Juneau Alaska Struggling How to Accommodate Sales Tax Needs

Alaska may not have a state sales tax, but each municipality must fund their own improvements and many have employed local sales taxes to help them. Juneau is one of those municipalities who have employed sales tax revenues as a means to build revenue to fund projects such as:

• Juneau International Airport renovations
• Capital Transit bus bar and maintenance facility maintenance
• Aurora and Auke Bay harbor maintenance and improvement
• Centennial Hall re-roofing
• Marine Park trail improvements
• Eaglecrest Ski Area renovations and new Snow Sports School building
• Mental health unit at Bartlett Regional Hospital
• Library building
• Two small performing arts theaters
• Soboleff Cultural Center downtown construction

Unfortunately, funding all these proposed projects may cost more than any temporary sales taxes can bring in. Currently, the city has a 5 percent sales tax which “…is comprised of a permanent 1 percent, a temporary 3 percent and a temporary 1 percent tax; the temporary portions to be approved by voters.” The 1 percent temporary sales tax is called the “…project tax, because it’s generally used to fund city construction and maintenance.”

But according to KTOO News, the “wish list” has grown to $81 million for proposed projects. And “…[t]he temporary 1 percent sales tax generates an average of $8 million a year, or $40 million over the five years it is in effect.”

With that restriction, and the many proposed projects, the Assembly will be hard pressed in deciding which projects will go on the fall municipal election ballot.