail sales proceeds would come up as a discussion item during the budget process, and the Assembly in a similar manner could dedicate the revenues to school activities and travel, city staff said today.
Another finance-related issue at Tuesday’s Assembly meeting was a budget ordinance to increasing the utility subsidy for needy families from the current maximum level of $65 per month per household to $100 per month per household.
The ordinance passed on first reading to increase the Utility Subsidization Fund to cover the higher subsidy amount for fiscal year 2023, effective July 1. Applications for participation are due the end of October.
If it passes on second reading June 14, the maximum available would go to $100 but the amount available would depend on the number of participants.
Also at the meeting the Assembly passed budget ordinances on final reading for the general fund, special revenue funds, enterprise funds and internal service funds with no debate, although members in the past have noted the lengthy budget process that led to passage of the ordinances.
The budgets include rate increases in utilities and harbors.
The Assembly on Tuesday also passed a resolution to adopt the millage rate of 6 mills.
Also approved at the meeting were:
– liquor license renewals for Harbor Mountain Brewing Co. and a restaurant designation permit application and licensed premises diagram change for Halibut Point Crab and Brew.
– a resolution applying for a grant with the Alaska State Library for $71,486 “to convene and develop a statewide action plan for Libraries, Archives and Museums to uncover and share Alaska Native boarding school, orphanages and education history.”
– the health needs and human services goals for 2022, which includes finishing the Sitka Health Equity Report and presenting findings to the Assembly in December. To complete this report the commission will engage the public through various means “to learn more about experiences of health disparity from Sitkans and Sitka’s health needs and human services organizations.”
– a resolution related to decarbonizing city operations by 2030 through the implementation of clean energy infrastructure for lights, power, and transportation, and excluding fossil fuel energy sources except as necessary “due to reliability and resiliency of resources, technical or cost.
The resolution notes that the greatest opportunity to decarbonize “rests with the broader community, which comprises the vast majority of the carbon emissions originating in Sitka...” City staff plays a role in this by continuing to look for opportunities to collaborate, incentivize, set policy and engage with local entities to encourage decarbonization.
A report on the Assembly’s boat haulout discussion Tuesday appeared in Wednesday’s Sentinel.
